Conjectures on Cognitive Simplification in Acquisition and Divestment Decision Making

Acquisition and divestment decision situations generally are characterized by complexity and ambiguity. This paper proposes the idea that business decision makers may use cognitive simplifying processes in defining such ill-structured problems. A number of specific simplifying processes that may be...

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Bibliographic Details
Published inThe Academy of Management review Vol. 10; no. 2; pp. 287 - 295
Main Authors Duhaime, Irene M., Schwenk, Charles R.
Format Journal Article
LanguageEnglish
Published Briarcliff Manor Academy of Management 01.04.1985
Subjects
Acquisitions & mergers
Analogies
Business structures
Cognitive biases
Corporate strategies
Decision making
Divestiture
Divestment
Divestments
Field research
Financial management
Management decisions
Observational research
Organizational behavior
Research biases
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Summary:Acquisition and divestment decision situations generally are characterized by complexity and ambiguity. This paper proposes the idea that business decision makers may use cognitive simplifying processes in defining such ill-structured problems. A number of specific simplifying processes that may be used in acquisition and divestment are discussed. These ideas are supported by examples from recent field research and the business press. Impacts on resulting decisions are discussed; future research directions are suggested.
ISSN:0363-7425
1930-3807
DOI:10.2307/257970