Diversity management and postmergers and acquisitions performance

Abstract

Purpose

The purpose of this paper is to examine the role of diversity management on postmergers and acquisitions (M&A) performance. Building on prior literature, it investigates whether a firm ability to harmonize people with different backgrounds and to deal with uncertainty and dynamics in the diverse work environment will affect post-M&A performance either directly or through its interactions with acquirer-target characteristics.

Design/methodology/approach

This paper used panel regression analysis on a sample of 218 M&As conducted by listed large US firms across industries.

Findings

Results show that the diversity management of an acquiring firm positively influences post-M&A performance. This paper also finds support for diversity management having a more significant moderating role where merged firms have a bigger size difference and higher industry relatedness.

Originality/value

The primary contribution of this study is in testing and finding evidence to support the claim that diversity management is a useful factor in predicting post-M&A performance. The success of post-M&A integration should be considered alongside the extent of firm capabilities to manage internal diversity.

Citation

Jeong, N. (2021), "Diversity management and postmergers and acquisitions performance", Management Decision, Vol. 59 No. 10, pp. 2369-2384. https://doi.org/10.1108/MD-05-2020-0635