How does the hubris hypothesis affect a company that is considering an acquisition?
A) The host country places additional tariff barriers on companies who want to acquire another business.
B) Home country managers are less likely to understand the culture associated with the acquired business.
C) Top managers typically overestimate their ability to create value from the acquisition.
D) The additional transportation costs devalue the potential for profit.
E) The acquired company must surrender its technological know-how.

Question

Quizplus · Accepted Answer

The hubris hypothesis suggests that top managers often overestimate their ability to create value from an acquisition, leading to overpayment and potential failure to achieve the anticipated benefits.

How Does the Hubris Hypothesis Affect a Company That Is