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The present study develops a multi-theoretic framework of the mechanisms of value creation in interorganizational relationships and of the key factors influencing those mechanisms. The integrative use of several theories in building the model is justified by numerous studies suggesting that a multi-theoretic approach is required to understand the complexity of interorganizational relationships (Gulati, 1998; Osborn & Hagedoorn, 1997; Park et al., 2002). We believe that the relationships between start-up companies and their corporate investors, with each party holding a diversity of strategic and financial objectives, are not less complex than other potential interorganizational relationships. They may therefore also require ideas from several theories to be properly understood. In this study, we build the models applying primarily the resource-based and the knowledge-based views, as well as social capital theory. Ideas from other theoretical approaches are used to complement these theories.

This study uses a new, fine-grained, firm-based measure of target resources to investigate the relationship between target resource type and acquirer stock market performance. Our findings suggest that the market punishes acquirers of knowledge-based resources more than those that buy property-based resources due to the perceived uncertainty regarding the value of targets’ knowledge resources. In support of the underlying uncertainty argument, we find that managers announcing knowledge-based mergers provide more information in their press releases than those announcing property-based transactions. While prior studies have suggested that resource relatedness may moderate the resource type and acquisition performance link, our findings do not support either a direct or moderating relationship.

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.

A firm's behavior is constrained by its access to resources owned or controlled by different constituencies in its environment. Mergers and acquisitions are one way to proactively manage these resource dependencies. Research on resource dependence reducing merger and acquisition patterns provides an important cornerstone of resource dependency theory and a basis of our present knowledge of the aggregate industry-level merger and acquisition patterns. However, due to the predominant focus on inter-industry merger and acquisition patterns in earlier research, much less is known as to whether the same logic could also be applied to explain intra-industry merger and acquisition patterns. In this chapter, we extend the resource dependence results to an intra-industry context. In particular, we show that mergers and acquisitions among pharmaceutical firms tend to take place among firms with technological and competitive interdependencies. To distinguish our finding from the competing resource scale and scope explanations, we show that the likelihood of a resource dependence reducing acquisition is moderated by the crowding of firms’ technological positions and prior alliance ties. Consistent with the resource dependence explanation, both weaken the effect of overlapping technological positions even though both alliance ties and crowding otherwise are positively related to merger and acquisition patterns in line with the social structural explanations.

Young/small firms are often seen as acquisition targets, but rarely viewed as potential acquirers. However, in this study we found that one-third of the young ventures in our sample pursued aggressive growth though acquisition of their competitors. Furthermore, contrary to conventional wisdom, we found striking evidence that young firms pursuing growth via acquisition significantly outperformed their peers who pursued growth via internal development. Thus, growth via acquisition clearly represents a viable strategic option for young, small firms.

Beginning with the premise that complementary resources represent the most valuable resource combinations, theory is developed to explain the impact of complementary resources on firm boundary decisions. Uncertainty surrounding resource combinations or control of a complementary resource influences firm boundaries by impacting access to needed resources. An implication is that acquisition decisions and performance are influenced by prior investment. Resulting insights have competitive advantage implications of interest to both management research and practice.

Although primarily treated as two distinct research streams, strategic alliances and mergers and acquisitions together occupy much of the strategic management discourse. Alliances, in many cases, end in acquisitions as firms use alliances as intermediate strategic options to eventually acquire a partner. As the discipline of strategy matures and the frequency and the volume of inter-firm cooperation continue to rise, it is imperative to integrate these two research streams for a holistic understanding of the theory of the firm. The purpose of this conceptual piece is threefold. First, we review the extant studies that combine these two governance modes: alliance and acquisitions. Second, drawing on the dominant strategic management theories, we highlight how prior inter-firm alliances inform future acquisitions in terms of (a) pre-combination decisions, (b) post-deal integration processes, (c) alternatives and strategies, and (d) performance outcomes. Finally, in view of the emerging trends and evocative gaps, we offer a conceptual road map to encourage future theoretical development and empirical research.

While the social sciences do not make “scientific discoveries” of the kind made in the natural sciences, the empirical patterns revealed in Tables 1a and b struck us as coming close to that. Consider especially the “organic as percent of total” columns. They show an astonishingly clear and strong relationship between the size class of firms and the proportion of total growth that is organic. The effect is actually so strong that large firms defined as “high growth” in terms of total employment growth actually shrink quite markedly in organic terms (cf. Davidsson, 2005, p. 153; Davidsson & Delmar, 2006).

The study here responds to the view that the crucial problem in strategic management (research) is firm heterogeneity – why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently. The present study applies complexity theory tenets and a “neo-configurational perspective” of Misangyi et al. (2016) in proposing complex antecedent conditions affecting complex outcome conditions. Rather than examining variable directional relationships using null hypotheses statistical tests, the study examines case-based conditions using somewhat precise outcome tests (SPOT). The complex outcome conditions include firms with high financial performances in declining markets and firms with low financial performances in growing markets – the study focuses on seemingly paradoxical outcomes. The study here examines firm strategies and outcomes for separate samples of cross-sectional data of manufacturing firms with headquarters in one of two nations: Finland (n = 820) and Hungary (n = 300). The study includes examining the predictive validities of the models. The study contributes conceptual advances of complex firm orientation configurations and complex firm performance capabilities configurations as mediating conditions between firmographics, firm resources, and the two final complex outcome conditions (high performance in declining markets and low performance in growing markets). The study contributes by showing how fuzzy-logic computing with words (Zadeh, 1966) advances strategic management research toward achieving requisite variety to overcome the theory-analytic mismatch pervasive currently in the discipline (Fiss, 2007, 2011) – thus, this study is a useful step toward solving the crucial problem of how to explain firm heterogeneity.

Firms in mature or declining industries are faced with the challenge of redeploying their excess resources to new applications, and M&A strategies can be an important component of this effort. I consider two ways in which excess resources are applied to more attractive business opportunities through M&A, and I analyze these strategies through the lenses of industrial organization economics, resource-based view, evolutionary perspective and agency theory. In the redeployment strategy, firms seek attractive opportunities in related industries, using acquisitions to fill any resource deficiencies. In the consolidation strategy, firms combine with their competitors within the same industry. The resulting larger pool of resources provides greater opportunities for disposing off their under-utilized resources through the market, while enhancing their profitability. Either way, excess resources can find new applications, within the firm in the former strategy and through the market in the latter. I also discuss some implications for future research and practice.