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Article
Publication date: 25 September 2018

Zhe Sun

The purpose of this paper is to unpack the black box of post-merger and acquisition (M&A) integration of reverse M&A by Chinese multinational enterprises (MNEs).

Abstract

Purpose

The purpose of this paper is to unpack the black box of post-merger and acquisition (M&A) integration of reverse M&A by Chinese multinational enterprises (MNEs).

Design/methodology/approach

This research adopts multiple cases of Chinese reverse M&A. Data are collected using the approaches of in-depth interviews, storytelling and narratives.

Findings

This research identifies various antecedents underlying Chinese post-M&A integration, such as asymmetries in resources, capabilities, vision and status between Chinese MNEs and acquired firms. The post-M&A integration process of Chinese reverse M&A consists of a top-down effortless integration initiated by Chinese MNEs with both benefits and problems, and a bottom-up reverse integration conducted by acquired firms.

Originality/value

By linking the pre-M&A phase and the post-M&A phase, this research builds a new model of post-M&A integration of Chinese reverse M&A from an indigenous Wu Wei paradigm. The new model counterpoises extant literature, shifting from the task and efficiency-focussed view to the people and harmony-focussed view.

Details

Chinese Management Studies, vol. 12 no. 4
Type: Research Article
ISSN: 1750-614X

Keywords

Content available
Article
Publication date: 27 November 2019

Wenjia Chang-Howe

The purpose of this study is to follw the process perspective approach in post-M&A (mergers and acquisitions) integration studies, with a focus on human resource function…

Abstract

Purpose

The purpose of this study is to follw the process perspective approach in post-M&A (mergers and acquisitions) integration studies, with a focus on human resource function, to make the research literature relevant to HR integration process up to date.

Design/methodology/approach

To the best of the author’s knowledge, limited systematic literature review and study in this interface has previously been published.

Findings

Therefore, this conceptual study filled in the research gap by pointing out a clear framework on HR integration in cross-border post-acquisitions, reviewing both the content and process of HR integration. This paper contributes to future research on the HR integration process perspective in theoretical directions.

Originality/value

It addresses the gap in research and opens the avenues for M&A researchers to consider HR as the strategic partner during M&As and to study HR aspects in an integrated process perspective view. This approach complements socialized reviews and it suggests a process perspective on how to dispersed themes and interrelate topics. It provide a clear process perspective helps to develop a concurrent research agenda, which can guide future work in the field.

Details

Journal of Chinese Human Resource Management, vol. 10 no. 1/2
Type: Research Article
ISSN: 2040-8005

Keywords

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Article
Publication date: 26 April 2013

Xiaojun Du, He Liu, Lingjing Bao and Peng Huang

This paper aims to investigate the relationships between the strategic type of cross‐border mergers and acquisitions (M&As) and enterprise growth, and the moderating role…

Abstract

Purpose

This paper aims to investigate the relationships between the strategic type of cross‐border mergers and acquisitions (M&As) and enterprise growth, and the moderating role of Chinese companies' organizational factors, including organizational structure, organizational experience, cultural distance and relative size.

Design/methodology/approach

The authors, as researchers, have mixed the strategic choice and post‐M&As integration into a comprehensive framework while building the theoretical model of “Strategic Type of Cross‐border M&As‐Organizational Factors‐Enterprise Growth” (ST‐OF‐EG). In this paper, they have empirically examined the model using hierarchical regression by analyzing 76 cross‐borders M&A events of overseas‐listed Chinese companies over the 2000‐2007 period.

Findings

The analysis shows that: related cross‐border M&As are better for enterprise growth than unrelated diversification cross‐border M&As; and among the organizational factors, studied organizational structure and organizational experience show a positive significance in terms of the relationship between the strategic type of cross‐border M&As and enterprise growth. The moderating role of cultural distance and relative size is non‐significant.

Research limitations/implications

In this paper, the moderating effect of cultural distance was found to be insignificant. However, further research is encouraged.

Practical implications

Chinese companies should pay attention to strategic choices before cross‐border M&As. They should expand abroad to markets step by step. They should merge the companies that have the higher relevance on a product, industry or market first. On the basis of specialization, Chinese companies should make themselves stronger and then develop from specialization to proper diversification, which is a robust path to achieve enterprise growth. Besides, Chinese companies should accumulate international experience as soon as possible and organizational structure should match the strategic choice.

Originality/value

This paper would be immensely helpful to Chinese companies to plan their cross‐border M&As strategy in a way that would enhance growth and core‐competence.

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Article
Publication date: 13 February 2009

Dũng Anh Vũ, Yongjiang Shi and Terry Hanby

The paper aims to provide both academics and practitioners a strategic framework for integrating brands in horizontal mergers and acquisitions (M&As) in order to create…

Abstract

Purpose

The paper aims to provide both academics and practitioners a strategic framework for integrating brands in horizontal mergers and acquisitions (M&As) in order to create and deliver value.

Design/methodology/approach

A conceptual framework developed from a review of the existing literature and pilot case studies.

Findings

The paper first discusses the importance of brand integration for value creation in horizontal M&As from a practical perspective. The paper then reviews three related bodies of existing literature that are critical to this research – M&As, product and brand management, integration approach. This review leads to the identification of the research gap in the area of brand integration in M&As. The paper then develops and proposes a strategic framework for integrating brands in horizontal M&As based on the pilot case studies and existing literature.

Originality/value

The paper structures and classifies the fragmented existing literature in the domain of product and brand management into four major views – customer (market) perspectives, supply (manufacturing) concerns, product development (innovation and technology) considerations and value creation. This classification can be a useful approach for future research in reviewing the diversified product and brand management literature. The strategic framework developed here consolidates the four perspectives of product and brand management and the two views of strategic management (positioning and resource‐based) and presents four major strategies and a process for the successful integration of brands in post‐horizontal M&As. The paper also provides an overview of overseas M&A activities on the part of Chinese companies in terms of trend and motives and considers some implications of the brand integration strategic framework for Chinese companies when they acquire international brands. Future research priorities are also discussed and research methods recommended.

Details

Journal of Technology Management in China, vol. 4 no. 1
Type: Research Article
ISSN: 1746-8779

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Book part
Publication date: 21 December 2010

Hui Tan and Qi Ai

The increasing number of cases of developing country multinational enterprises (MNEs) buying assets from developed countries through merger and acquisition (M&A) calls for…

Abstract

The increasing number of cases of developing country multinational enterprises (MNEs) buying assets from developed countries through merger and acquisition (M&A) calls for more systematic evidences on this area. As a typical and representative developing country, China has already drawn the world's attention with several high-profile cross-border M&As in recent years. By examining the recent evidences of Chinese outward M&A, this chapter reviews the main motivations of outward M&A among state-owned enterprises (SOEs) and non-SOEs, and presents an overall picture of China's outward M&A in the last decade. In doing so, this chapter intends to explore the crucial role played by the Chinese government in orchestrating its internationalization activities and the long-term implications on the competitiveness of Chinese firms in the global marketplace.

Details

Advances in Mergers and Acquisitions
Type: Book
ISBN: 978-0-85724-465-9

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Article
Publication date: 11 September 2017

Emanuel Gomes, Kamel Mellahi, Sunil Sahadev and Amy Harvey

Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions…

Abstract

Purpose

Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee’s perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee’s commitment has a significant impact on post-entry performance. The purpose of this paper is to examine the association between perceptions of justice and organisational commitment in cross-border M&As.

Design/methodology/approach

The authors draw on market entry and M&As’ literature and studies on the link between perception of justice and commitment to develop the hypotheses. The authors test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm.

Findings

The results show a strong association between employees’ perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organisational justices and employees’ commitment.

Research limitations/implications

Obtaining data from a single M&A is a potential limitation of this study.

Practical implications

The study underscores the importance of post-market entry. The results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts.

Originality/value

The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.

Details

International Marketing Review, vol. 34 no. 5
Type: Research Article
ISSN: 0265-1335

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Article
Publication date: 1 February 2003

Anthony F. Buono

Most merger and acquisition strategies are still dominated by financial analyses, legal considerations and power plays by dominant groups as individuals jockey for…

Abstract

Most merger and acquisition strategies are still dominated by financial analyses, legal considerations and power plays by dominant groups as individuals jockey for position and influence. Rather than focusing on the inherent dysfunctions that can emerge in the combined organization due to the informal power held by organizational members – low productivity, poor quality, reduced commitment, voluntary turnover, and related hidden costs and untapped potential – far too many companies seem to meander through the post‐combination integration process.

Details

Journal of Organizational Change Management, vol. 16 no. 1
Type: Research Article
ISSN: 0953-4814

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Article
Publication date: 29 April 2021

Nara Jeong

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…

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.

Details

Management Decision, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 0025-1747

Keywords

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Article
Publication date: 9 December 2020

Damian Leschik, Robert Rossberger and Eddie Oczkowski

This study aims to identify and assess the use of mergers and acquisitions (M&A) performance metrics for small- and medium-sized German pharmaceutical and biotechnology…

Abstract

Purpose

This study aims to identify and assess the use of mergers and acquisitions (M&A) performance metrics for small- and medium-sized German pharmaceutical and biotechnology companies.

Design/methodology/approach

In depth qualitative interviews with senior key informant executives involved with recent M&A were conducted. Unlike previous studies, the role of the interviews was to identify and uncover the use of a broad set of success metrics to add to a fuller understanding of post-M&A behaviour, leading to a more accurate evaluation of post-M&A performance.

Findings

Results from interviews suggest that important M&A success metrics include having a successful organisation, integrated cultures, a high employee retention rate, gaining new technology knowledge, overall economic enhancement, increases in patent-protected products, increases in clinical success rates (perished rate assessment) and increases in the share price. In general, expert interviewees stated that they would use a combination of the success metrics and monetary tools to assess post-M&A success.

Originality/value

This study identifies and uncovers a series of different M&A performance success metrics being in prominent use. The use of a combination of metrics is highlighted as being a relatively unique research finding.

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Book part
Publication date: 13 October 2016

William Y. Degbey

The primary purpose of this chapter is to offer a conceptual/theoretical understanding of post-M&A integration rationales and/or actions which pose a challenge to acquired…

Abstract

The primary purpose of this chapter is to offer a conceptual/theoretical understanding of post-M&A integration rationales and/or actions which pose a challenge to acquired firm customers in acquisitions of knowledge-intensive firms, and thus trigger M&A value destruction. The approach takes the form of a literature overview and conceptual development. As a step toward developing a more elaborate understanding of a customer-centered perspective, this conceptual study identifies five key factors that may lead to value leakage/destruction for acquirers’ of knowledge-intensive firms. Specifically, it identifies acquisition motive, specific acquired firm employees other than the engineers and scientists, size of the acquired firm customer-base, M&A customer compatibility, and the acquirer’s own customers’ behavior as integration rationales and/or actions which pose a challenge to acquired firm customers. In addition, the chapter offers a theoretical framework that serves as an analytical tool, and can thus be used as a foundation for future empirical work on analyzing acquirers’ destruction of value in knowledge-intensive acquisitions through the neglect of acquired firm’s customers. This study does not claim to have provided exhaustive list of all factors regarding acquirer’s integration rationales and/or actions that influence acquired firm customers. Nonetheless, for researchers seeking to build a more comprehensive framework relating to the impact of acquirer’s integration rationales and/or actions on acquired firm’s customers, this framework may serve as a solid foundation for achieving that goal. For practitioners, this study points to the importance of knowledge held by acquired firm customers and the need to maintain such customer relationships in order to avert acquirer’s post-M&A value destruction. In addition, acquirers may also recognize that post-M&A integration changes required following M&A should not be restricted to only the firm’s internal activities and resource deployment but should extend to how the firm interacts or relates with other external value creation actors. This chapter contributes by highlighting and stimulating a discussion on the important role of acquired firm customers in acquisitions of knowledge-intensive firms in informing our understanding of the sources of M&A value leakage/destruction.

Details

Mergers and Acquisitions, Entrepreneurship and Innovation
Type: Book
ISBN: 978-1-78635-371-9

Keywords

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