Understanding knowledge transfer in M&As: An integration of resource orchestration and social capital theories and evidence from UK acquiring firms

Whileknowledge transfer is one of the key components in determining Mergers and Acquisitions (M&A) success, the current M&A literature has produced inconsistent findings regarding its antecedents and consequences. To address this research gap, this study explores the roles of functional integration and shared goals in facilitating knowledge transfer, which will in turn determine M&A success. To provide a more nuanced understanding of knowledge transfer, this study examines bilateral knowledge flows (e.g., knowledge transfer to a target firm from the UK acquiring firm and knowledge transfer from a target firm to the UK acquiring firm). Our research framework is built upon two different theoretical perspectives, namely resource orchestration and social capital theories. Our propositions were tested empirically across a sample of 131 UK cross-border M&A firms. Our results reveal that the affirmative roles of functional integration and shared goals in increasing knowledge transfer both to and from a target firm are confirmed and that knowledge transfer to the target firm is deemed decisive for M&A success. Based on the findings, we discuss theoretical and practical implications, followed by limitations and future study consideration.     

The Role of Emotions in Cross-Border Mergers & Acquisitions: A Systematic Review of the Inter-Disciplinary Literature and Future Research Agenda

Cross-border mergers and acquisitions (M&As) are highly emotional events for the employees of involved organizations. The strength and directionality of emotional reactions can result in positive or negative employee outcomes contributing to success or failure of cross-border M&As. Existing studies on emotions and cross-border M&As have identified various underlying mechanisms and factors that influence employee emotions in cross-border M&A activities, leading to a fragmentation of current research on this topic. In this article, we systematically review the interdisciplinary literature on the role played by emotions in cross-border M&As by analyzing a sample of 78 articles published between 2000 and 2021. We contribute to the current literature by (1) providing a holistic and deeper understanding of the role played by emotions in cross-border M&As; (2) mapping the current state of the interdisciplinary literature on emotions and cross-border M&As; and (3) developing a multi-level framework, and identifying key theories and emerging themes to be examined in future studies.     

Customer knowledge sharing in cross-border mergers and acquisitions: The role of customer motivation and promise management

Knowledge is a vital source of competitive advantage and renewal for contemporary organizations. However, to date, few studies have scrutinized how mergers and acquisitions (M&As)—processes dependent on knowledge sharing—offer a valuable inter-organizational context through which to understand the attainment of customer knowledge sharing following M&As. Applying an integrated theoretical perspective from customer relationship management and M&A performance research, we study a Chinese–Finnish acquisition and customer firms of the acquired party across four advanced Western countries. We find that customer knowledge sharing is an active relationship management process that relies on the factors of customer dedication-based motivation vs. customer concerns about M&As to maintain relationships after acquisitions. In addition, and more importantly, we find that the promise management mechanisms—making promises, enabling promises, and keeping promises—of the M&A parties reinforce the motivational factors to maintain customer knowledge sharing in cross-border M&As. We propose a conceptual framework of customer knowledge sharing in cross-border M&As.     

Mergers and acquisitions research — A bibliometric analysis

Mergers and acquisitions (M&A) remain a popular vehicle for organizational development to ensure future competitiveness. However, despite the extensive body of research in recent decades, significant gaps can be observed between the understanding of the phenomenon M&A in the literature and the importance of M&A activities in practice. Heterogeneous perspectives from different schools of thought, contradictory findings and controversies, and changing economic environments make M&A research a complex endeavor and highlight the need for integrative approaches and holistic perspectives. This paper takes a holistic view of M&A research to map interrelationships among key documents, authors, institutions, and countries; trace the evolution of M&A research over time; and suggest avenues for future research to expand the boundaries of M&A scholarship. For this purpose, a sample of 580 articles from 9 leading management science journals was examined bibliometrically, including 42,630 citations and 18,734 unique references for the years 1963–2019.     

Cross-border M&As: The impact of cultural friction and CEO change on the performance of acquired companies

This study analyzes the impact of cross-border mergers and acquisitions (M&As) on the performance of target firms. Based on institutional theory, we hypothesize that performance deteriorates because of a lack of legitimacy, particularly when there is friction between the two national cultures and a higher risk of clashes between organizational cultures. We test our assumptions using an original dataset to compare the performance of Italian firms involved in inward cross-border M&As with that of continuing local firms that have a similar ex-ante likelihood of being merged or acquired. We apply coarsened exact matching (CEM) to establish the control group and a difference-in-differences (DID) approach to account for the possibility that target companies produce superior results simply because foreign investors “cherry-pick” the best-performing firms. Contrary to predictions, we find that foreign ownership does not deteriorate growth but enhances the profitability of target firms compared to purely domestic companies. In addition, we illustrate that the latter result remains applicable when cultural frictions between national cultures are high and when the CEO of the target company is replaced or joined by a new CEO after the deal.     

Looking into the ‘black box’ – unlocking the effect of integration on acquisition performance

Extending research on the performance of Mergers and Acquisitions (M&As), this paper seeks to explain how the post-acquisition integration phase affects acquisition performance. Despite extensive research efforts, there remains a scant understanding of how acquisition implementation, particularly in the post-acquisition integration phase, impacts the performance of M&As. Based on an extensive study of eight acquisitions, in this paper, a grounded model detailing the mechanisms by which the post-acquisition integration phase affects acquisition performance is developed. The model posits that integration-related factors do not bear directly upon acquisition performance. Instead, their effect is mediated by functional organizations in both firms. When focusing into these functional mediating dynamics, we observe that integration-related processual, behavioral and cultural factors affect the identified functional mediators in different ways. Going forward, we echo calls for integrated perspectives to the study of M&A and M&A performance in particular.     

Genetic distance,international experience and the performance of cross-border R&D for EMNEs

Cross-border R&D can contribute to the enhancement of independent innovation capabilities of emerging markets multinational enterprises (EMNEs) by benefiting from knowledge management. However, scant research exists examining the location impact of cross-border R&D for EMNEs on performance implications. This paper fills this important theoretical gap by building upon the literature of genetic distance in connection with knowledge management. We use a panel data of Chinese high-tech listed companies to empirically examine the impact of genetic distance on the performance of cross-border R&D and the role played by international experience. Our results reveal a positive relationship between genetic distance and the performance of cross-border R&D. Importantly, we highlight the motivation for cross-border R&D of EMNEs to acquire technical knowledge magnifies the positive effects of genetic distance and performance. Furthermore, our analysis indicates that international experience significantly enhanced the positive effect of genetic distance on cross-border R&D performance. We conclude this paper by discussing theoretical contributions to genetic distance, international management and knowledge management, as well as practical implications for cross-border R&D of EMNEs.     

全球视角下跨境医疗服务研究述评与展望

本文从跨境医疗研究现状出发,对跨境医疗新趋势进行分析。研究发现关于跨境医疗的研究成果较多基于传统的医疗管理和公共卫生理论与模式。互联网时代跨境医疗的特征和医疗服务模式发生了变革,在这一背景下的相关研究较少。本文系统分析了跨境医疗整体概况及测度研究、驱动机制与服务模式研究成果,有针对性地提炼跨境医疗研究的理论框架,探讨跨境医疗带来的全球医疗资源均等化配置问题,提出新趋势下跨境医疗研究的关键科学问题与相关研究建议。研究成果对于推动国内外学者开展跨境医疗前沿领域研究,贡献全球健康事业有着重要的理论价值和实践意义。     

Experiential learning,M&A performance,and post-acquisition integration strategy: A meta-analysis

While research on mergers and acquisitions (M&A) capabilities is accelerating, our understanding of their antecedents and performance implications still remains rather fragmented. Previous research has outlined the importance of learning for building M&A capabilities, but no work has attempted to summarize previous empirical findings regarding different learning mechanisms and their impacts on M&A performance. Mainly drawing upon organizational learning theory and the dynamic capabilities perspective, this study consolidates research on the relationship between different learning mechanisms, post-acquisition integration strategies, and M&A performance. Using meta-analytical techniques, our study shows that the capability-building mechanism relying on deliberate investments in learning tends to be more effective than the capability mechanism based on mere experience accumulation. In addition, our findings indicate that a higher degree of integration is associated with enhanced M&A performance among firms with more developed experiential learning, highlighting the need to explore mediating effects of integration strategy choices on the experiential learning-performance relationship.     

The micro-foundations of industrial diversification through foreign acquisitions: The multifaceted role of CEO experience

This paper examines the micro-foundations of cross-border industrial diversification strategies. We study the impact of observable CEO experience attributes on the propensity to acquire foreign target firms in unrelated (versus related) industries. Our findings, based on a sample of UK-based firms that engaged in cross-border acquisitions between 2010 and 2016, support an inverted U-shaped relationship between life experience of the CEO and the likelihood of engaging in unrelated foreign acquisitions. Further, we find that CEOs' broad-based work experience, across countries or industries, is associated with a higher propensity to engage in unrelated foreign acquisitions. Finally, CEOs’ education experience in MBA-type qualifications is associated with a preference for related foreign acquisitions. We discuss the theoretical implications of these findings and outline directions for future research in the context of micro-foundations in international business, strategic leadership, and upper echelons theory.     

Alternative forms of charismatic leadership in the integration of mergers and acquisitions

It is becoming increasingly clear that post-merger and acquisition (M&A) performance, especially in terms of achieving the integration of merging firms, is strongly affected by organizational factors, such as leadership. This paper presents a theoretical model showing how alternative forms of charismatic leadership can be relevant to the implementation of M&As. A unique aspect of our conceptualization is that we recognize the distinction between charismatic leaders with more of a personalized versus socialized power motive, the behaviors emanating from each respective type, and likelihood of resulting effects on the post-combination organization of an M&A. We also propose that personalized charisma will result in an absorption strategy and accompanying stress, resistance to change, and turnover that vary in degree between acquiring and acquired firms. Conversely, socialized charisma will result in collaborative vision-formation and decision-making processes that will ultimately achieve transformation in both of the combining firms. We further argue that absorption strategies can result in effective integration of the target firm into the acquiring firm when the pre-merger condition of the former is unfavorable.     

来源国劣势与合法化战略——新兴经济企业跨国并购的案例研究

新兴经济体企业在跨国并购中如何根据不同类型来源国劣势来做出合法化战略选择?通过对吉利和万向六次跨国并购的多案例分析,本文打破现有文献关于"来自相同国家的企业面临相似来源国劣势"这一"同质化假定",把来源国劣势构念化为制度维和产品维。通过归纳式案例研究,本文发现,对于产品维的来源国劣势,新兴经济体企业倾向于通过组织制度设计、资源协同和声誉重构等合法性修复战略进行应对。对于制度维的来源国劣势,新兴经济体企业倾向于采用制度遵从、组织制度设计、资源协同等合法性获取战略来应对。当面临产品维和制度维双重劣势时,新兴经济体企业综合运用制度遵从、组织制度设计、资源协同、声誉重构等合法性获取和合法性修复战略,重点强调沟通协调这一合法性维持战略来应对。这些发现贡献于新兴经济体企业在跨国并购,乃至于更广意义国际化的文献,并对中国企业跨国并购过程有一定的启示意义。     

Operations Strategy Research in the POMS Journal

In this paper, we examine the operations strategy literature in the POMS journal to determine what has been learned and to suggest new directions for further study in this important area of research. Our review of this literature resulted in the selection of thirty‐one relevant articles, many of which draw upon multiple theoretical perspectives. We identify eight such theoretical perspectives, and go on to classify these perspectives in terms of the scope of inquiry employed in the research (focused versus aggregated) and the researcher's assumptions about choice processes (behavioral versus rational). In doing so, we show that this body of work is dominated by papers that draw upon theoretical perspectives enabling a more holistic scope of inquiry, with a bias towards a view of strategy as a highly rational process. Building on our systematic review and integration of the literature, we suggest multiple areas for future research.     

The role of emotions during mergers and acquisitions: A review of the past and a glimpse into the future

Research on emotions during different phases of the merger and acquisition (M&A) process (i.e., pre-M&A, during M&A and post-M&A) has increased exponentially over the past three decades. However, few attempts have been made to integrate the findings. By systematically reviewing research on emotions during M&As published over the past 30 years, this paper aims to contribute to filling this gap. We organized our findings using a process framework, addressing emotional triggers, the nature of emotions and their dynamics, effects and management. Our review reveals several oversights in research on emotions during M&As, such as the emotional dynamics between the different M&A phases and the role of positive emotions. To address these oversights, future research is encouraged to (a) study emotions following a process-oriented perspective on M&As and include the (interrelationships between) different M&A phases, (b) address the emergence of emotional heterogeneity and homogeneity among organizational members during these phases, (c) investigate the widespread effects of positive emotions and take into account various levels of emotion and (d) explore how emotions can be successfully managed. The paper concludes with a discussion of how these research directions can advance research on emotions during the M&A process.     

The dynamic impacts of M&A on employment in Japan

This paper provides empirical evidence on the dynamic effects of merger and acquisition (M&A) on employment in Japan. The main contributions to the gaps in existing literature are: targeting employment effects of M&A, examining them by the deal type (merger and acquisition) and by the sector (manufacturing and non-manufacturing), tracing the effects in the long term, using large dataset with 9,880 sample firms and 2,530 M&A cases for the period from 1995 to 2008, and focusing on the case of Japan. Our main findings are: the “acquisition” with the key role of “extension and growth” proved to have positive effects in the dynamic terms on target firms’ employment, mainly in manufacturing sector with high labor productivity. On the other hand, the “merger” with key function of “consolidation” turned out to have negative impacts dynamically on post-merger firms’ employment, mainly in non-manufacturing sector with low labor productivity. The strategic implication might to be that the different employment responses to M&A events between manufacturing and non-manufacturing reflect the difference in labor productivity between them, i.e. the dual structure of Japanese economy.     

How does decision-making involvement affect perceptions of speed during post-merger integration?

This article offers an empirical demonstration of how different employees perceive the speed of change during the post-merger integration (PMI) process. As such, it adds to the growing body of literature on the speed of integration in the aftermath of a merger or acquisition (M&A). It broadens our understanding of the M&A integration process as it goes beyond binary recommendations of ‘fast’ or ‘slow’ integration by highlighting the relationship between an employee's involvement in the decision-making process and their perception of the speed of change.We conducted a multi-level longitudinal study over a two-and-a-half-year period. Our qualitative research on two not-for-profit, higher education institutions, employed multiple sources of process data. Building from this, our article thus provides not only novel theoretical insights into the PMI process, but equally offers valuable managerial advice on how staff morale, turnover and change resistance might be more efficiently managed during PMI.     

3 Merger and Acquisition Transactions and Executive Compensation: A Review of the Empirical Evidence

Abstract

The purpose of this paper is to review the existing empirical evidence and provide an integrative framework for the growing body of literature that is situated at the intersection of two highly debated topics: merger and acquisition (M&A) activities and executive compensation. The proposed framework structures the literature along two dimensions, such as M&A phases and firm's role in a M&A deal, allowing us to identify three main streams of research and five different conceptualizations of causal relationships between M&A transactions and executive compensation. Making a comprehensive review of empirical studies conducted to date we aim at shedding more light on the current and emerging knowledge in this field of investigation, discussing the inconsistencies encountered within each stream of research and suggesting promising directions for further exploration.     

Foreign market knowledge,entry mode choice and SME international performance in an emerging market

This paper examines the mediating role of equity entry mode choice in the relationship between foreign market knowledge (FMK) and international performance of small and medium-sized enterprises (SMEs) originating from emerging markets. In addition, this paper investigates when FMK enhances firms' equity mode choice by considering financial slack as a moderating variable. Using data obtained from 205 SMEs engaged in cross-border activities in Ghana, the results reveal that FMK and international performance relationship is mediated by foreign market equity entry mode choice. The results also suggest that FMK positively relates to SMEs' preference for equity mode for foreign market entry and this relationship is amplified when slack resource is greater. These findings offer theoretical as well as practical implications for SME managers in developing and emerging markets in terms of entry mode decisions.     

Internationalization and Indigenous Technological Efforts of Emerging Economy Firms: The Effect of Multiple Knowledge Sources

Getting engaged in competitive international markets motivates exporting firms to enhance their technological competitiveness and invest in research and development (R&D). While in-house R&D investment is important for getting advanced technologies, the technologies needed by exporters located in emerging economies (EEs) typically readily exist overseas. Drawing on organizational learning literature, we argue that the R&D intensity stimulated by exporting may be reduced when 1) EE exporters are better prepared and motivated to absorb foreign knowledge, 2) foreign sources of knowledge are more available, and/or 3) local technology supply is poor. An analysis on 5592 automobile parts and component manufacturers in China during 2005–2007 supports these arguments. To compete in markets abroad, Chinese firms' R&D intensity increases with export intensity when their export intensity is low. As the export intensity exceeds a certain threshold, their R&D intensity starts to decrease as intensive exporters are better prepared and motivated to acquire knowledge from foreign sources. When substitutive foreign knowledge sources such as foreign parents and FDI spillovers in the local industry is available, firms' R&D intensity stimulated by exporting can be further reduced. Better local technology supply can increase the R&D intensity stimulated by exporting.     

Determinants of foreign ownership in international R&D joint ventures: Transaction costs and national culture

In this study, we integrate the transaction costs economics and national culture perspectives by examining the determinants of foreign equity ownership in international R&D joint ventures. Specifically, we focus on the impact of different uncertainty dimensions–environmental and behavioral–on the share of equity that multinational enterprises take in their overseas R&D joint ventures. We further investigate the roles that two national culture components–power distance and uncertainty avoidance–play in this process. Using 543 international R&D joint venture announcements by foreign enterprises in China, India, Japan, and the United States during the period of 1985 to 2004, our results provide support for both transaction costs economics and the national culture perspectives.