A Behavioral Theory Perspective on Acquisitions, Acquisition Performance, and Strategic Alternatives

Pasi Kuusela

Research output: ThesisDoctoral ThesisCollection of Articles


Attention and performance aspirations are two focal concepts of the behavioral theory of the firm (BTOF), and extensive prior research has examined their role as antecedents of firm behavior. The effects of aspirations and attention on the relationship between firm behavior and performance outcomes are substantially less well understood. To address this gap, I study the performance implications of attention and performance relative to aspirations in the context of serial acquisitions. This dissertation consists of three essays that test central arguments derived from the framework of the BTOF by utilizing data on 2,502 acquisitions that were conducted by 87 large US information and communication technology (ICT) companies from 1990 to 2010. The first essay concentrates on the behavioral consequences of performance deviations by simultaneously studying firm engagement in two polar types of strategic actions: acquisitions and divestments. The findings of the first essay show that the effects of performance that is below aspired levels on behavioral outcomes are not identical in all contexts but differ based on the type of transaction. The second essay argues that attentional control exerted by top management and an organization's practice-based experience improve the organization's ability to perform complex information processing intensive tasks. The second essay studies this by examining the role of attentional control and prior activity specific experience in the influence of acquisitions on firm-level innovation performance. The findings of the second essay show that decision makers' specific attentional orientation toward exploration can help firms to overcome difficulties in acquiring large knowledge bases when the firm possess prior experience in large knowledge base acquisitions. Furthermore, the findings suggest that prior experience is necessary but not sufficient for capturing innovation benefits from technology acquisitions. The third essay examines the performance implications of acquisitions that are conducted under a specific attentional orientation or below aspired level of performance. The findings of the third essay show that when executing multiple acquisitions, decision makers' attention toward entrepreneurship improves firm performance. In addition, findings show that acquisitions that are conducted as a response to a performance shortfall tend to improve performance more than acquisitions that are conducted when the performance is at the aspired level.
Translated title of the contributionBehavioristisen yritysteorian näkökulma yritysostoihin, yritysostojen menestykseen ja strategisiin valintoihin
Original languageEnglish
QualificationDoctor's degree
Awarding Institution
  • Aalto University
  • Maula, Markku, Supervising Professor
  • Keil, Thomas, Thesis Advisor
Print ISBNs978-952-60-5440-7
Electronic ISBNs978-952-60-5441-4
Publication statusPublished - 2013
MoE publication typeG5 Doctoral dissertation (article)


  • behavioral theory
  • attention based view
  • aspiration levels
  • acquisitions
  • innovation


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