Legitimacy Needs as Drivers of Business Exit [Paperback]

Carolin Decker develops and empirically applies a framework in which business exits serve the purpose of re-establishing a firms previously harmed legitimacy. Her findings support the idea that legitimacy needs drive the likelihood of fit-enhancing business exits in divesting firms.Foreword A diversified firms withdrawal from a business unit (i.e. business exit) is a very - portant phenomenon in management practice. In fact, studies from the U.S. show that approximately 2,500 business units are sold each year. According to a survey of the consulting firm Accenture among 150 executives from the Fortune 1000 companies, 59 % of the persons polled are momentarily divesting at least one business unit. - though divestitures are highly relevant in practice, researchers in strategic management tend to prefer investigating the counterpart of exit, namely the acquisition of business units. Trying to fill this gap, Ms. Deckers dissertation aims to shed light on the impact of business exit on the corporate strategy of the divesting parent firm. First, Ms. Decker summarizes the literature on business exit from the last three d- ades in a systematic and comprehensible way. This is a deserving task since the l- erature on this topic is widely dispersed, e.g. in the field of finance, amongst others. Referring to the existing findings, the literature review shows that prior research has mainly focused on two questions: What factors promote business exit? and What are the financial outcomes of business exit for the divesting parent firm?. Drawing on this background, the author convincingly argues that, up to now, the strategic impli- tions of business exit for the divesting parent firm have largely been ignored.Antecedents of business exit, barriers to business exits, outcomes of business exits, the need for legitimacy as a trigger of fit-enhancing vs. status quo preserving business exit, types of legitimacy needs and their role as drivers of fit-enhancing vs. status quo preselC"