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Article
Publication date: 12 July 2022

Feiqiong Chen, Wenjing Wang and Jieru Zhu

Post-merger integration (PMI) is driven by coevolving processes. By integrating the literature on acquisitions with that of knowledge networks, this paper highlights different…

Abstract

Purpose

Post-merger integration (PMI) is driven by coevolving processes. By integrating the literature on acquisitions with that of knowledge networks, this paper highlights different reconstruction mechanisms for dual knowledge networks during PMI – namely, internal knowledge network coupling and external knowledge network embeddedness. This paper aims to examine their coevolutionary relationships with PMI.

Design/methodology/approach

A coevolutionary framework is tested using a latent growth model and cross-lagged models. The analysis is based on longitudinal data collected from 116 Chinese technology-sourcing overseas merger and acquisition firms.

Findings

This paper unearths a novel idea that variations in post-merger reconstruction of dual knowledge networks can explain why some acquirers increase the degree of integration faster than the others. The results show that the internal knowledge network coupling leads to more knowledge similarity and, in turn, causes a higher degree of integration. The external knowledge network embeddedness also causes higher relative network status of the acquirer, which consequently leads to a higher degree of integration. Furthermore, results from cross-lagged models confirm that an increase in the degree of integration positively influences subsequent changes in the internal knowledge network coupling and external knowledge network embeddedness, thus forming a coevolutionary relationship over time.

Originality/value

This paper responds to recent calls for more insights into the dynamics of PMI. By highlighting different reconstruction mechanisms for internal and external knowledge networks during PMI, this paper explains why it is important to understand PMI dynamics from a dual knowledge network perspective. This paper is the first to adopt a coevolutionary perspective and provide a more comprehensive dynamic framework between PMI and reconstruction of dual knowledge networks. Besides, this paper contributes to the research on emerging market multinational corporations’ cross-border merger and acquisition integration from a dynamic perspective, revealing the time effects of traditionally favored light-touch integration.

Details

Chinese Management Studies, vol. 17 no. 4
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 3 April 2018

Irene Maria Schönreiter

Post-merger integration (PMI) has received much attention in recent years due to an increasing number of merger and acquisitions (M&As). Process harmonization plays an important…

2722

Abstract

Purpose

Post-merger integration (PMI) has received much attention in recent years due to an increasing number of merger and acquisitions (M&As). Process harmonization plays an important role during the PMI. The purpose of this paper is to find out if there is any methodology available for process harmonization in the PMI phase. From a PMI/M&A perspective, business process management (BPM)/quality management perspective and change management perspective, the existing literature is analyzed.

Design/methodology/approach

A structured literature review covering a wide field of publications in the interface of BPM, quality management and PMI-related publications is used to identify process harmonization methodologies after M&A and disclosing interrogations for future research.

Findings

There is hardly any connection found between PMI and business process harmonization in literature. While information technology/systems integration in PMI is researched in various publications, a special methodology or integration approach tailored for business processes and management systems is not available despite numerous literatures on PMI, BPM, quality management and change management. Nonetheless, these articles contain relevant recommendations as a part of the big picture. So here lies the optimal starting point for future research.

Research limitations/implications

Although this literature review has regarded publications of numerous databases, limitations might follow the selective citation due to thousands of articles in the field of M&A, PMI, BPM and quality management. Further, process harmonization and standardization have been regarded in largely as synonyms.

Originality/value

To the best of the authors’ knowledge, no systematic literature review in this interface has been previously published.

Details

Business Process Management Journal, vol. 24 no. 2
Type: Research Article
ISSN: 1463-7154

Keywords

Article
Publication date: 12 January 2010

Bärbel Lauser

The purpose of this paper is to analyse change processes in the post‐merger integration (PMI) phase from a complexity theory perspective. Therefore, it looks at the merged…

3767

Abstract

Purpose

The purpose of this paper is to analyse change processes in the post‐merger integration (PMI) phase from a complexity theory perspective. Therefore, it looks at the merged organisation as a complex adaptive system (CAS).

Design/methodology/approach

Post‐merger situations borrowed from literature and a one‐day expert workshop with integration managers are related to the characteristics of CASs. During the workshop, data of the change process in different PMI phases are collected and the integration activities are analysed with a coded event history analysis.

Findings

Change processes in the PMI phase are very complex and the newly merged organisations experience tension and non‐linear behaviour, but positive self‐organisation, a major property of CASs, cannot always emerge as the required prerequisites are sometimes not given.

Research limitations/implications

Insights of the workshop are limited to personal statements of the participants. In order to further investigate the PMI process under a complexity perspective, additional research in the form of longitudinal case studies including methods of storytelling and narratives should be considered.

Practical implications

Leaders and integration managers need a great repertoire of behaviours in order to both manage the challenging change processes by planning and controlling the integration activities and allow self‐organisation to emerge.

Originality/value

The paper offers a deeper understanding of the complex change processes in the PMI phase by using the metaphor of complexity theory and CASs.

Details

Baltic Journal of Management, vol. 5 no. 1
Type: Research Article
ISSN: 1746-5265

Keywords

Article
Publication date: 30 June 2020

Eva Schlindwein and Mike Geppert

The purpose of this paper is to advance micro-level theorising of sociocultural post-merger integration (PMI) by merging insights from international business and management…

Abstract

Purpose

The purpose of this paper is to advance micro-level theorising of sociocultural post-merger integration (PMI) by merging insights from international business and management research on the cognitive and affective dimensions of PMI.

Design/methodology/approach

The paper follows a narrative approach to review the previously separate literatures on cognition and emotion in PMI situations. It draws on insights from management research beyond the PMI context to integrate these literatures and as a result, develops a process model of emotional sensemaking in PMI.

Findings

An emotional sensemaking approach to PMI helps to explain when and why events might or might not motivate individuals to revisit their interpretation of a PMI and illustrates how and why similar PMI events can lead to opposite individual reactions and, thus, obtain heterogeneous integration outcomes.

Research limitations/implications

The paper discusses how an emotional sensemaking approach can be applied to sociocultural PMI and points to new directions for future studies based on this application. As the model concentrates on the individual level, theoretical implications for sociocultural PMI at the meso- and macro-levels remain limited.

Originality/value

This paper brings forward the dynamics that underlie the processes and outcomes of individuals’ behaviour and reactions to PMI events. The proposed process model of emotional sensemaking in PMI responds to recent calls by sociocultural PMI scholars to promote a processual rather than event-based view of PMI, with a focus on individual actors and an emphasis on the multifaceted dynamics and outcomes of PMI.

Details

critical perspectives on international business, vol. 17 no. 3
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 15 June 2023

Ercan Emin Cihan, Cigdem Alabas Uslu and Özgür Kabak

This study aims to develop a new integrated decision-making framework specifically designed to address complexity and uncertainty for project portfolio management. It particularly…

425

Abstract

Purpose

This study aims to develop a new integrated decision-making framework specifically designed to address complexity and uncertainty for project portfolio management. It particularly focuses on managing portfolios in a post-merger context. The paper portrays a normative and prescriptive approach to effectively creating a well-balanced project portfolio in a post-merger scenario.

Design/methodology/approach

This study introduces hyper-project portfolio frame as a prospective methodology for evaluating post-merger portfolios. The proposed method especially addresses the challenges associated with integration following a merger.

Findings

Hyper-project portfolio frame provides fundamental leaps in post-merger project portfolios. The frame gives opportunities to check consistency with policy, organizational scalability, flexibility and product diversity. It also underpins achieving the strategic objectives of mergers and acquisitions (M&As).

Research limitations/implications

The literature synthesis is approached from an interpretative standpoint. The research incorporates discussions and comparative studies from the relevant literature and introduces a novel approach. Additionally, new descriptive studies can expand the proposed process-oriented decision-making. Moreover, this research does not consider hostile takeovers.

Originality/value

Nested in content and process-oriented fashion, the frame provides suitable prequalification analysis for portfolios in a post-merger under the concepts of complexity, uncertainty, risk and value.

Details

Management Decision, vol. 61 no. 8
Type: Research Article
ISSN: 0025-1747

Keywords

Article
Publication date: 8 April 2022

Feiqiong Chen, Wenjing Wang and Jieru Zhu

Post-merger integration (PMI) is driven by coevolving processes. This paper examines the coevolution of dynamic integration strategy and network reconstruction and explores how…

Abstract

Purpose

Post-merger integration (PMI) is driven by coevolving processes. This paper examines the coevolution of dynamic integration strategy and network reconstruction and explores how these processes systematically enable emerging market acquirers to upgrade innovation capabilities.

Design/methodology/approach

This paper conducts a multi-case study based on four Chinese overseas acquisitions of manufacturing firms. The data were collected from interviews and archival documentation.

Findings

This study develops a coevolutionary framework of dynamic integration strategy and network reconstruction to explain processes and mechanisms of an acquirer’s innovation capability upgrading. This framework identifies three network motivations, namely, network access, network connection and network synergy. Under different network motivations, dynamic transitions of the acquirer’s integration strategy coevolve with multi-level reconstruction of its networks. Collectively, they are important mechanisms driving innovation capability moves from imitation innovation to asportation and reimitation innovation and then to independent innovation.

Originality/value

This paper responds to a recent call for more insights into the dynamics of PMI and contributes to the research on emerging market multinational corporations’ post-acquisition integration. By integrating the M&A and networks literature, the paper provides evidence of unexplored mechanism of network changes during PMI. It reveals that how acquirers manage the dynamics of PMI to gradually achieve multi-level reconstruction of their networks. Based on a coevolutionary framework, the paper provides a process perspective on how the coevolution of PMI and network reconstruction promotes the upgrading of innovation capabilities.

Details

Journal of Organizational Change Management, vol. 35 no. 3
Type: Research Article
ISSN: 0953-4814

Keywords

Article
Publication date: 17 May 2018

Ashish Malik and Ralf Bebenroth

This paper aims to identify the role of language in international business context, especially in a post-merger integration (PMI) process, and to develop a framework for language…

Abstract

Purpose

This paper aims to identify the role of language in international business context, especially in a post-merger integration (PMI) process, and to develop a framework for language strategies in a PMI context.

Design/methodology/approach

Based on the authors’ review and building on earlier works, this paper develops a conceptual model regarding the use of language in different PMI scenarios and identifies the key resource mix that may be suited for an effective deployment of language strategies.

Findings

The authors find that the use of a language at target firms depends on the degrees of strategic interdependence and organizational autonomy. They classify different constellations of targets in a PMI context and propose the most appropriate language strategies for different classification of PMI firms.

Research limitations/implications

The authors develop five testable future research propositions based on our conceptual model. The paper is not without its limitations. The authors’ propositions need to be tested in future studies. It may be sometimes difficult to collect data based on all the four segments of firms using a quantitative design. It is also challenging to investigate about the language used at the target firms using quantitative designs.

Practical implications

The authors’ model has several practical implications for the managers. Bidder firm’s managers can decide the use of appropriate language depending on their acquisition strategy. It is very likely that target managers have to change the language following the acquisition, and because of this change, influence on their routines will be significant. This issue becomes most important if both firms do not speak the common corporate language – English language. The authors bring ideas for a best fit, which are applicable not just for merger and acquisition but also for other strategic sourcing areas such as outsourcing strategies.

Social implications

There are several negative emotions that are invoked through language. Language is also power laden and affects social structure and group dynamics at work. By addressing the use of appropriate language strategies, people can potentially avoid the dark side of language.

Originality/value

The authors present testable propositions for future research in a PMI context.

Details

Journal of Global Operations and Strategic Sourcing, vol. 11 no. 2
Type: Research Article
ISSN: 2398-5364

Keywords

Article
Publication date: 30 March 2022

Anne-Sophie Thelisson and Olivier Meier

Intergroup dynamics between the acquirer and the acquired are determinants of post-merger integration success. Mergers and acquisitions scholars call for the adoption of new…

Abstract

Purpose

Intergroup dynamics between the acquirer and the acquired are determinants of post-merger integration success. Mergers and acquisitions scholars call for the adoption of new reading prisms to gain deeper insights on post-merger integration dynamics as the failure rate of mergers remains high. In mobilizing works from social psychology to examine intergroup dynamics, this study aims to respond to this call by shedding light on the post-merger integration process. Typologies of integration processes do not take into account intergroup dynamics that operate within the new entity, which are influencing the decision-making process. To better understand how firms achieve a successful integration (symbiosis), the authors propose a processual analysis of intergroup dynamics in post-merger integration.

Design/methodology/approach

The research approach is a qualitative, longitudinal enquiry, which allows us to examine intergroup dynamics in two real-time merger case studies. The integration processes selected for this research include symbiotic integrations. Both integration processes were analyzed over two years, starting with the merger agreement.

Findings

This study sheds additional light on the triggers for achieving symbiosis integration by demonstrating the specific role and contribution of each of the parties (majority and minority) during the process. This study shows that post-merger is a process that follows different steps to reach symbiosis, involving majority/minority dynamics. The symbiosis implies minority innovation by adopting new business and organizational practices, mainly inspired by the standards and values of the minority. The study highlights innovation by the minority as a key element in achieving a symbiotic integration. This element can be understood by managers involved in managing the integration as a turning point in the integration process.

Research limitations/implications

The authors investigated symbiotic integration in specific industries; questions can arise about the extent to which findings are transferable to other mergers and acquisitions contexts.

Originality/value

This study advances the understanding of the dynamics between the majority and minority in adopting a processual and longitudinal analysis. On that point, this study gains insights on the “black box” that represents post-merger integration process.

Details

European Business Review, vol. 34 no. 3
Type: Research Article
ISSN: 0955-534X

Keywords

Article
Publication date: 13 September 2022

Yanan Yang

This paper aims to examine how Chinese multinational enterprises’ (CMNEs) autonomy-style post-merger integration (PMI) modes of managing developed-market targets evolve into…

Abstract

Purpose

This paper aims to examine how Chinese multinational enterprises’ (CMNEs) autonomy-style post-merger integration (PMI) modes of managing developed-market targets evolve into actual-form integration through the lens of ambidexterity.

Design/methodology/approach

This study adopts multi-case comparisons with content analysis. A data set was collected from 37 conversations by in-depth interviewing 29 respondents regarding four cases of Chinese acquisitions in the German market.

Findings

This study develops a three-stage framework that theorised CMNEs’ autonomy PMIs’ evolution to actual-form integration over time and the effect on acquisition value based on structural, temporal and contextual ambidexterity manifestations. The findings divide the evolutionary trajectory into two sub-trajectories, from great autonomy to autonomy-integration balanced or full integration, to illuminate the effect of different degrees of actual-form integration on value creation or value destruction.

Originality/value

The existing literature on CMNEs’ PMI discovered that CMNEs frequently grant ample autonomy when managing targets acquired from developed markets. However, long-term acquisition benefit is dependent on combining autonomy and actual-form integration; insights into how this can be accomplished are limited. The research is unique in that it reveals the evolutions of CMNEs’ PMIs on developed-market targets, from autonomy to actual-form integration through the lens of ambidexterity.

Details

Chinese Management Studies, vol. 17 no. 5
Type: Research Article
ISSN: 1750-614X

Keywords

Article
Publication date: 3 September 2021

Augusto Sales, Steffen Roth, Michael Grothe-Hammer and Ricardo Azambuja

The literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of…

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Abstract

Purpose

The literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of post-merger integration (PMI). Existing research has explored a broad variety of cultural differences in perceptions, such as those relating to expectations, norms, values and beliefs within the respective organizations, and how these affect the process and success of PMI. However, less attention has been paid to the relevance of the macro-societal context to PMI. The ambition of this article is, therefore, to advance our understanding of how macro-level societal factors define organizational cultures and affect the success of PMI.

Design/methodology/approach

We draw on social systems theory as devised by Niklas Luhmann, assuming that organizations are always embedded in the macro-level societal context of distinctive realms of social reality—such as the economy, politics, religion and the arts—that make up the so-called “function systems”. Looking at the case of the integration of a Brazilian technology start-up into a market-leading corporation, we analyze the dominant orientations towards these function systems, and the changes in these orientations over time.

Findings

The results suggest that differences in organizational culture in PMI can be partly explained by differences in orientations to the function systems. Moreover, forcing dramatic changes of orientations towards the function systems within a merged entity can severely damage its raison d'etre in the first place, potentially leading to, in some sense, an account of “culture murder”.

Originality/value

This article is unique in demonstrating that organizations are multifunctional systems whose culture is defined by the highly specific and potentially varying degrees of importance they place on individual function systems and that knowledge or neglect of these functional profiles may seriously affect the success of post-merger integration. Against this backdrop, the article presents a multifunctional profiling method that may easily translate into PMI management tools.

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