Michael Eisner's tragic flaw.(excerpt from 'Explaining Premiums Paid for Large Acquisitions: Evidence of CEO Hubris')

Corporations often pay more than book value for the firms they acquire, and this may be due to the exaggerated self-images of chief executive officers (CEOs). CEOs tend to believe that their firms' successes are due to their efforts, so they may feel that the value of acquired firms will rise,...

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Bibliographic Details
Published in:Harper's (New York, N.Y.) N.Y.), 1995-10, Vol.291 (1745), p.24
Main Authors: Hayward, Mathew L.A, Hambrick, Donald C
Format: Magazinearticle
Language:English
Subjects:
Acquisitions & mergers
Acquisitions and mergers
Behavior
Chief executive officers
Eisner, Michael
Psychological aspects
Strategic planning
Online Access:Get full text
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Summary:Corporations often pay more than book value for the firms they acquire, and this may be due to the exaggerated self-images of chief executive officers (CEOs). CEOs tend to believe that their firms' successes are due to their efforts, so they may feel that the value of acquired firms will rise, once they take over.
ISSN:0017-789X
2169-7612