Merger and Acquisitions

Paper Summary:

This paper explains that the purpose of this study is (1) to develop and test the integrative model that synthesizes theoretical perspectives on the strategic combination, organizational integration, resource management (HRM) and financial performance components of merger and acquisitions (M&As) and (2) to examine the mechanisms through which several critical characteristics of an acquisition affect its performance. The author describes in detail the reasons for selecting the case methodology instead of a questionnaire and for using the qualitative methods. The paper relates that this research provides new insight on the effects of relative size on acquisition performance by suggesting that bigger acquisitions do better because they offer greater synergy potential, not because managers pay more attention to the integration process when targets are large as suggested in past research. Tables.

Table of Contents
Introduction
Problem Statement
Purpose of the Study
Rationale of the Study
Scope and Objectives
Summary
Literature Review
Combination Potential
Organizational Integration
Employee Resistance
Interrelationships among Antecedents of M&A Performance
Management Style Similarity
Cross-border Combination
Relative Size
Methodology
Sample
Measures
Reliability and Validity of the Data
Data Analysis
Results
Findings
Discussion
Analysis
Future Implications
Summary
Conclusion
Summary
Recommendations

From the Paper:

"Organizational and HRM researchers have pointed out that strategic combination potentials are not automatically realized, and that the extent of synergy realization depends on how the new organization is managed after the M&A deal is closed (Datta 1998, Hunt 2004, Schweiger et al. 2001). Organizational integration, defined as the degree of interaction and coordination between the two firms involved in a merger or acquisition, is commonly cited as an important consideration in the M&A process (Buono and Bowditch 2004, Pablo 1998, Shrivastava 2004, Yunker 2003). Indeed, numerous typologies of organizational integration processes have been suggested in the literature, each distinguishing between high and low degrees of integration (e.g., Haspeslagh and Jemison 1998, Hunt 2004, Napier 2004). The degree of integration has also been used as a moderator of the organizational fit/M&A performance relationship by Datta (1998), who found it to be non-significant in his study."

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