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Merger and acquisition activity generates a substantial amount of discussion within business circles among academics, analysts, and the media. Even though research and experience demonstrates that many mergers and acquisitions fall short of the intended goal of creating shareholder value, mergers and acquisitions still persist in the marketplace. The purpose of this discussion is to suggest that a potential explanation for this dilemma can be found by applying the resource-based rationale of acquisition within an evolutionary framework of business dynamics.

Although mergers and acquisitions have been a fundamental part of business for the last three decades, they have been increasingly used in recent times as a strategic tool for growth, dealing with excess resource capacity, enhancing the base and scale of operations for competitive advantage and the like. One area of increasing concern in M&A research, however, has been in the area of understanding the integration process and how this might lead to enhanced performance and to the “2+2=5” hoped-for effect of M&As.