Sub-theme 35: Designing M&As and Organizations through M&As
Call for Papers
Mergers and acquisitions (M&As) provide unique opportunities for companies to grow, to gain new capabilities, and to access to new markets (Haspeslagh & Jemison, 1991; Hitt et al., 2001; Lynch, 2005). The five merger and acquisition waves since the end of the 19th century provide witness to the increasing prevalence of M&As as a means of corporate growth and renewal (Kolev et al., 2012). Despite this seeming appeal, the performance effects of M&As on the buying firm remain contested (King et al., 2004; Thanos & Papadakis, 2012). Faced with this seeming paradox, this sub-theme aims to shed light on some of the appealing, yet hitherto less explored dimensions of M&A activity.
- We argue for the need to dwell further on the management of M&As. Extant research and practical experience repeatedly informs us that it is the post-deal management that provides the greatest hurdle in making M&As work and reach the sought performance goals (Larsson & Finkelstein, 1999). Yet, we argue that this central part of M&As – namely, post-acquisition management – has been recently left adrift, and would warrant further exploration. Previous research suggests that financial performance depends on the redeployment of complementary resources between the acquiring and acquired companies (cf. Björkman et al., 2007; Capron, 1999). There is a need to understand more about efficient business integration during the post-M&A phase. Moreover, research on post-M&A integration has demonstrated how M&As impact employees in both participating organizations (Napier, 1989; Cartwright & Cooper, 1990). Previous research has also amply demonstrated how M&As can be stressful and highly emotional organizational events (Véry et al., 1996; Fairfield et al., 2002). Human resource related problems have often been stated as the major reason why organizations are not capable to create value and realize synergies from M&A (Schuler et al., 2004). This being the case, how can the post-deal phase be managed for these people related issues to be better addressed? What have we learnt from the best performers?
- From the buying firm's perspective, the successful implementation of each acquisition is critical if the firm's sought long-term strategic goals are to be achieved. The successful implementation of a growth and internationalization strategy may require several rounds of acquisitions and major organizational upheavals. In the context of this longer-term strategy, securing employee commitment to a focal acquisition, and the ensuing restructuring becomes critical. We ask, how could the management of M&As be better informed of these contingencies? What are the best practices in today’s organizations?
- We call for the need to look at the corporate-wide consequences of M&A activity. With every acquisition, organizations are formed and transformed. Whether small or large, acquisitions affect organizations in a myriad of ways. Mergers, on the other hand, create entirely new organizations, which have to re-define their structures, identities and cultures. Previous research has argued that the way an individual acquisition’s integration is managed impacts its outcome (Haspeslagh & Jemison, 1991). In addition, it has been argued that the more a company makes acquisitions, the more they gain in experience (Zollo & Singh, 2004; Bakerma & Schjiven, 2008). At best, existing acquisition experience translates into organizational learning, which in turn leads to the refinement of M&A processes and more successful M&A projects – an ‘acquisition capability’ is created (Laamanen & Keil, 2008). Whilst research efforts have gradually moved from the perspective of a focal acquisition to that of a firm undertaking a series of acquisitions (Laamanen & Keil, 2008), little discussion exists as regards the organization-wide consequences of M&A activity. We ask: how do M&As affect the current and future design of organizations? How can organizations prepare for such challenging and complex undertakings?
This sub-theme examines the design of M&As as well as the role of M&As in designing and shaping organizations. In particular, we are interested in:
- Designing M&As. Previous research has argued that the way M&A processes are managed impacts the observed outcomes (e.g. Jemison & Sitkin, 1986; Haspeslagh & Jemison, 1991). We ask how to design M&A processes in a way to secure successful outcomes. On the one hand, the management of M&As ties in a significant amount of resources, be they internal or external experts. What are the various ways to organize the M&A function in organizations? On the other hand, what different M&A practices and M&A process designs exist? What is the link between pre- and post-M&A phase? How can the design of M&As prevent from the often experienced people related casualties? How does an organization's accumulated acquisition experience and acquisition capability help to redesign M&A processes? What is their collective impact on the performance of a focal deal?
- Designing organizations through M&As. M&A research often focuses on single, isolated M&As. All the while, each deal occurs in an organizational context. Often, an acquisition may be part of a larger series of strategic deals aimed at furthering a specific goal, such as growth or internationalization. How can the successful integration of a single deal enable the organization to reach this larger goal? Depending on their size, M&As can also have a significant impact on the buying firm, e.g. through the restructuring and organizational change thus triggered. Whilst through a merger, an entirely new organization is formed overnight; a series of successive acquisitions may result in organizational changes over a longer time frame. We ask: what are the consequences of M&A activity on the organization's long-term design contingencies?
Bakerma, H.G. & M. Schjiven (2008): "Toward unlocking the
full potential of acquisitions: the role of organizational restructuring." Academy of Management Journal, 51 (4),
Björkman, I., G. Stahl & E. Vaara (2007): "Cultural differences and capability transfer in cross-border acquisitions: the mediating roles of capability complementarity, absorptive capacity, and social integration." Journal of International Business Studies, 38, 658–672
Capron, L. (1999): "The long-term performance of horizontal acquisitions." Strategic Management Journal, 20 (11), 987–1018
Cartwright, S. & C.L. Cooper (1990): "The impact of mergers and acquisitions on people at work: Existing research and issues." British Journal of Management, 1, 65–76
Fairfield-Sonn, J.W., J.R. Ogilvie & G.A. DelVecchio (2002): "Mergers, acquisitions and long-term employee attitudes." Journal of Business & Economic Studies, 8 (2), 1–16
Haspeslagh, P.C. & D.B. Jemison (1991): Managing Acquisitions – Creating Value through Corporate Renewal. New York: The Free Press
Hitt, M.A., J.S. Harisson & D.A. Ireland (2001): Mergers and Acquisitions – A Guide to Creating Value for Stakeholders. Oxford University Press: New York
Jemison, D.B. S.B. Sitkin (1986): "Corporate Acquisitions: A process perspective." Academy of Management Review, 11 (1), 145–163
King, D.R., D.R. Dalton, C.M. Daily & J.G. Covin (2004): "Meta-analyses of post-acquisition performance: indications of unidentified moderators." Strategic Management Journal, 25 (2), 187–200
Kolev, K., J. Haleblian & G. McNamara (2012, in print): "A Review of the Merger and Acquisition Wave Literature: History, Antecedents, Consequences and Future Directions." In: D. Faulkner, S. Teerikangas & R. Joseph (eds.): Handbook of Mergers and Acquisitions. Oxford: Oxford University Press
Laamanen, T. & T. Keil (2008): "Performance of serial acquirers: toward an acquisition program perspective." Strategic Management Journal, 29 (6), 663–672
Larsson, R. & S. Finkelstein (1999): "Integrating strategic, organisational, and human resource perspectives on mergers and acquisitions: a case survey of synergy realization." Organizational Science, 10 (1), 1–26
Lynch, R. (2005): Corporate Strategy. 4th ed. Harlow: Prentice-Hall
Napier, N.K. (1989): Mergers and acquisitions, human resource issues and outcomes: A review and suggested typology." Journal of Management Studies, 26, 271–289
Schuler, R.S., S.E. Jackson & Y. Luo (2004): Managing Human Resources in Cross-border Alliances. London: Routledge
Thanos, I. & V. Papadakis (2012, in print): "Unbundling acquisition performance: how do they perform and how can this be measured? In: D. Faulkner, S. Teerikangas & R. Joseph (eds.): Handbook of Mergers and Acquisitions. Oxford: Oxford University Press
Véry, P., M. Lubatkin & R. Calori (1996): "A cross-national assessment of acculturative stress in recent European mergers." International Studies of Management and Organization, 26 (1), 59–86
Zollo, M. & D. Meier (2008): "What is M&A performance?" Academy of Management Perspectives, 22 (8), 55–77