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The Gap Partnership

Aggressive tactics likely to hinder business negotiations

High testosterone levels linked to collapsed talks

14 September 2010

Overly aggressive tactics are likely to hinder or lead to the collapse of business negotiations, according to new research.

A study by the University of British Columbia has revealed that chief executive officers (CEOs) with high levels of testosterone were more likely to be involved in collapsed talks and hostile takeovers.

Young bosses under 45 were found to be liable to reject lower offers out-of-hand which often resulted in failed negotiations and a resultant aggressive takeover bid.

Those with high testosterone levels were also prone to be impatient and uncooperative, which can also contribute to the likelihood of a dropped deal.

Professor Maurice Levi of the university's School of Business said: "We find a strong association between male CEOs being young and their withdrawal rate of initiated mergers and acquisitions.

"High testosterone responders tend to reject low offers even though this is against their interest."

The study, which has been published in the journal Management Science, analysed 350 merger and acquisition bids in the US between 1997 and 2007. 

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