The impact of cultural differences and acculturation factors on post-acquisition conflict

The importance of cultural factors as antecedents of post-acquisition conflict has been recognized in previous research. Nevertheless, this recognition has translated itself into relatively little wide-scale empirical research. Therefore, this paper empirically examines the impact of cultural differences and acculturation factors on post-acquisition conflict. It proposes that post-acquisition conflict can be explained by cultural differences and acculturation factors. The sample is based on domestic and international acquisitions carried out by Finnish corporations during the period 2001–2004. The results show that organizational cultural differences and organizational cultural preservation increase conflict, partner attractiveness decreases conflict, while national cultural differences have no influence on the level of conflict. These findings confirm that both organizational cultural differences and acculturation factors are needed to explain the essential dynamics of post-acquisition integration.     

Exploring the effects of mergers and acquisitions on acquirers' sustainability orientation: Embedding,adding, or losing sustainability

Mergers and acquisitions (M&A) have been primarily investigated from a shareholder-centric perspective of economic value maximization. However, this type of strategic initiatives also carries relevant implications for companies' capacity to respond to increasing social and environmental concerns among their stakeholders. In this study, we explore the processes related to, and nonfinancial consequences of, acquisitions involving sustainability-oriented firms. Leveraging interviews with business decision makers and secondary data covering the pre- and post-acquisition phases, we find three main paths leading the acquiring firms to embed, add, or lose sustainability. Therefore, three possible post-acquisition outcomes emerge, associated with differences in acquirers' focus on sustainability infusing the deal rationale, their due diligence activity, and practices of stakeholder management and integration in the post-acquisition phase.     

Managing the Post-acquisition Integration Process: How the Human Iintegration and Task Integration Processes Interact to Foster Value Creation

The paper reports a study of the post-acquisition integration process in three foreign acquisitions made by Swedish multinationals. Detailed interview data and questionnaire responses in both acquiring and acquired firms are presented. The sub-processes of task integration and human integration are separated out and it is shown that effective integration in these cases was achieved through a two-phase process. In phase one, task integration led to a satisficing solution that limited the interaction between acquired and acquiring units, while human integration proceeded smoothly and led to cultural convergence and mutual respect. In phase two, there was renewed task integration built on the success of the human integration that had been achieved, which led to much greater interdependencies between acquired and acquiring units.     

Post-acquisition Integration as Sensemaking: Glimpses of Ambiguity, Confusion, Hypocrisy, and Politicization

ABSTRACT   Though many studies have examined post-acquisition integration challenges, they have mainly focused on rationalistic explanations for the difficulties encountered in post-acquisition integration. There remains little knowledge of how the 'irrational' features of post-acquisition decision-making may impede organizational integration. This study attempts to bridge that gap by examining post-acquisition decision-making from a sensemaking perspective. The paper presents an in-depth analysis of a merger between a large Finnish furniture manufacturer and three smaller Swedish furniture companies. By focusing on the sensemaking processes surrounding integration issues, we uncover four interrelated tendencies that illuminate why the frequent problem of slow progress during post-acquisition integration occurs: inherent ambiguity concerning integration issues; cultural confusion in social interaction and communication; organizational hypocrisy in integration decision-making; and the politicization of integration issues.     

The Impact of Organizational and National Cultural Differences on Social Conflict and Knowledge Transfer in International Acquisitions

The purpose of this paper is to elucidate the effects of organizational and national cultural differences on international acquisitions. We argue that cultural differences prompt social identity building that leads to ‘us versus them’ thinking and thereby creates the potential for social conflict. We also maintain that the same cultural differences can contribute to learning in terms of knowledge transfer. We develop a structural equation model to test these hypothesized effects on a sample of related international acquisitions. Our analysis shows that cultural differences at the organizational level are positively associated with social conflict, but that national cultural differences can decrease social conflict. Furthermore, both organizational and national cultural differences are positively associated with knowledge transfer. This analysis shows the importance of disentangling the various effects that cultural differences have on international acquisitions. It also suggests that national cultural differences are less of a problem in international acquisitions than is usually assumed.     

Navigating the New Normal: Political Affinity and Multinationals’ Post-Acquisition Performance

The New Normal in the international business landscape reflects a world challenged by economic volatility and political hostilities. This suggests increased political risk, even for MNEs operating in developed markets. We use the legitimacy-based view of political risk to examine how political affinity between host and home markets may contribute to an MNE’s post-acquisition performance in a developed market. A high degree of political affinity signifies aligned national interests thus reducing legitimacy concerns faced by MNEs during post-acquisition integration. Based on cross-border M&A deals focused on U.S. targets completed by MNEs representing 45 countries between 2004 and 2012, we find that MNEs from countries with greater political affinity to the U.S. experience better post-acquisition performance. We also investigate two country-level factors that intensify the threat to legitimacy; the MNEs’ home market economic status and the presence of a financial crisis in the host market. Our findings indicate that political affinity mitigates risk for MNEs originated from emerging economies much more than for MNEs originated from developed economies, whereas a financial crisis reduces the benefit of political affinity.     

Do Foreign Greenfields Outperform Foreign Acquisitions or Vice Versa? An Institutional Perspective

abstract Prior studies of the comparative performance of greenfields and acquisitions have advanced competing arguments, with some arguing that greenfields should outperform acquisitions because acquisitions are costlier to integrate, and others that acquisitions should outperform greenfields because greenfields suffer from a liability of newness. Moreover, while the costs of integration and the liability of newness are at their greatest during a subsidiary's first years, prior studies have tested their competing arguments on samples containing older subsidiaries. We extend these prior studies by (1) developing an institutional theory‐based framework that simultaneously considers the costs of integration and the liability of newness, (2) recognizing that both types of costs vary with the level of subsidiary integration, and (3) focusing on the stage of their life during which subsidiaries predominantly incur these costs. To measure subsidiary performance, we ask managers of Dutch multinationals how their ex ante performance expectations compare to the subsidiary's ex post performance during its first two years. Analysing a sample of 191 foreign subsidiaries and controlling for entry mode self‐selection and other factors, we find that acquisitions outperform greenfields at low and intermediate levels of subsidiary integration, but that greenfields outperform acquisitions at higher integration levels.     

Institutional monitoring,coordination and corporate acquisitions in China

Within the context of corporate acquisition decisions of China’s Publicly Listed Corporations (PLCs), this paper investigates the monitoring and coordination behaviour of institutional shareholders. Institutional shareholders are divided into four groups: large outsider, large insider, small outsider and small insider. The outsider and insider categorization, respectively, represents the absence of significant business links with relevant PLCs. In China, institutional shareholders tend to either monitor the acquisitions decisions of PLCs or coordinate their response with the controlling shareholders (coordination in the present context amounts to cooperation). Using micro data from China’s stock market over the 2003–2008 period, we find that (through ex-ante coordination with the controlling shareholders) the insider institutional investment tends to increase the likelihood of PLC acquisitions. However, through ex-ante monitoring of the PLC acquisition offers, the outsider institutional investment tends to decrease the acquisition likelihood. We find that, through ex-post monitoring of PLC acquisitions, institutional investors with large shareholdings can help improve the post-acquisition performance of Chinese PLCs. On the other hand, institutional investors with small shareholdings tend to coordinate their actions with the controlling shareholders. Accordingly, small institutional shareholders cannot affect the post-acquisition performance of China’s PLCs. Finally, we find that the so-called ‘cherry-picking effect’ exists only in the case of large outsider institutional investors.     

企业并购后的智力资本整合研究

文章从并购双方的智力资本存量、智力资本整合的影响因素、智力资本整合机制和智力资本整合的绩效评价四个方面,构建了企业并购后的智力资本整合模型,为企业并购整合提供了一条系统研究思路。     

Untangling the Integration–Performance Link: Levels of Integration and Functional Integration Strategies in Post-Acquisition Integration

The integration–performance link created during post-acquisition integration has defied satisfactory theoretical explanation. To address this gap, we conduct a functional analysis to explore the intermediating mechanisms between the level of integration – which represents the extent of the target firm’s integration with the acquirer – and acquisition performance. We use six in-depth acquisition case studies in the medical technology industry to develop an integrated model with which to untangle the integration–performance link. First, our model connects the level of integration to specific functional integration strategies, which refer to the approaches acquirers employ to manage functional resources. Second, we identify value creation and value leakage as the two routes through which functional integration strategies impact acquisition performance. Finally, we propose two qualitative measures of acquisition performance: value gap and time delay. Our study suggests that a functional analysis of the integration–performance link may help resolve long-standing conflicts within the literature.     

基于技术寻求型跨国并购整合研究——以上汽并购罗孚为例

跨国并购的成功主要在于并购整合过程,而针对新兴市场参与跨国并购整合的研究还极缺乏。本文以上海汽车集团并购罗孚的知识产权和技术平台核心技术以及Ricardo 2010研发中心为案例,分析了其并购整合所采取的区域制组织结构及其产品策略。通过并购整合,上汽有效吸收和消化了罗孚的技术,实现了本土汽车自主品牌的跨越式发展。     

Foreign Direct Investment in the UK 1985–1994: The Impact on Domestic Management Practice

Foreign direct investment (FDI) into the UK has grown considerably in recent years. US, French, German and Japanese companies have generally accounted for the largest share of this FDI. In addition to greenfield and expansion investment, a major vehicle for inward FDI has been the acquisition of UKcompanies.
This paper examines whether nationally distinct approaches to management were introduced, following acquisition, among a sample of 201 UK subsidiaries of French, German, Japanese,US and UK companies. It provides data on the extent of changes and the post-acquisition influence of the new parent, comparing changes between the four foreign nationalities and a UK control group.
The study indicates that the process of being acquired and controlled by a foreign parent company was often followed by significant changes in management practice. Some changes were common to all acquisitions, including those by UK companies. A shift towards performance-related rewards and a stronger quality emphasis in operations are two examples. In addition, there was also evidence of effects which differed between nationalities. These conformed to accepted characterizations of national management practice in the case of Japanese and US acquirers, but less so in the case of French and German acquisitions. The findings suggest that present views of French and German management practice require further investigation.     

Determinants of premiums in acquisition transactions

This paper presents a framework to identify the determinants of acquisition premiums so as to explain their cross-section variability. Observed premiums are predicted to be positively related to (1) the magnitude of the acquiring firm's estimate of acquisition gains and (2) the acquired firm's relative bargaining strength. Increased acquisition gains are argued to result from two sources—underpricing and undermanagement. The variables representing these sources are constructed from pre-acquisition data. A gains variable based on the post-acquisition stock-price reactions of the acquiring and acquired firm is also constructed. It is argued that acquired-firm bargaining strength is enhanced by an increase in the degree of competition in the acquisitions market and by the inclusion of anti-takeover amendments in the acquired firm's corporate charter. The predictions are tested on a sample of 77 completed cash-for-stock and stock-for-stock acquisitions over the time period 1975–80. The empirical results provide strong support for the predicted effects of the determinants of (2) and mixed support for the determinants of (1). This is the first study to document the predicted effects of anti-takeover amendments on observed premiums.     

Acquisition Premiums, Subsequent Workforce Reductions and Post-Acquisition Performance

abstract    This study suggests that paying acquisition premiums leads to workforce reductions in the merged firm, which in turn results in poorer post-acquisition performance. This issue is important to scholars and practising managers given the pervasiveness and importance of knowledge and human capital to competitive advantage. In a sample of 174 major related acquisitions completed in the period 1992–98, results show a positive relationship between the premium paid for an acquisition and subsequent workforce reductions, controlling for a number of alternative explanations. Additionally, workforce reduction mediates the negative relationship between premiums and post-acquisition performance. The results suggest that the effects of workforce reductions following large premiums paid for the acquired firm can be detrimental to the interests of the organization.     

Determining paths of innovation: The role of culture on the adoption on organic farming management

The aim of this paper is to understand whether national culture is linked with operative performance of organic agriculture. The ultimate goal is, indeed, to measure the impact of social change on technical innovation and sustainability issues. We built an econometric model where the impact of some of the six dimensions of national culture by Geert Hofstede is tested on inputs and outputs of organic production, on a country-based scale. We collected data about the evolution of organic agriculture through the last two decades, extracting data about 27 countries of the European Union from 2000 to 2017. We tested the dataset into two passages: we first employed a DEA model to assess efficiency of organic farming, and then we correlated results to Hofstede 6-D model of national culture. We observed the existence of a relationship between culture and innovation, explaining the importance of determined values in people's management within the firm. The operative performance of organic agriculture is linked to determined culturally influenced business values. We used efficiency results as variables for measuring innovation approach based on cultural models. It has been enhanced the relevance to the nexus innovation-culture approaching to one of the most innovation-resistant industrial sectors.     

The role of human resource management in cross-border mergers and acquisitions

Cross-border mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy. Although human resource management (HRM) can play a value-adding role in the merger process, existing research and evidence does not clearly demonstrate how it can do so. This paper addresses the neglected human side of M&As by providing a strategic fit framework to assess the link between M&A strategy and HRM strategy. Because cross-border M&As are of an order of magnitude more complex than domestic mergers, we examine contingencies in national contexts that influence outcomes in the merger process. We draw on recent empirical evidence to highlight HRM roles in terms of resources, processes and values that reflect the influence of both strategic fit and national context in the integration stage of cross-border M&A.     

Managing employee expectations during acquisitions

There is a wide body of evidence that suggests that the management of 'human factors' in post‐acquisition implementation is important and, where it is badly managed, helps to explain why up to half of acquisitions are not deemed to be successful. A central feature in this process is the management of employee expectations. Using research insights drawn from the management and formation of expectations in recruitment and from breaches of the psychological contract, this article reports on research in organisations subject to a takeover within two years of the field work. Detailed findings on two of these cases are used to explore the dimensions of dual expectations in such circumstances. It is suggested that employees in acquired companies have concerns that become expectations concerning both themselves ('me') and their work group ('us'), ranging from immediate job and employment worries on transfer to longer‐term status and behavioural and cultural concerns in the 'new' organisation. These expectations will vary over time and have different facets according to the seniority of the employee, the degree of integration sought by the acquirer and the extent to which expectations formed are proven to be realistic and realisable. The two cases analysed reveal different aspects of unmet expectations in acquisitions. Seven factors were identified as influential in shaping employees' expectations in acquisitions: quality of communication, believability of information, trust in management action, credibility of leadership, fairness of action, consistency of action and communication and logic of management action or behaviour.     

The effect of entrant brand's ownership on national brands' positioning strategies

National brand manufacturers face the threat of new product entry from not only their traditional competitors (other national brand manufacturers) but also from their own customers (the retailer). We compare how national brands can limit the loss due to entry of these two types of entrants by positioning of their brands. Our results show that national brands position farther from one another when the new entrant is a store brand than when the entrant is another national brand. We also find that due to different positioning strategies of these two types of entrant brands—the entrant store brand positioning “in‐between” incumbent national brands whereas the entrant national brand positioning “away” from incumbent national brands—incumbent national brands may lose more from the entry of a weaker store brand than from the entry of a stronger national brand. Finally, we find that taking into consideration both pricing and product positioning decisions, consumer and social welfare are generally higher from store brand entry than from national brand entry.     

兼并重组小型煤矿管控模式和路径选择

随着全国煤炭主产省(区)关闭整顿、整合、兼并重组小型煤矿步伐的加快,如何有效管控数量众多的小型煤矿成为整合主体面临的严峻课题。义煤集团结合实际,积极进行探索实践,建立起了有效的三级管控模式;结合管控重点,构建了五条管控路径;分析了兼并重组过程中存在的主要问题,提出了有建设性的建议。     

Effects of Industry‐ and Region‐Specific Acquisition Experience on Value Creation in Cross‐Border Acquisitions: The Moderating Role of Cultural Similarity

Based on a sample of 222 cross‐border acquisitions by US firms in the service sector, our study examines the effects of acquiring firms' prior cross‐border acquisition experience in the same industry and geographic region as the acquired firm on shareholder value creation. Using the BHAR (buy‐and‐hold abnormal returns) methodology, we find that higher levels of industry‐specific and region‐specific acquisition experience translate into greater shareholder value creation for acquiring firms in subsequent acquisitions. In addition, our results indicate that the effects of industry‐specific acquisition experience on acquisition performance are contingent on the level of cultural similarity between the acquiring and acquired firm countries, with the benefits of prior experience being greater in acquisitions undertaken in culturally similar countries. We also find that the moderating effects of cultural similarity on the relationship between industry‐specific acquisition experience and value creation are contingent on the level of prior region‐specific acquisition experience possessed by the acquiring firm.