Research On The Impact Of The Top Management Team’s Social Capital On The M&A Strategic Choice And The Performance

Top Management Team is the business decision makers and managers, whosehuman capital and social capital characteristics play an important role on theenterprise operations and value creation. China is in its economic transition period,the lack of formal regulations makes the informal factors such as the TMT’s socialcapital, including political network relations and the working experience play animportant role in the allocation of resources. Social capita, as a kind of valuableresource of Top Management Team, has important influence on enterprise’s m&astrategy selection, and then finally affect the performance of the company.Based on the above path analysis mode “Resource-Strategic-Performance” thepaper does the detailed analysis from three aspects: the literature review, theoreticalanalysis and empirical verification. Based on the resource dependence theory, socialcapital in this paper is defined as the social network structure owned by a group ororganization, which is the superposition, consolidation and expansion of socialrelation network of all the group members. Adopting the "stakeholder values"dimension classification method of social capital, we divide social capital intopolitical network relationships and working experience. We respectively analyzesthe relationship of political network and merger and acquisition strategy choice, therelationship of working experience and merger and acquisition strategy choice, andthe different m&a performance of different M&A strategic choices. When analyzingthe working experience’s impact on the m&a strategic choice, we subdivide it intoindustry experience and internal industry experience and external industryexperience. Based on the theoretical analysis and mechanism analysis, we select151M&A listed company samples from2009to2010, do the descriptive analysis,the correlation analysis and the relations between regression analysis of the social capital, M&A strategic choice and the performance.We ultimately concluded that:(1) the most important factors of the socialcapital characteristics affecting M&A strategy is the work experience of the TopManagement Team, while there is no significant impact on M&A strategy of thepolitical networking feature.(2)The internal industry working experience willencourage enterprises using the relevant M&A strategy, while the external industryworking experience will encourage the using of the diversification M&A strategy.(3) Different types of M&A strategy lead to different performance. The higher ofthe M&A diversification degree, the worse of the M&A financial performance is.The higher the degree of correlation, the better of the M&A financial performanceis. But there is no significant difference between different types of M&A marketperformance.