Session 257

Acquisition Performance

Track F

Date: Tuesday, October 9, 2012

 

Time: 11:00 – 12:15

Common Ground

Room: Terrace 2


Facilitator:

  • Kimberly Ellis, Florida Atlantic University

Title: A Behavioral Theory of Acquisition Performance: How Aspirations and Entrepreneurial Orientation Influence Value Creation Through Acquisitions

Authors

  • Pasi Kuusela, University of Zurich
  • Thomas Keil, University of Zurich
  • Markku Maula, Aalto University

Abstract: The behavioral theory of the firm posits that firms are more likely to engage in risky actions such as acquisitions when their performance falls behind aspirations. One aspect that has received less attention is the performance consequences of actions that are triggered by performance shortfall. We study this in the context of acquisitions and show two important contingencies for acquisition performance. Acquisition performance depends both on the firm’s deviation from the aspired performance level and top management attention categories, here operationalized through entrepreneurial orientation as these factors impact both the identification of acquisition and integration opportunities. Our research contributes to acquisitions research by improving the understanding of under what circumstances do acquisitions lead to value creation.

Title: Buy It up, Bring the Noise!

Authors

  • Scott Graffin, University of Georgia
  • Jerayr Haleblian, University of California, Riverside
  • Jason Kiley, University of Georgia

Abstract: Drawing on impression management theory, we posit that firms will use press releases around acquisition announcement dates (i.e., “strategic noise”) to manage investor expectations of acquisition events. Initial results are consistent with this hypothesis. In addition, we predict that characteristics of the firm and of the acquisition will influence the likelihood of strategic noise usage. We believe results from this paper will have implications for impression management theory and will help better explain acquisition performance.

Title: From Partnership to Acquisition: The Influence of Inter-organizational Routines and Trust on Post-acquisition Performance

Authors

  • Kerstin Neumann, University of Innsbruck

Abstract: This conceptual article examines experiential processes across external corporate development activities. We link alliance and M&A research by investigating how partner specific alliance experience impacts post-acquisition performance. Literature claims that inter-organizational routines and trust from prior alliance experience should have a positive performance effect. However, the specific nature of the spillover effect is yet to be studied. We argue that the nature of this performance impact depends on the combined effect of post-acquisition management decisions (integration level and top management replacement) and the value logic. We suggest that inter-organizational routines and trust positively impacts the level of integration, but negatively influences the top management replacement. Importantly, depending on the value logic, both dimensions of management decisions shift performance either away from or towards the optimum.

Title: Similarity or Dissimilarity? Organizational Status, Integration Mode, and Acquisition Performance

Authors

  • Jungeun Lee, Korea University

Abstract: Although many researchers have investigated the factors that affect the relationship between M&A and its performance, the answers remain ambiguous. This paper attempts to explain acquisition performance through status dissimilarity and integration modes between the acquiring and the acquired firms. We argue that high status acquirers will generate positive acquisition performance with their status advantages over target companies. We further suggest that the impact of integration mode – partnership or integration approach – is contingent upon the status dissimilarity between the acquired and the acquiring firms. We hypothesize that the integration approach leads to positive acquisition performance when an acquirer has a higher status than a target, whereas partnership approach is more advantageous when an acquired firm has a higher status than an acquiring firm.

Title: Status Deference in Large M&As of Similar-sized Firms

Authors

  • Bruce Lamont, Florida State University
  • Kimberly Ellis, Florida Atlantic University
  • Sangbum Ro, Florida State University

Abstract: Disagreements exist in M&A research as to whether post-acquisition performance is enhanced by retaining target executives. We blend status deference theory and justice theory to extend our understanding of the effects of target management retention and M&A decision-making process characteristics on acquisition performance. In the context of large, related deals involving firms of similar size, we argue that retaining target managers has detrimental effects on post-deal performance due to status deference ambiguity that complicates integration. We also argue, however, that the acquiring firm’s systematic efforts to enhance procedural justice perceptions positively moderates the influence of target management retention and target board involvement on M&A performance during the integration phase. The results support our hypotheses.

Title: The Acquisition Performance of Italian Fashion Companies: The Interacting Effects of Brands and Diversification

Authors

  • Nicola Misani, Bocconi University
  • Paola Varacca Capello, Bocconi University

Abstract: We investigate the acquisition performance of fashion companies, which have competencies that are highly abstract and intangible, and therefore difficult to transfer. Basing on the literature on the transfer of knowledge assets, we argue that there is variance among the players of this industry in terms of types of competencies (more abstract and intangible or less abstract and intangible) and that this variance explains differences in post-acquisition performance. We focus in particular on the moderating effects of the degree of diversification involved in the acquisition. Our empirical study, on a sample of 115 acquisitions made by fashion companies in Italy, brings empirical support to our hypotheses.

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 123: Capabilities and Corporate Strategy
Sun: 09:30 – 10:45
Session 124: Corporate Strategy and the Role of the Manager
Sun: 11:15 – 12:30
Session 125: Publishing Strategic Management Research
Mon: 08:00 – 09:15
Session 256: Resource Sources and Corporate Strategy: Location, Funding and Advisors
Mon: 09:30 – 10:45
Session 79: Diversification Strategy and Firm Performance
Mon: 13:30 – 14:45
Session 88: Managing Firm Boundaries: Growth, Divestitures and Networks
Mon: 16:30 – 17:45
Session 77: Transformation, Renewal and Corporate Strategy
Tue: 08:00 – 09:15
Session 80: Acquisition Experience, Intensity and Performance
Tue: 11:00 – 12:15
Session 257: Acquisition Performance
Tue: 14:15 – 15:30
Session 86: Corporate Strategy: Expanding Understanding and Knowledge
Tue: 15:45 – 17:00
Session 253: New Insights into Relatedness and Performance


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