Does it pay to acquire technological firms?

Abstract The paper focuses on several research questions: How do the firms differ in terms of their strategic objectives for foreign acquisitions? What are the determinants of ‘success’ of acquisition? What are the differences between the American and German firms in terms of their acquisition strategies and successes? Our special interest was to get a closer look into the technological motive of the foreign acquisitions. This made a two-step procedure necessary. A first survey of 86 firms had to identify those acquisitions which were motivated by technological interests through a questionnaire. Findings: There are four classes of companies with different motives for acquisitions: Market oriented entrepreneurs, Short-term profit seekers, Technological acquirers, Preemptive market protectors. The second survey investigated the process and the results of acquisitions with a special view on the role of research and development through 60 interviews in 30 acquisition cases in both acquiring and acquired units. Findings: A network of variables explains the success. The most important are context variables (uncertainty, cultural differences), size of both firms, low degree of formalization, expertise, and lack of conflicts about technological philosophy.     

Who's acquiring whom? — Experimental evidence of firm size effect on B2B mergers and marketing/sales tasks

A recent study has revealed a marked growth in global mergers and acquisitions between firms from developed and developing countries. Unlike previous merger waves, however, companies in emerging markets are playing an increasingly important role. This highlights the need for greater scrutiny of more, and diverse, aspects of mergers. In particular, the size difference between firms involved in mergers and its impact on merger outcomes are of interest. This paper examines whether the involvement of differing numbers of employees (either from the acquiring firm or from the acquired firm) may influence merger success. Drawing on previous work in understanding organizational culture and merger dynamics, we conduct a laboratory experiment that not only confirms the presence of learning and conflict in organizational cultures in mergers but also presents new findings in relation to the relative size of the firms involved.     

Organizing for continuous technology acquisition: the role of R&D geographic dispersion

External technology acquisition has been proved to be an important strategy to enhance firms’ innovation performance. However, previous studies claim that companies acquiring technologies tend to not carry on with this strategy over time, thus limiting their attitude toward continuous technology acquisition. Moreover, the extant literature also highlights that this attitude is strongly influenced by their organizational structure. Therefore, in the present paper, we investigate the relationship between how firms organize R&D activities and continuous technology acquisition. Specifically, given the increasing globalization of technological development, we focus on the role of R&D geographic dispersion, and how its influence is moderated by firms’ technological diversification. We tested our hypotheses on longitudinal data of 303 biotechnology firms that acquired, at least, one USPTO patented technology over the period 1982–2012. Results reveal that R&D geographic dispersion is curvilinearly (inverted U-shaped) related to continuous technology acquisition, with negative returns occurring earlier in technology-diversified companies.     

Repeating a familiar pattern in a new way: The effect of exploitation and exploration on knowledge leverage behaviors in technology acquisitions

Research Summary: We identify two types of knowledge leverage behaviors undertaken by acquiring firms: integrated and independent knowledge leverage. We address how the prior exploitation or exploration orientation of acquirers influence these two modes of knowledge leverage behaviors. The degree of exploitation of acquirers promotes integrating their existing knowledge with acquired knowledge in innovative actions. In contrast, the degree of exploration of acquirers increases the likelihood that new innovations will use acquired knowledge without integrating it with their prior knowledge. In addition, the firm's prior acquisition rate moderates the relationship between the acquiring firms’ previous exploitation or exploration orientation and their knowledge leverage mode. The findings of this article suggest that pre‐acquisition innovation capabilities are distinct from but influence the post‐acquisition innovation actions. Managerial Summary: Firms often undertake acquisitions to gain access to new knowledge, but they can differ dramatically in how they leverage acquired knowledge. We show that the firm's prior innovation patterns drive this choice. Firms that have previously focused on incremental innovations in their internal innovation efforts tend to integrate acquired knowledge with their own prior knowledge. In contrast, firms that have previously pursued bold innovations tend to leverage acquired knowledge alone in new innovations. Thus, we show that firms use acquisitions as a means to extend their internal innovation patterns—firms that have focused on incremental innovations extend that with acquisitions by linking new innovations to their prior knowledge while firms that have pursued bold initiatives use acquired knowledge to move in new technology directions.     

When do structural holes in employees' networks improve their radical creativity? A moderated mediation model

Previous research has found a relationship between structural holes of knowledge networks, tie strength of knowledge networks, and creativity. Our study extends these findings by proposing that characteristics of R&D employees' team knowledge networks influence their acquired diversified knowledge from the team, which is critical to creativity. Our results based on 558 members of 92 R&D teams demonstrated that, in order to benefit from their broker position in acquiring diversified knowledge, R&D employees should maintain their tie strength toward the team members with whom they are connected.     

Strategic factor markets,scale free resources,and economic performance: The impact of product market rivalry

This paper analyzes how scale free resources, which can be acquired by multiple firms simultaneously and deployed against one another in product market competition, will be priced in strategic factor markets, and what the consequences are for the acquiring firms' performance. Based on a game‐theoretic model, it shows how the impact of strategic factor markets on economic profits is influenced by product market rivalry, preexisting competitive (dis)advantages, and the interaction of acquired resources with those preexisting asymmetries. New insights include the result that resource suppliers will aim at (and largely succeed in) setting resource prices so that the acquiring firms earn negative strategic factor market profits—sacrificing some of their preexisting market power rents—by acquiring resources that they know to be overpriced. Copyright © 2014 John Wiley & Sons, Ltd.     

Changing network pictures: Evidence from mergers and acquisitions

A merger or acquisition may cause dramatic changes in a business network, which in turn affect managerial cognition as well as managerial activities. We use the concepts of ‘network pictures’ and ‘networking’ to illustrate and analyse changes in managerial sense-making and networking activities following a merger or acquisition. The paper focuses on acquiring, acquired or merging parties and those companies with which they have direct customer relationships. Based on three case studies comprising seven acquisitions and one merger, we show that following a merger or acquisition managers may need to adapt their previous network pictures in a radical way; these adaptations are, however, not always realized as shifts in network pictures and adjustments in networking activities by all the managers involved. Whereas the merging parties' network pictures and networking activities are largely driven by their perception of customers' needs and developments, it is not certain that the merger or acquisition is enacted accordingly. The paper contributes to a clearer view on the conceptual interdependence of the constructs of network pictures and networking in multi-actor situations and thus it develops a network perspective on mergers and acquisitions.     

The Wealth Effects of Property Acquisitions: Evidence from Japanese and Singaporean REITs

This article examines the wealth effects of 228 property acquisition announcements made by REITs publicly traded in Singapore and Japan, which are the two largest REIT markets in Asia. Adopting an aggressive growth‐by‐acquisition strategy, the newly listed REITs acquired a number of properties within a short time period. Despite their regular activities, we observe the acquisition announcements are associated with a significantly positive abnormal increase in shareholder wealth averaging 0.38% in a 5‐day window around the event date. Controlling for the method of payment, buyer's acquisition strategy and seller's relationship with the acquiring REIT, the regression results show that the likely sources of economic gains associated with acquisitions are economies of scale and better management by acquiring firms. We also find strong evidence that the market reacts less favorably to acquisitions involving a portfolio of properties as opposed to a single property and weaker evidence that it reacts less favorably to mixed‐use acquisitions. These findings suggest the presence of premiums on transparency and corporate focus.     

我国制造业上市公司技术效率与技术进步实证研究

本文运用非参数的Malmqusit生产率指数法研究了2001—2005年期间中国制造业上市公司全要素生产率的水平及其变迁情况,并对其子行业和地区分布特征进行了探讨。同时对那些影响制造业上市公司生产率的主要因素进行了剖析。实证研究表明,中国制造业上市公司全要素生产率年平均增长1．9％,相对比较低,呈现出波动性特征。制造业上市公司全要素生产率的增长主要是由技术进步和效率改善共同引致的;开放程度比较高的行业,生产率也比较高,而高度垄断以及开放度低的行业如石油加工及炼焦业的生产率就比较低。东、中、西部地区制造业上市公司全要素生产率存在差异,东部最高,中部和西部次之,年均增长率分别为2．7％、1．7％、0．4％。股权集中度、企业盈利能力和企业年龄与制造业上市公司技术效率以及生产率的提升显著正相关,而股权制衡度、控股股东的性质与制造业上市佘司技术效率以及生产率的提升并不显著;企业年龄与上市公司技术进步没有必然的关系,而企业规模对对制造业上市公司技术进步有显著影响。     

中国独立石油公司海外发展机遇分析

2011年,中国石油公司海外油气上游并购显现新的特点,中资背景的独立石油公司海外油气业务取得突破性进展,已连续成功收购具有一定规模的海外油气上游资产并投入运营.建议中国独立石油公司的海外油气业务发展以适当规模的生产型项目起步,采取谨慎稳妥的投资战略,以边际油田开发项目为重点;关注风险较低的滚动勘探和潜力较大的前缘勘探项目,特别是政治高敏感地区的项目;适度介入以页岩气、页岩油或致密油为主的非常规资源项目.现阶段国内外经济及油气行业环境为中国独立石油公司海外上游业务发展创造了难得的机会,建议中国独立石油公司依靠专业服务团队科学合理地筛选油气项目,与中国国家石油公司在海外油气资产分布上互相补充,在项目运作上互相协同.     

2008年国际大石油公司经营状况及发展动向

受外部经营环境急剧变化影响,2008年国际大石油公司经营业绩呈现前高后低的特点,各公司净利润增减不一,原油产量、加工量和油品销量普遍下降,上游生产成本持续上升,经营现金流总体增长。面对经营环境的不利变化,国际大石油公司立足长远发展,看好长期能源需求增长的总体趋势,继续保持较高的投资水平;继续推进油气资源接替,加大对非常规油气资源的投资,开始进入油气潜力大但政治风险高的地区进行勘探开发;加大营销业务整合力度,大幅削减零售业务,减少资本占用;抓住金融危机时期的难得机遇,利用现金充裕优势,在全球范围内寻机收购符合公司发展的战略性资产;继续投资替代能源和可再生能源领域,但投资的力度和步伐有所放缓,投资方向和投资地区更加集中。未来国际大石油公司将继续保持其投资增长水平,不断加大对非常规油气资源的投资力度;继续进行结构调整,优化资源配置,以实现投资回报最大化。     

Predicting divestiture of unrelated acquisitions: an integrative model of ex ante conditions

The majority of unrelated acquisitions are divested shortly after their purchase. Often, those acquisitions-turned-divestitures result in strategic, organizational, and financial losses for both the acquiring and the acquired companies. To consider how such divestitures can be avoided, this study examined some of the differences between divested and retained unrelated acquisitions. The study integrated four explanations for why unrelated acquisitions occur and related them to the fates of such acquisitions. Unrelated acquisitions were hypothesized to be divested when they fail to realize some motives and expectations that prevailed at the time of acquisition. Two samples of unrelated acquisitions (135 from 1977 and 140 from 1987) were tracked over 5-year periods. The results indicate that motives and conditions at the time of acquisition, and changes in those motives and conditions, were related to the fates of the acquisitions. In addition, the relative importance of those factors varied across the periods studied. Discriminant analyses further demonstrate that most divestitures could be predicted correctly on the basis of those motivations and conditions. The implications of the findings are discussed. © 1997 John Wiley & Sons, Ltd.     

Customer relationship management processes: How faithful are business-to-business firms to customer profitability?

Marketing academicians and practitioners have over the past decade advocated the implementation of customer equity principles within firms. This article draws on adaptive structuration theory to frame the faithfulness of firms to acquiring and maintaining customers according to their profit potential. Using survey data from 158 business units engaged in business-to-business sales, this article examines the motivational effects of market growth rate and customization requirements, and the technology and information integration capabilities of the firm as determinants of firm adherence to treating customers according to their profitability. The study finds that firms are better at maintaining customers according to their profit potential than acquiring customers according to their profit potential. Further, maintenance faithfulness appears to have more ultimate impact on firm performance. The study suggests that pursuing customer profitability has limited effectiveness unless accompanied by a broader range of initiatives aimed at making the firm more customer-focused.     

Alliances, External Technology Acquisition, and Discontinuous Technological Change

A new paradigm, a radical innovation, the next killer application–the terms differ, but they all point to the same thing: a major change in the technology base for a mature industry. A discontinuous technological change (DTC) poses a significant challenge for the companies operating in the affected industry. The technology at the foundation of their products and markets has changed, and they must find a way to adapt to that change. To maintain their competitive standing, they must master the new technology and ensure that their products and processes fully exploit it. Noting that alliances offer an increasingly popular means for meeting the challenges that a DTC presents, C. Jay Lambe and Robert E. Spekman explore two issues related to alliances and DTC. First, why does DTC motivate companies to use alliances as a means for acquiring technology? And second, how do these motivations change during the various stages of the DTC life-cycle? By understanding the relationship between DTC and technology sourcing alliances, a firm can increase the likelihood of success for its alliances and thus improve the effectiveness of its product development efforts. When faced with a DTC, an established firm has three options for obtaining the new technology: merging with or acquiring a company that already possesses the technology; developing the required capabilities by using existing resources; or entering into some form of alliance. Because of time-to-market pressures and industry uncertainty, alliances often take precedence over the other two options for acquiring the new technology. However, the attractiveness of alliances also varies as a result of changes in the levels of urgency and uncertainty throughout the DTC life-cycle. The advent of a radical innovation is marked by a relatively low sense of urgency and high levels of industry uncertainty. Firms are not yet certain how the new technology will affect the industry, and they may not feel compelled to enter into technology sourcing alliances. As the new technology takes hold–and the levels of urgency and uncertainty peak–the motivation for entering into a technology sourcing alliance also reaches its highest level. Firms must move quickly to secure a position of market leadership, and the right alliance can jump-start those efforts. During the latter stages in the DTC life-cycle, the technology and the market requirements become more stable, the levels of urgency and industry uncertainty decrease, and firms often shift their focus from alliances to internal development and acquisitions.     

Becoming a pirate: Independence as an alternative to exit in the gig economy

How and why do platform workers ‘quit’? Drawing on original qualitative data from 84 ride-hail drivers, the author finds that platform companies use information asymmetries to downplay the true cost of working a ‘gig’. Once workers realize these costs, some exit, yet others cannot because they have come to rely on their ride-hail income to meet their short-term needs, a phenomenon the author refers to as ‘acquired dependence’. In response, the author finds these workers begin their own ‘pirate’ (illegal) taxi operations to decrease their dependence on platform companies. These findings are then used to develop an original survey instrument that tests if drivers’ ‘acquired dependence’ is associated with ‘pirate’ taxi operations. Using survey data from 330 ride-hail drivers, the author finds evidence that drivers with greater acquired dependence are more likely to develop off-app ‘pirate’ taxi operations. In doing so, this article develops both a new category of conflict and response for marketized employment relationships.     

Diversification and top management team complementarity: is performance improved by merging similar or dissimilar teams?

This study examines the impact of complementary top management teams (defined as differences in functional backgrounds between the acquiring and acquired firm managers) on post-acquisition performance. Based on a sample of 147 acquisitions completed during 1986–88, we find that complementary backgrounds have a positive impact on postacquisition performance in both related and unrelated acquisitions. Another major finding is that complementarity is negatively related to top management team turnover among acquired managers, suggesting that differences in functional backgrounds are more easily integrated into the new organization. Finally, top management team turnover among acquired managers is negatively related to postacquisition performance. These findings highlight the importance of examining complementarity in terms of differences, and reinforce the notion that differences have the potential to create unique value for the organization. © 1997 by John Wiley & Sons, Ltd.     

The value from acquiring and divesting a joint venture: a real options approach

This study examines the value created from acquiring and divesting a joint venture. Unlike previous research which focuses on parent firm factors, the study examines value in light of the reason behind the termination of the venture and the characteristics of the target market. Consistent with the real options view, the paper finds that ventures divested to refocus a parent firm's product market portfolio were associated with significant value creation. In contrast, ventures acquired with the objective of growth and expansion in a target market, while not associated with significant value creation, did not destroy value either. Apart from these results, the paper also finds that acquirers and divesters gained lesser value when they terminated ventures in uncertain and concentrated industries. These latter findings highlight an important caveat with regard to termination: joint ventures confer valuable flexibility which is also forgone once they are terminated. Implications are discussed. Copyright © 2005 John Wiley & Sons, Ltd.     

2010年我国企业海外并购重大问题分析

2010年,我国企业海外并购交易额爆发式增长。以国有企业为主体的海外并购活动,呈现出并购主体集中、区域集中和产业集中的特点。企业的国有特色导致并购活动易受政治因素影响,同时因战略目标不清晰、市场评价不准确、缺乏专业化国际人才队伍,我国企业海外并购成功率低于全球平均水平10个百分点。结合国家鼓励企业实施“走出去”战略,对我国企业未来实施海外并购提出几点建议。     

The allocation of resources for R&D in the world's leading pharmaceutical companies

A survey of 45 leading pharmaceutical companies has been used to investigate aspects of their Research and Development (R&D) strategies, the allocation of resources including the financing and staffing of R&D functions, and the numbers of New Chemical Entities (NCEs) in the development process. The companies included the top ten by R&D expenditure in 1992 (top 10 companies). The study identified characteristics of leading companies and provided comparative data. The principal findings are that:
top ten companies had the highest R&D to sales ratios, progressed more NCEs after the drug candidate selection stage in 1992 and had achieved a greater geographical decentralization of staff than any other company.
Japanese companies differed in some respects from western companies, even those of a similar size. They operated with smaller clinical and regulatory affairs functions and made detailed plans for R&D expenditure further ahead than western companies, on average, more than 5 years compared with 3 years.
an increase in aggregated R&D staffing had occurred between 1990 and 1992 in 33 companies for which data for both years were available and staff numbers had decreased in only five of those companies.
top ten companies differed from others in their apparent productivity measured in terms of staff or R&D expenditure per NCE after the drug candidate selection stage, utilizing more staff and having greater R&D expenditure per NCE.
The results also appear to indicate early signs of a change in the structure of the industry according to R&D expenditure, which has since become more apparent. There was a distinct polarization by R&D budget size among the respondent companies: five companies were spending $900m or more on R&D in 1992 while the majority of the rest were spending less than a third of that amount.