Merger Failures

This paper proposes an explanation as to why some mergers fail, based on the interaction between the pre‐ and post‐merger processes. We argue that failure may stem from informational asymmetries arising from the pre‐merger period, and problems of cooperation and coordination within recently merged firms. We show that a partner may optimally agree to merge and abstain from putting forth any post‐merger effort, counting on the other partner to make the necessary efforts. If both follow the same course of action, the merger goes ahead but fails. Our unique equilibrium allows us to make predictions on which mergers are more likely to fail.     

Designing and aligning an HR system

This article reports the results of a study conducted in the wholesale banking arm of a major international financial institution in Ireland. This took a multi‐level perspective in exploring the construction of the HR system at group, divisional and strategic business unit (SBU) levels within the firm. The findings suggest that it is critical to consider the level of analysis in both the construction of theHR system and in its operation at different levels within the multi‐divisional firm. The research found that it is at SBU level that a coherent HR system is most likely to emerge, as at this level appropriate processes can be adopted to implement HR policies, practices and philosophies. However, the negotiations and interpretations of HR practice that dominate traditional divisional/business unit arrangements may be detrimental to theemergence of a coherent HRsystem.     

Organisational practices and the post‐retirement employment experience of older workers

This study compared people aged 50 to 65 who had retired and returned to work (n = 90), who remained in their career jobs (n = 198), and who retired and remained out of the workforce (n = 321). The significant differences between post‐retirement and career employment were associated with the HR practices within organisations and were not related to the characteristics of the organisations in which post‐retirement and career jobs were found. The HR practices were rated as especially important in influencing the decision of retirees to return to work. The findings suggest that people in post‐retirement jobs are drawn to organisations that provide HR practices tailored to the needs and desires of older workers. The results also indicate that if employers expect to address labour shortages by encouraging retirees back into the workforce, they are going to have to implement those HR practices that are important to this group.     

Globalization of HR at function level: four UK-based case studies of the international recruitment and selection process

A series of the changes are being wrought on a range of IHRM functions – recruitment, global staffing, management development and careers, and rewards – by the process of globalization highlighting the difference between globally standardized, optimized or localized HR processes. However, our theoretical understanding of the issues involved is still driven by concepts rooted in global staffing strategies based on the management of small cadres of international managers, such as expatriates. The fragmentation of international employee populations and the changing structure and role of international HR functions has raised three important questions. The first concerns the study of globalization processes at functional level (staffing) and whether this can provide useful insights for the IHRM literature. The second concerns the indicators that best evidence globalization of staffing at the functional level, and whether these might form the basis of useful future research. The third concerns the patterns or strategies within the global HR recruitment activity of organizations across domestic and overseas labour markets and whether these patterns can be explained by existing theory. This paper reports on a study of firm-level developments in international recruitment and selection, drawing upon an analysis of four case studies each conducted in four theoretically derived contexts of centralized or decentralized control and co-ordination, and focus on domestic or overseas markets. It examines the disparities between policy and practice through interview of HR actors at corporate level and in country operations.     

The international drivers of domestic airline mergers in twenty nations: integrating industrial organization and international business

The domestic airline merger phenomenon of the late 1980s and early 1990s sparked a great deal of Industrial Organization (IO) literature; yet, that literature neglected non‐US domestic mergers and potential for international competitive gains. Using an International Business perspective to complement an IO analysis, I argue that factoring international competitive incentives helps explain domestic airline merger activity. A Cournot model of airline competition illustrates that domestic mergers, via enhanced domestic networks and reduced domestic competition, generate international competitive gains. Further, empirical tests—using a structural equations approach on panel data covering interhyphen‐national city‐pair market segments—support domestic mergers improving international competitiveness. Copyright © 2006 John Wiley & Sons, Ltd.     

Merging with a buyer group member

We examine a merger between a national retailer and a local retailer who is a member of a buyer group. While the traditional literature on mergers assumes an oligopolistic industry (where the merger takes place) supplied by a perfectly competitive one, we assume here that retailers obtain their input from a supplier that can offer quantity discounts. In this setting, a merger can be profitable for insiders (solving the merger paradox) and can also be more profitable for insiders than for outsiders (solving the free‐riding problem). This result holds even if the merged firm ends‐up with a small share of the market. However, welfare decreases post‐merger. Copyright © 2009 John Wiley & Sons, Ltd.     

Post‐Formation Processes in Eastern and Western European Joint Ventures*

abstract This study examines the post‐formation processes that firms use to create successful international joint ventures (IJVs). Scholars have suggested that IJV performance is dependent on the post‐formation processes firms institute to overcome barriers to success created by differences in national culture, trust, ownership positions and control mechanisms. Based on a longitudinal study of eight eastern/western European IJVs, our study provides insights into these post‐formation processes, how these processes relate to each other, and how they relate to managers’ evaluations of IJV success.     

Efficiency in pre‐merger and post‐merger non‐bank financial institutions

A two‐part process is employed to analyse the role of efficiency in merger and acquisition (M&A) activity in Australian credit unions during the period 1993–1997. The measures of efficiency are derived using the non‐parametric technique of data envelopment analysis. The first part uses panel data in the probit model to relate pure technical efficiency, along with other managerial, regulatory and financial factors, to the probability of merger activity, either as an acquiring or acquired entity. The results indicate that loan portfolio diversification, management ability, earnings and asset size are a significant influence on the probability of acquisition, though the primary determinant of being acquired is smaller asset size. The second part uses a tobit model adapted to a panel framework to analyse post‐merger efficiency. Mergers appear to have improved both pure technical efficiency and scale efficiency in the credit union industry. Copyright © 2001 John Wiley & Sons, Ltd.     

Determinants of central control and subsidiary autonomy in HRM: the case of foreign‐owned multinational companies in Spain

This article examines the factors affecting HRM subsidiary autonomy within multinational companies (MNCs). Drawing on institutional theory arguments, along with an analysis of the impact of international HRM structures, it attempts to identify the multiplicity of factors influencing subsidiary autonomy with regard to HRM. Using data gathered from a highly representative survey of foreign MNC subsidiaries located in Spain, the results identify a number of factors that hold explanatory power. First, the distance between the home and the host country in terms of variety of capitalism is crucial in explaining variations in subsidiary autonomy. In addition, international HR structures, such as the existence of an international policy‐making body and the use of HR shared service centres or HR data reporting mechanisms, are also important in accounting for the degree of autonomy over HR issues experienced by the MNC subsidiaries in our study.     

Uncovering competitive and institutional drivers of HRM practices in multinational corporations

Current international human resource management (IHRM) literature focusing on multinational corporations (MNCs) presents evidence of both similarities and differences in the HR practices adopted in different global locations. However, the drivers behind this duality require more detailed investigation. This article focuses on exploring why MNCs position themselves within global markets as they do, exploring how extant theory can help explain the drivers behind both global and national HR practices. Based on a worldwide sample of in‐depth interview‐based case studies of well‐known MNCs, we explore the ways in which different firms react to both institutional and competitive pressures in selecting their approach to HRM. The findings uncover a differentiation between external global competitive isomorphic pressures, external national institutional isomorphic pressures, and internal processes of strategic choice and competitive differentiation. It is suggested that MNCs face all three drivers of HRM simultaneously, leading to different patterns of practice adoption, adaptation and innovation.     

The role of leadership in successful international mergers and acquisitions: Why Renault‐Nissan succeeded and DaimlerChrysler‐Mitsubishi failed

This article compares and contrasts the Renault‐Nissan and DaimlerChrysler‐Mitsubishi mergers to consider the relative and combined effects of national and organizational culture on the performance of Nissan and Mitsubishi. It also examines the reasons why the Renault‐Nissan merger was successful and the DaimlerChrysler‐Mitsubishi merger failed. It finds that Japanese national culture influenced organizational culture and HRM practices, which created organizations that had no sense of urgency, profit orientation, or accountability and led to poor market and financial performance. It also finds that leadership was a major factor impacting on the success of the turnaround efforts of these two organizations. These findings have implications for leaders and human resource management practitioners engaged in international business and are of particular relevance to Western organizations working with organizations in high‐context countries with a collectivist rather than individualist orientation. © 2012 Wiley Periodicals, Inc.     

Union absorptions in times of restructuring: the importance of attitude towards merger in predicting post‐merger attachment levels

Unions frequently restructure through merger, most often in the form of absorptions involving one bigger union absorbing a smaller one. However, the individual‐level effects of merger resulting in big amorphous organisations remain unclear. In this article, we highlight the role of the individual member in union absorptions, and investigate the relative importance of being a member of a large absorbing union or a small absorbed union, as well as the attitude of members towards merger in predicting post‐merger member attachment. The results from longitudinal data before and after absorption showed that members' attitude towards merger significantly predicted the members' attachment levels after absorption—this was, however, not the case for union commitment. We also uncovered a significant interaction indicating that the effect of members' attitude towards merger was more strongly related to perceptions of union support and instrumentality among members of the absorbed union.     

Human resource practices and migrant workers' turnover intentions: The roles of post‐migration place identity and justice perceptions

This study adopts an identity perspective to explore the relationship between human resource (HR) practices and turnover intentions among migrant workers. Informed by HR attribution theory, we propose that the effects of HR practices will be more effective in reducing turnover among migrant workers when these workers have stronger post‐migration place identities and when they experience a sense of justice regarding their work and nonwork environments. Using a three‐way interaction model, we tested these ideas on a sample composed of 1,985 migrant workers in 141 firms in China. The results support the theoretical model.     

The Impact of the Big 8 Mergers on Market Power: Evidence from the Hong Kong Market

This study examines the impact of the Big 8 mergers on market power in an audit market where the merging firms have little presence. Audit fee changes for each merger participating firm are identified and fee changes for several post‐merger years are examined. The pre‐merger differential market power between the merging and non‐merging long‐established Big 8 firms (Price Waterhouse and KPMG Peat Marwick) in Hong Kong provides a unique opportunity to examine whether the mergers could help the merging firms to increase their market power. The results are consistent with the hypotheses that the audit fees of the merging firms were significantly lower than that of the non‐merging, long‐established Big 8 firms before the mergers, but the audit fees of the merged firms increased significantly to a level comparable with that of the latter group after the mergers. In addition, the market share of the merged firms increased significantly after the mergers. However, no association is found between market concentration and market power. Overall, the results show that the Big 8 mergers have helped the merged firms increase their market power and market share in the Hong Kong audit market where they had little presence.     

Continuity and Change in Mergers and Acquisitions: A Social Identity Case Study of a German Industrial Merger*

abstract It is crucial from an employee's point of view to perceive some degree of stability even in times of major organizational change. This paper examines the role of a sense of continuity for organizational identification after an organizational merger. We argue that mergers and acquisitions so often end in failures partly because the change is designed in discontinuous ways and employees do not feel they are doing the same job after the merger as before. Such discontinuous change engenders a critical tension between positive and negative effects of identification that has not yet been fully understood. To deepen the understanding of this tension, in‐depth interviews were conducted in a recently merged German industrial company. Based on these qualitative data we demonstrate how features of the post‐merger company structure and the way it was implemented may have eroded organizational identification. Finally, we propose a parsimonious model to be tested by future research, in which the sense of continuity is consisting of both observable as well as projected continuity.     

Exploring Discrimination on the Basis of International Experience: The Colonial Mindset Bias in the Context Of Pakistan

Discrimination in the labor market has historically been associated with gender, race, ethnicity, and age. This article introduces another basis of discrimination—international experience—which may exist in developing countries because of a colonial mindset. The research is an exploratory study, based on an analysis of in‐depth semistructured interviews with 8 HR managers, 19 employees with international experience, and 24 employees without international experience (N = 51) working in the oil and gas and telecom sectors of Pakistan. Results indicate some initial evidence of a bias, and hence discrimination during recruitment for entry‐level positions. Findings also indicate that international experience may contribute to enhanced employment opportunities, career progress, and higher compensation at senior‐level leadership positions, leaving those without such experience at a disadvantage. While in some cases international experience may be a genuine occupational requirement (GOR), further research is needed to identify whether this is in fact a GOR for senior level positions in all types of organizations or indirect discrimination under the guise of GOR. Recommendations for HR managers and organizational leaders are also set out, which can be applied in practice to foster equality of opportunity in the workplace. © 2017 Wiley Periodicals, Inc.     

Understanding how HR systems work: the role of HR philosophy and HR processes

Despite the proliferation of studies of HR systems, there are still substantial gaps in our understanding of how such systems actually work. This article, by focusing on the neglected areas of HR philosophy and HR processes in the composition of HR systems, and by using a qualitative, employee‐centred approach in the collection and analysis of data, provides new insights into the working of HR systems. Using data from interviews with 56 knowledge workers employed in the information and communications technology sector in Ireland and the UK, we explore employee‐level reactions to two different types of HR systems. We highlight the various ways in which HR processes interact with HR practices and the different outcomes that may result, and we identify the key role of HR philosophy in HR system operation.     

Flexible global working arrangements: An integrative review and future research agenda

The topography of global mobility within multinational enterprises (MNEs) is evolving where we now have a portfolio of flexible global working arrangements (FGWAs) including: international business travellers, flexpatriates, short-term international assignees, international commuters, and rotational assignees. The need for more agile structures and more efficient mechanisms to transfer globally dispersed knowledge are two key enablers in this evolution. With increased interest, this paper offers the first systematic, integrative review of 100 articles on FGWAs. The review indicates that these forms of global work appear to be a somewhat overlooked double-edged sword in that they may confer significant but unrealised value for MNEs alongside hidden, adverse consequences for individuals. Notable was the lack of insight into the HR function's input or oversight at either a strategic or operational level. We find that there is a distinct lack of strategic linkages to global mobility and/or HR functions. We propose a research agenda that centres on better understanding the international HR function's role and responsibility in providing a more strategic and sustainable perspective of these increasingly common FGWAs alongside virtual work. The COVID-19 pandemic may offer a critical juncture point in which there is greater strategic consideration on the utilisation and support of such arrangements.     

Sharing knowledge in knowledge‐intensive firms

Knowledge‐intensive firms need to share knowledge held by employees if they are to gain the most from their intellectual capital and compete effectively in the marketplace. Sharing and integrating knowledge within the organisation depends partly on building social capital. However, there are obstacles to this integration because knowledge is often distributed throughout the organisation. This article draws on a detailed study of a single case to examine the ways in which HR policies and processes contribute to overcoming these barriers to sharing knowledge. We highlight the role of HR policies and processes as facilitators of the social capital that interconnects knowledge by focusing on the needs of knowledge workers.     

Overcoming the ethnocentric firm? – foreign fresh university graduate employment in Japan as a new international human resource development method

Abstract

This article analyses a new and, by international comparison, distinct recruitment trend – the systematic hiring of foreign fresh university graduates (FFGs) into Japanese multinational enterprises’ (MNEs) operations in Japan. Our explorative research, which is based on interviews with HR managers and FFGs, offers three major findings related to international HR development methods. Firstly, the inpatriate literature has identified the roles of foreign (subsidiary) staff as knowledge conduits and boundary-spanners between headquarters and subsidiaries. While such objectives do not drive Japan’s FFG hiring trend, we find similar challenges in terms of the absorptive capacities of headquarters. Secondly, following a Varieties-of-Capitalism perspective, we argue that FFG hiring is an institutional answer to the particularities of Japan’s employment system. Aiming at internationalizing headquarters from within, it contributes to resolving the internationalization conundrum of Japanese MNEs, but rather than overcoming the existing ethnocentric HR model it accommodates this orientation. Thirdly, we advance the general HR literature by proposing a new framework that addresses the viability of international personnel development methods in dependence of the workforce diversity and distinctiveness of employment practices in headquarters. We locate FFG hiring, inpatriation and self-initiated assignments within this framework.