Successfully Managing the Sociocultural Integration Process in International Acquisitions: A Qualitative Analysis of Canon's Acquisition of Océ

Based on a qualitative research approach that comprises in‐depth, semistructured executive interviews, employee observations, company data and external media accounts, this study analyzes the large‐scale acquisition of the Dutch Océ N.V. by the Japanese Canon Inc. Despite their significantly different national cultural heritages and considerably contrasting organizational cultural practices, both companies were able to efficaciously manage the sociocultural integration process and so successfully completed the acquisition. Building on a marriage metaphor model for sociocultural integration in international mergers and acquisitions, this study sketches out explicit links between national cultural value orientations and the respective organizational cultural practices, and discusses key success factors for each of the three stages of the acquisition process (i.e., preacquisition, closing, and postacquisition stages). This article further examines the interconnectedness of these key success factors across these three stages of the acquisition process by discussing interlocking best practices. In so doing, this study provides a more dynamic and encompassing account of the key factors that determine the success of the sociocultural integration process in international acquisitions. Theoretical and practical implications are discussed. © 2016 Wiley Periodicals, Inc.     

Sociocultural Integration in Mergers and Acquisitions: Unresolved Paradoxes and Directions for Future Research

Despite decades of research, the key factors for success in mergers and acquisitions (M&As) and the reasons why M&As often fail remain poorly understood. While attempts to explain M&A success and failure have traditionally focused on strategic and financial factors, an emergent field of inquiry has been directed at the sociocultural and human resources issues involved in the integration of acquired or merging firms. This research has sought to explain M&A performance and underperformance in terms of the impact that variables such as cultural fit, management style similarity, the pattern of dominance between merging firms, the acquirer's degree of cultural tolerance, and the social climate surrounding a takeover have on the postmerger integration process. In this article, we attempt to take stock of, and synthesize, the findings from research on sociocultural and human resources integration in M&A, to identify conflicting perspectives and unresolved questions as well as several underresearched areas, and then use our analyses to propose an agenda for the next stage of research in this field. © 2013 Wiley Periodicals, Inc.     

Partial or total integration in a cross‐border merger? Building a Nordic bank culture

The rate of failure for international mergers and acquisitions (M&As) is exceptionally high, since the integration of merging firms does not function well. Using a process perspective, this study aims to analyze the integration process in a cross‐border merger and the development of a common organizational culture. A framework based on premerger cultural and organizational fit, synergy, and resulting organizational culture is developed to study the growth of Nordea, a merger of four Nordic banks. Data include in‐depth interviews and secondary sources. This case study shows how cultural and managerial differences are dealt with and synergies realized. Building a broad organizational culture involving human resource management, decision making, technology, competitiveness, and customer relationships is necessary for merger integration, but it is costly and difficult. We suggest that success in mergers lies in managers creating a new cultural identity with unique values and perspectives.     

Disentangling the Value Creation Mechanism in Cross‐Border Acquisitions: A Process‐Oriented Approach

This study investigates the value creation mechanism in cross‐border acquisitions (CBAs) by employing a structural equation modeling technique and surveying 103 CBAs performed by Nordic firms. The results reveal that resource possession, resource picking, and resource utilization are three important strategic dimensions for realizing synergy and creating value in CBAs. Furthermore, mediation analysis shows that the two acquisition‐based dynamic capabilities—value identification and resource reconfiguration—act as important mediators in how the joining firms’ resource base impacts acquisition outcomes. The results shed light on the mechanisms through which the constructs influence value creation in CBAs and highlight the procedural and dynamic character of these determinants. The results also indicate that an integrative and process perspective, such as the “input‐process‐output” model proposed in this study, is an important step forward in merger and acquisition (M&A) research. Moreover, numerous research findings offer tactical implications for international acquirers. © 2016 Wiley Periodicals, Inc.     

The Effect of Cross‐Border Mergers and Acquisitions on Earnings Quality: Evidence from China

Despite the fruitful research on the motives and outcomes of cross‐border mergers and acquisitions (M&As) of Chinese multinational corporations (MNCs), there has been scant research on the impact of cross‐border M&As on corporate governance. In this article, we fill the research gap by exploring whether cross‐border M&As may lead to an improvement in corporate governance of Chinese acquirers. In particular, we examine the impact of cross‐border M&As on earnings quality of Chinese MNCs. We find that the acquisition of a target firm from a developed country leads to a significant improvement on the acquirer's earnings quality. In comparison, the acquisition of a target from an emerging market does not have such an impact. Our results are robust to various corporate governance measures, alternative econometric methods, and controls of relevant firm characteristics and macroeconomic variables. Finally, we show that the effect of cross‐border M&As on earnings quality is more pronounced in non‐state‐owned enterprises (non‐SOEs) that have conducted large M&A deals. Our article offers new insight to the international business literature on latecomer perspective and liability of foreignness. © 2016 Wiley Periodicals, Inc.     

Critical Success Factors through the Mergers and Acquisitions Process: Revealing Pre‐ and Post‐M&A Connections for Improved Performance

The mergers and acquisitions (M&A) literature is vast, spanning over half a century of research endeavor and drawing upon multiple disciplinary perspectives. Despite this wealth of material, the field suffers from a lack of connectedness. There is limited and compartmentalized understanding of the complexities of the M&A process, as the various streams of M&A research are only marginally informed by one another. As a result, the existing body of knowledge on M&A research remains fragmented. There is a need to establish links between existing approaches to M&A and the critical success factors they each promote. In this article, the need for a pluralistic and holistic explanatory framework that reflects the multidisciplinary nature of M&A is highlighted. The article shows that dynamic relationships between different perspectives on M&A and critical success factors matter. Identifying these relationships may help to further our understanding about M&A performance outcomes. Thus, the paper focuses on both relationships within each stage and between stages of the M&A process. © 2013 Wiley Periodicals, Inc.     

Integration by Emerging Economy Multinationals: Perspectives from Chinese Mergers and Acquisitions

The integration process of international mergers and acquisitions by emerging economy multinationals is fraught with challenges of liabilities of foreignness and country of origin. We use insights from institutional theory and draw on the experience of Chinese international mergers and acquisitions to explore these challenges faced by emerging economy multinationals during postmerger integration. We find that these challenges, which are primarily caused by informal institutional differences, can be overcome by developing organizational capabilities for integration and employing mechanisms for appropriate control and justice during the integration process. The study contributes to the ongoing discussions about the relevance of sociocultural influences in the successful integration of international mergers and acquisitions. Our framework proposes initiatives that managers from emerging economies can take to overcome postmerger integration challenges. © 2016 Wiley Periodicals, Inc.     

Light‐Touch Integration of Chinese Cross‐Border M&A: The Influences of Culture and Absorptive Capacity

As a major entry mode of global strategy of Chinese MNCs, Chinese cross‐border merger and acquisition (M&A) is still a less understood phenomenon, in particular the post acquisition phase. This study contributes to this rising, important and interesting phenomenon utilizing an explorative research method. By integrating synergy potential, culture influences and the learning perspective, we suggest a multilevel perspective in understanding Chinese cross‐border M&A. A novel post acquisition integration approach, namely light‐touch integration, is investigated, and supported by newly assembled empirical evidence in the context of Chinese M&A in Germany. Light‐touch integration essentially synthesizes the preservation and symbiosis integration approaches due to the contextual characteristics of Chinese cross‐border M&A, such as cultural influences and the learning perspective. Understanding the cultural and learning influences can facilitate and smooth the activities involved in the post acquisition phase. The light‐touch integration approach offers ample opportunities for joint collaborations between and mutual benefits for acquiring firms, acquired targets and third party organizations. © 2013 Wiley Periodicals, Inc.     

Understanding cross‐border mergers and acquisitions of African firms: The role of dynamic capabilities in enabling competitiveness amidst contextual constraints

This article builds on existing international business literature that examines the drivers of cross‐border mergers and acquisitions (M&As) within emerging and developing economy contexts, theoretically exploring how dynamic capabilities (DCs) are connected to these drivers, and how African emerging multinational enterprises (EMNEs) can pursue them to achieve competitiveness. The article's contribution is the development of a DC framework and testable propositions for African EMNEs' cross‐border M&As. The theoretical framework shows the division of DC dimensions—sensing, seizing, and transforming—and establishes explanations for their linkage with institutional and resource drivers for African EMNEs' cross‐border M&A competitiveness. In addition, the article outlines managerial implications to this effect. Overall, the article contributes to the emerging literature on the international expansion of African EMNEs through cross‐border M&As by underscoring the role of DCs.     

Comparison of merger and acquisition (M&A) success in horizontal,vertical and conglomerate M&As: industry sector vs. services sector

Due to the high failure rate of the merger and acquisition (M&A) strategy, this study raises the question of whether there is a difference between the types of M&A in relation to M&A success. The study presents a research model to examine how each of the types of M&As – horizontal, vertical and conglomerate – separately affect M&A success. The study compares between the industry sector and the services sector. The results show that horizontal M&As lead to integration success and synergy success in the industry sector, but in the services sector, it leads to a failure of the integration stage, and in the both sectors it hinders the profitability. Vertical M&As lead to a success only in relation to synergy in the services sector, while conglomerate M&As lead to integration success and synergy success in the both sectors, but without success in relation to the profitability in the both sectors.     

The Emergence of Contemporary Chinese Enterprise: The Heterogeneity of National Culture,Corporate Controls and Integration Approaches in M&As

This article aims to explore the emergence of the three main types of contemporary Chinese enterprises (CCEs),¹ the heterogeneity of their underlying cultures beyond Confucianism, their adopted corporate controls and their implications for mergers and acquisitions (M&As). An interdisciplinary literature review is provided to investigate the interrelated concepts between ancient Chinese wisdom, traditional Chinese culture as embedded in its national culture, and dissimilar developments in the corporate culture of CCEs. The implications for corporate controls in relation to postmerger integration approaches are also examined. Theoretical analyses and propositions are then made regarding the reinforcing cultures, adopted corporate controls and the integration approaches among the three main types of CCEs in their M&A initiatives. Through a multiple‐case study of three proposed clusters of CCEs with distinct ownership structures, this article reveals the characteristics of these respective clusters as they seek growth and development through regional and international M&As. The heterogeneity among the clusters is reflected in their variations in human capital, corporate governance, and controls, as well as the efficacy of their M&A activities. © 2013 Wiley Periodicals, Inc.     

Multiple Levels of Culture and Post M&A Integration: A Suggested Theoretical Framework

A substantive body of research suggests that cultural differences represent impediments to merger and acquisition (M&A) integration. Yet current findings on the subject differ in terms of the impact of cultural differences. To date, M&A research has failed to capture the diversity of cultural influences that affect merging organizations. This conceptual article addresses this theoretical gap. Its purpose is to suggest a theoretical model of the culture‐integration relationship. This model helps explain the inconsistent results of previous studies, and provides challenging opportunities for future research. © 2013 Wiley Periodicals, Inc.     

我国企业跨国并购的整合风险及应对之策

近年来,我国企业在实践“走出去”战略的过程中,大胆尝试跨国并购,颇有收获。但是,不少企业在跨国并购整合风险的问题上存在着理论和实践误区,它们常常仅关注并购本身,轻视整合,从而使不少前景看好的并购,最终以失败告终。因此,本文借鉴国际企业的并购经验,联系我国企业跨国并购的实践,拟就我国企业跨国并购的现状、特点、整合风险及对策,做一探讨。     

Merger and acquisition motives and outcome assessment

Research on merger and acquisition (M&A) outcome often focuses on tangible financial results and the reaction of stock markets. This research attempts to provide a more accurate assessment of M&A performance by linking tangible as well as intangible M&A motives to outcome assessment. The theoretical framework is based on evaluation theory. We analyze four case studies of international M&As conducted by European companies. The findings indicate that M&A outcome can be more accurately measured by aligning it with the motives defined by the acquiring firms. They suggest that M&A outcome assessment should be considered as a process covering both premerger and postmerger stages.     

Mergers & acquisitions research: A bibliometric study of top strategy and international business journals, 1980–2010

Mergers and acquisitions (M&As) are important modes through which firms carry out their domestic and international strategies and have been noted as the CEOs favorite strategy. As a significant field of study, M&A-research has accumulated substantial knowledge. This bibliometric study examines the extant strategy and international business literature on M&As. Methodologically, we examined a sample of 334 articles published in sixteen leading management/business journals, during a 31 year period — from 1980 to 2010. The results provide a global perspective of the field, identifying the works that have had the greater impact, the intellectual interconnections among authors and works, the main research traditions, or themes, delved upon on M&A-related research. Structural and longitudinal analyses reveal the changes in the intellectual structure of the field over time. A discussion on the accumulated knowledge and future research avenues concludes this paper.     

并购整合研究综述

并购后整合是价值创造的来源和并购成功的重要保证,因此这是一个值得研究的领域。整合的风险来自于整合的复杂性,整合的过程识别了整合所需要经历的各个关键阶段,整合的内容则明确了各个阶段的任务,而整合的策略通过对整合模式和经验的研究,为整合提供了具体的指导     

Hybridization: Understanding the microdynamics of a postacquisition integration process

There is no shortage of theoretical or empirical research on mergers and acquisitions (M&A). Knowledge on the subject has grown substantially in recent decades. However, the integration of firms involved in M&A remains a challenging and often unsuccessful process. In addition, there is a scarcity of research on temporal dynamics within integration projects. This article reports on the postacquisition integration of a business school into a university using the concept of organizational hybridization as a theoretical lens. The aim was to identify the microdynamics that occurred during integration. We conducted an inductive case study, interviewing professionals involved in the integration process, analyzing a wide range of documents, and conducting participant observation over 6 years. Field research revealed that different organizational components underwent distinct hybridization processes that were characterized by different degrees of conflict. This study contributes to the understanding of the microdynamics that occur in postmerger or postacquisition integration processes, focusing on the complex adjustments inherent in these developments.     

An integrative model of the role of knowledge in the internationalization process

Knowledge is considered an essential resource in a company’s internationalization process, both from the sequential point of view and from the perspective of International Entrepreneurship. This paper proposes a model to integrate the influence of knowledge on international behavior based on proposals taken from the literature on organizational learning in multinational companies. The model comprises several phases: prior knowledge; acquisition of new knowledge; integration of both sets of knowledge; action and feedback. Using the proposed model, different courses of action are identified for further research into the process of company internationalization.     

BOOK REVIEWS

Purpose: Companies engage in business relationships for a variety of reasons, including specialization, product development, and building competitive networks. Research has demonstrated that mergers and acquisitions (M&As) may challenge ongoing business relationships. The purpose of this article is to investigate whether and how competition authorities consider business relationships when evaluating M&As.

Methodology: The article uses the documentation from 450 M&As reported to the Swedish competition authority to capture the way in which an authority evaluates M&As. The Swedish competition authority evaluation corresponds to other national and international evaluation procedures.

Findings: The findings indicate that the competition authorities neglect an important aspect of business life, namely companies forming business relationships. The competition authorities evaluate M&As on the basis of risk for price increases, and consequently disregard such issues as heterogeneity in demand and offerings, and values built into existing business relationships.

Originality/Value/Contribution: The article contributes to research on business relationships through exploring how a public authority deals with such relationships. It also contributes to research on mergers and acquisitions through examining how these activities are evaluated by competition authorities. Furthermore, the article contributes to competition research by reflecting on competition law concerning M&A regulations in relation to business relationships.