Search results

This study investigates the extent to which structural equivalence between acquiring and target firms is associated with post-merger and acquisition (M&A) performance—a relationship that is proposed to be moderated by industry-level vertical relatedness between acquiring and target firms.

Applying social network analysis and regression, this study analyzes a buyer–supplier relationship network dataset of 279 M&A deals completed between 2010 and 2017 to test the hypotheses. Structural equivalence is measured as the proportion of common customers and suppliers between an acquiring firm and a target firm.

Supporting a view about the importance of supply chains in explaining M&As outcomes, the results suggest that the structural equivalence in the supplier network is positively associated with post-M&A firm performance. The results also show that the effect of the structural equivalence in the customer network is moderated by vertical relatedness between two merging firms (i.e. structural equivalence contributes to post-M&A performance when vertical industry relatedness is high).

This study contributes to the M&A and supply network literature by investigating the performance implications of structural equivalence in supplier and customer networks, demonstrating the importance of taking a supply chain view when explaining M&As outcomes. Specifically, the authors suggest considering structural equivalence as a new type of relatedness between merging firms (i.e. relatedness in network resources in explaining post-M&A performance). It also indicates how industry-level vertical resource relatedness, which is about relatedness in internal resources between the two firms, could interact with firm-level network resource relatedness, which is about relatedness in external supply chain resources between the two firms, in affecting post-M&A performance.

This study raises the question of whether the nature of the merger and acquisition (M&A) strategy per se, that is reflected throughout the M&A process, may lead to a potential trade-off between the two main objectives of M&As – synergy success and efficiency gains, which may explain the high failure rate of the M&A strategy. The purpose of this paper is to present a mediation model to explore the potential trade-off that may exist between synergy success and efficiency gains. The model examines whether the change in the workforce size during the M&A process mediates the relationship between the types of M&A and M&A success, resulting in a trade-off.

The study uses a sample of 394 public firms.

The study reveals that if the management over-increases the workforce size to realize the synergy potential, then it heightens the risk of the “win synergy-lose efficiency” trade-off, resulting in an increase in revenue growth but a decrease in profitability. The results even show that international M&As lead to an “over” increase in the workforce size to maximize the synergy potential, but at the same time, an increase in the workforce size harms the efficiency gains, resulting in a decrease in profitability. However, vertical and conglomerate M&As may lead neither to synergy success nor to efficiency gains, which reflects a situation of no benefits from the M&A for the acquirer.

The study emphasizes that one of the main challenges in the implementation of the M&A strategy is to strike a balance between the objective of improving efficiency through cutting costs and workforce reduction during the integration stage and the objective of realizing the synergy potential, despite the workforce reduction during the M&A process.

This paper aims to present the vertical integration state-of-the-art and propose an expansion of the operations and supply chain management (OSCM) field by identifying gaps and bottlenecks.

This paper uses a systematic literature review based on a sample of 173 OSCM field articles, collected from Scopus and Web of Science databases.

There are no single factors, such as future costs, structures or skills development, in the decision to vertically integrate operations. It is necessary to combine the vision of production costs with the perspective of governance and transaction costs. In addition, it is essential to consider the competency perspective and its impact on capability building.

Few studies have attempted to understand how vertical integration is used in terms of OSCM research themes and theories. Vertical integration can help companies face challenges and serve as a potential solution for achieving better prices, demand control and quality management.

The significant role of vertical integration mechanisms in supply chains is crucial for managers evaluating a firm's reconfiguration with more vertical operations. Policymakers interested in supporting the smoothness of vertical integration decisions in regulatory agencies play a key role as contingencies.

In times of global challenges, vertical integration is a strategy known to be more effective for firms to obtain a competitive advantage, making them more resilient.

This paper addresses gaps in the vertical integration theme and provides insights for future research development.

This paper examines the relationship between a prime contractor's financial health and its mergers and acquisitions (M&A) spending in the defense industry. It aims to provide models that give the United States Department of Defense (DoD) indications of future M&A activity, informing decision-makers and contributing to ensuring competitive markets that benefit the consumer.

The study uses panel data regression models on 40 companies between 1985 and 2021. The company's financial health is assessed using industry-standard financial ratios (i.e. measures of profitability, efficiency, solvency and liquidity) while controlling for economic factors such as national productivity, defense budgets and firm size.

The results show a significant relationship between efficiency and M&A spending, indicating that companies with lower efficiency tend to spend more on M&As. However, there was no significant relationship between M&A spending and a company's profitability or solvency. These results were consistent with previous research and the study's hypotheses for profitability and solvency. However, the effect of liquidity was the opposite of the expected result, possibly due to the defense industry's different view on liquidity compared to previous research.

The paper provides insights into the relationship between a prime contractor's financial health and its M&A spending, a topic with limited research. The findings can inform policymakers and regulators on the industrial base's future M&A activity, ensuring competitive markets that benefit the consumer.

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.

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.

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.

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

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.

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.

The purpose of this paper is to address the topic of business network dynamics and identify different relational paths, as forms of change in business relationships and related types of network change. The paper contributes to the literature on business network dynamics by providing an understanding of relational paths in the context of firms’ internationalization and shading light on different forms of change in business relationships and types of network change. The paper also contributes to the understanding of liabilities in internationalization that has to do with business networks, namely the liability of outsidership.

This paper is based on qualitative research following the multiple case study research approach. The authors propose three cases of internationalizing firms in the fashion industry that follows relational paths corresponding to different forms of change in business relationships that imply different types of network change.

Changes to a firm’s business network may be addressed through relational paths, namely creation of new business relationships (activation), maintenance of existing relationships (integration) and ending of existing relationships (substitution). These relational paths can be considered forms of incremental (integration) and radical (activation and substitution) change in business relationships and lead to different types of network change for business network dynamics that coexist and influence each other within the same firm.

This paper contributes to a better understanding of business network dynamics by showing how firms change their business relationships following different relational paths as the best way to respond to the challenges and new opportunities offered especially by international markets. The present paper has relevant managerial implications since coping with change in business relationships is perhaps one of the most critical and difficult tasks for management, even more critical if compared to the increasing complexity of doing business internationally and the liabilities that firms face in their internationalization process, especially the liability of outsidership.

The primary aim of this study is to resolve a longstanding debate concerning the impact of takeover premiums on post-acquisition performance. Specifically, we aim to examine how acquirers' marketing capabilities and payment methods moderate the relationship between takeover premiums and post-acquisition performance.

This study employs linear regression to examine the relationship between acquirers' marketing capabilities, payment methods, takeover premiums and post-acquisition performance in the Chinese manufacturing industry. Data for the analysis were collected from both mergers and acquisition (M&A) announcements and the China Stock Market & Accounting Research Database (CSMAR), covering 1,169 acquisitions from 2012 to 2021.

The results indicate that acquirers' marketing capabilities moderate the impact of takeover premiums on post-acquisition performance. When acquirers possess strong marketing capabilities, takeover premiums increase post-acquisition performance. Conversely, when acquirers lack strong marketing capabilities, takeover premiums are not significantly related to post-acquisition performance. Additionally, it is noteworthy that takeover premiums show a positive correlation with post-acquisition performance, irrespective of the payment methods employed by acquirers for target firms.

Given that takeover premiums are essential for acquiring resources from target firms, it is crucial to maximize the value of these acquired resources. Our findings suggest that acquirers with weaker marketing capabilities before the deal should consider a more conservative approach to pricing target firms.

In cross-border mergers and acquisitions (M&As), acquirers often fail to achieve the expectations they held when they made the M&A deals. This paper aims to propose that the risks of cross-border M&As can be mitigated by building and cultivating organizational resilience as a prime means of risk management.

The research examines risks associated with cross-border M&A and how such risks can be mitigated by developing resilience. It presents dual cases of acquisitions of the biggest branded mobile phone manufacturer in Taiwan.

The authors find that the acquirer faces multiple risks in cross-border M&A transactions, including financial, strategic and organizational, and process risks that arise from misalignment between the goal of the M&As and the post-acquisition performance of the target firms.

The research provides theoretical insights on organizational resilience and how it can mitigate the specific risks involved in cross-border M&As, thereby developing coherent organizational resilience processes.

An increasingly dominant theme of recent M&A research has been the issue of cultural compatibility and the notion of “culture fit” and its contribution to post-combination performance and integration (Cartwright, 2005). Hence, various methodologies, both qualitative and quantitative, have been applied to the M&A context to analyze the cultures of combining employee groups and the extent to which they share the same reality.

In the last few decades, narratives and stories have attracted the interest of organizational researchers and practitioners both as analytic tools and as a subject for study. This chapter explores the value of stories as a means of understanding culture, communicating values and ideals, promoting adaptive change, and developing cooperation and identification with the new merged organization. It illustrates the application of narrative methodologies within the context of a recent merger within the banking industry.

This study explores corporate strategic orientations as important drivers of firms’ philanthropic engagement. Specifically, the purpose of this paper is to empirically examine the relationship between two broad corporate strategic orientations – domain offense (DO) and domain abandonment (DA) strategies – and the level of philanthropic engagement.

The authors propose that firms pursuing aggressive DO strategies are more likely to invest in corporate philanthropy as part of their market expansion efforts. On the contrary, firms pursuing DA strategies are less likely to invest in corporate philanthropy because of decreased slack resources, rather conservative external stakeholder expectations as well as a firm’s conscious decision to disengage with external stakeholders. Hierarchical multiple regression analysis was conducted using data from 122 publicly traded US corporations from 2008 to 2013.

The findings provided empirical support for a significant positive relationship between DO strategies (acquisition and strategic alliance intensity) and firms’ philanthropic engagement. However, the relationship between DA strategies (divestiture and plant/facility closing) and firms’ philanthropic engagement was not found to be significant. Overall, the findings indicated that philanthropic engagements along with carefully crafted DO strategies help firms expand their market presence.

Organizational leaders that systematically target philanthropic causes that effectively converge with important corporate strategies do benefit in the long run by achieving better brand equity and overall enhanced corporate reputation.

By empirically investigating the relationship between corporate strategic orientations and philanthropic engagement, this study contributes to the on-going scholarly discussion on the link between corporate strategies and philanthropic engagements.