Process matters-The relevance of the decision making process for divestiture outcomes

We apply strategic decision making and organizational change theory to corporate divestitures and argue that key characteristics of the divestiture decision making process can contribute to explaining the variation in divestiture outcomes. We test our hypotheses in an empirical multi-source quantitative study and find evidence that analytical comprehensiveness in the evaluation of divestiture effects on the corporate portfolio has a positive impact on the effectiveness of divestiture choices, but analytical comprehensiveness at the focal business unit (BU) level does not enhance decision effectiveness. Our results further indicate that involvement of the affected BU management has a varying impact during the decision making process, with negative effects during the early phase and positive effects in the later phase.