HANOVER, MD, September 8, 2010 – High testosterone levels in CEOs negotiating mergers and acquisitions are linked to a higher rate of dropped deals and an increase in hostile takeover attempts, according to a new study in the September issue of Management Science, a journal of the Institute for Operations Research and the Management Sciences (INFORMS®).
“Deal or No Deal: Hormones and the Mergers and Acquisitions Game” is by Maurice Levi, Kai Li, and Feng Zhang of the Sauder School of Business at the University of British Columbia. The study appears in the current issue of Management Science.
A podcast interview with Prof. Levi is at www.scienceofbetter.org/podcast/levi.html.
Although observers might expect M&A bids to follow analysis of business advantage, the authors find that more human factors are also at work.
“We find a strong association between male CEOs being young and their withdrawal rate of initiated M&As,” the authors say, characterizing these rejectionist younger executives as showing dominance-seeking behavior. “High testosterone responders tend to reject low offers even though this is against their interest.”
Younger CEOs are 4% more likely to initiate an attempt to acquire another company than older men, the study finds. In a more marked finding, male CEOs’ relative youth increases their likelihood of withdrawing a merger/acquisition bid by as much as 20%.
It strikes me that what is needed is the ability to raise and lower testosterone as differing business condiions require different optimal testosterone levels. Turn the knob up or down to adjust your personality and behavior as needed. 50 years from now I expect personality modification will become widespread.
|Share |||Randall Parker, 2010 September 14 12:10 AM Brain Sex Differences|