Hybridization in Mergers and Acquisitions

According to numerous studies, mergers and acquisitions (M&As) tend to fail more often than being profitable. While strategic fit seems to be a pre-requisit for M&A sucess, organizational culture differeces between merging organizations seem to set boundaries for achieving the synergies identified prior to the deal. This doctoral thesis deals with hybridization, i.e. the blending of organizational cultures, in the context of M&As and provides detailed insights into how this phenomenon shapes the outcome of such strategic activities. Based on a qualitative research design (3 case studies, grounded theory, 55 narrative interviews) five different forms of hybridization were identified: (1) Vintage concept of hybridization, (2) deck of cards concept of hybridization, (3) uncontrolled local adaptation of management knowledge, (4) boundary spannind, and (5) people's twist. Major findings of this doctoral thesis suggest, that most forms of hybridization have rather a negative impact on the M&A performance. Moreover, the outcome of such deals is strongly depending on contextual factors and the acculturation strategy chosen to harmonize existing cultural values, strategies, organizational structures and operations. Finally, financial key ratios to assess the success of M&As could only partly illustrate what had been found through narrative interviews,. Thus, measuring M&A success should not only be based on quantitative measures. This doctoral thesis suggest a more holistic approach to M&A research, when considering cultural effects on the organizational level of analysis. (author's abstract)

[1]  P. Puranam,et al.  What They Know vs. What They Do: How Acquirers Leverage Technology Acquisitions , 2007 .

[2]  Andreas Voigt,et al.  Do Cultural Differences Matter in Mergers and Acquisitions? A Tentative Model and Examination , 2008, Organ. Sci..

[3]  H. Barkema,et al.  FOREIGN ENTRY, CULTURAL BARRIERS, AND LEARNING , 1996 .

[4]  Elliroma Gardiner,et al.  Generational differences in personality and motivation: Do they exist and what are the implications for the workplace? , 2008 .

[5]  Timothy W. Ruefli,et al.  The Strategy/Structure Debate: An Examination of the Performance Implications , 2000 .

[6]  Jiatao Li,et al.  Comparative Business Failures of Foreign-Controlled Firms in the United States , 1991 .

[7]  E. A. Locke.  The Case for Inductive Theory Building† , 2007 .

[8]  C. Argyris.  Double Loop Learning in Organizations , 1996 .

[9]  Paul W. Beamish,et al.  Entry Mode and Performance of Japanese FDI in Western Europe , 1996 .

[10]  Catriona Duncan,et al.  Determinants of International Acquisition Success:: Lessons from FirstGroup in North America , 2006 .

[11]  David R. King,et al.  Reducing Causal Ambiguity in Acquisition Integration: Intermediate Goals as Mediators of Integration Decisions and Acquisition Performance , 2008 .

[12]  Jeffrey A. Krug,et al.  Executive perceptions in foreign and domestic acquisitions: an analysis of foreign ownership and its effect on executive fate , 2001 .

[13]  H. Barkema,et al.  International Expansion Through Start-Up or Acquisition: A Learning Perspective , 1998 .

[14]  Andrei Kuznetsov,et al.  Barriers to the absorption of management knowledge in Belarus , 2005 .

[15]  Andrew C. Inkpen,et al.  Cross-Border Acquisitions of U.S. Technology Assets , 2000 .

[16]  Duncan N. Angwin.  Speed in M&A integration:the first 100 days , 2004 .

[17]  A. Denisi,et al.  Communication with Employees Following a Merger: A Longitudinal Field Experiment , 1991 .

[18]  Deepak K. Datta,et al.  Cross-border Acquisitions: An Examination of the Influence of Relatedness and Cultural Fit on Shareholder Value Creation in U.S. Acquiring Firms1 , 1995 .

[19]  Anna Nadolska,et al.  Learning to internationalise: the pace and success of foreign acquisitions , 2007 .

[20]  N. Ashkanasy,et al.  The Impact of Leadership and Change Management Strategy on Organizational Culture and Individual Acceptance of Change During a Merger , 2006 .

[21]  R. Caves.  Industrial Organization, Corporate Strategy and Structure , 1980 .

[22]  Louis T. Wells,et al.  Managing the multinational enterprise , 1972 .

[23]  Harbir Singh,et al.  Deliberate learning in corporate acquisitions: post‐acquisition strategies and integration capability in U.S. bank mergers , 2004 .

[24]  Bernard Yeung,et al.  Internalization : An event study test , 1992 .

[25]  Dennis A. Gioia,et al.  Sensemaking and sensegiving in strategic change initiation , 1991 .

[26]  S. Finkelstein,et al.  Integrating Strategic, Organizational, and Human Resource Perspectives on Mergers and Acquisitions: a Case Study of Synergy Realization , 1999 .

[27]  Srilata Zaheer,et al.  Identity Versus Culture in Mergers of Equals , 2003 .

[28]  Stacy Campbell,et al.  Generational differences in psychological traits and their impact on the workplace , 2008 .

[29]  C. Meyer,et al.  Value Leakages in Mergers and Acquisitions: Why they occur and how they can be addressed , 2008 .

[30]  T. Jick.  Mixing Qualitative and Quantitative Methods: Triangulation in Action. , 1979 .

[31]  Christian Homburg,et al.  Is Speed of Integration really a Success Factor of Mergers and Acquisitions? : An Analysis of the Role of Internal and External Relatedness , 2006 .

[32]  G. Hofstede,et al.  Measuring organizational cultures: A qualitative and quantitative study across twenty cases. , 1990 .

[33]  J. Weiler.  The Constitution of Europe: "Do the New Clothes Have an Emperor?" and Other Essays on European Integration , 1999 .

[34]  Norbert K Tanzer,et al.  Bias and equivalence , 2000 .

[35]  P. Porrini,et al.  Can a Previous Alliance Between an Acquirer and a Target Affect Acquisition Performance? , 2004 .

[36]  M. Lubatkin,et al.  Relative standing and the performance of recently acquired European firms , 1997 .

[37]  Philip Babcock Gove,et al.  Webster's third new international dictionary of the English language, unabridged, with seven language dictionary , 1971 .

[38]  David A. Waldman,et al.  Alternative forms of charismatic leadership in the integration of mergers and acquisitions , 2009 .

[39]  Gerhard Fink,et al.  Cross-cultural competence and management - setting the stage , 2009 .

[40]  O. Williamson.  Markets and hierarchies, analysis and antitrust implications : a study in the economics of internal organization , 1975 .

[41]  Maurizio Zollo,et al.  A Bird in the Hand or Two in the Bush?: Integration Trade-offs in Technology-grafting Acquisitions , 2003 .

[42]  H. Barkema,et al.  Learning Through Acquisitions , 2001 .

[43]  J. Hennart,et al.  Do Foreign Greenfields Outperform Foreign Acquisitions or Vice Versa? An Institutional Perspective , 2008 .

[44]  Shalom H. Schwartz,et al.  Cultural values in organisations: insights for Europe , 2007 .

[45]  M. Lubatkin,et al.  CULTURAL DIFFERENCES AND SHAREHOLDER VALUE IN RELATED MERGERS: LINKING EQUITY AND HUMAN CAPITAL , 1992 .

[46]  R. Chakrabarti,et al.  Mars–Venus marriages: Culture and cross-border M&A , 2009 .

[47]  Dusya Vera,et al.  Transformational leadership and ambidexterity in the context of an acquisition , 2009 .

[48]  L. Vogel,et al.  Strategy and Structure , 1986 .

[49]  Phanish Puranam,et al.  Integrating Acquired Capabilities: When Structural Integration is (Un)Necessary , 2005 .

[50]  H. Boeije.  A Purposeful Approach to the Constant Comparative Method in the Analysis of Qualitative Interviews , 2002 .

[51]  K. Oberg.  Cultural Shock: Adjustment to New Cultural Environments , 1960 .

[52]  Keith D. Brouthers,et al.  Acquisition or greenfield start-up? Institutional, cultural and transaction cost influences , 2000 .

[53]  R. Yin.  Case Study Research: Design and Methods, 3rd Edition , 2002 .

[54]  J. Bartunek.  Changing Interpretive Schemes and Organizational Restructuring: The Example of a Religious Order , 1984 .

[55]  Satu Teerikangas,et al.  The Culture-Performance Relationship in M&A: From Yes/No to How , 2006 .

[56]  Julian Birkinshaw,et al.  Knowledge transfer in international acquisitions , 1999 .

[57]  E. Schein.  Organizational Culture and Leadership , 1991 .

[58]  H. Triandis,et al.  Cultural Variations in the Cross-Border Transfer of Organizational Knowledge: An Integrative Framework , 2002 .

[59]  Atul Nerkar,et al.  Acquisition Integration and Productivity Losses in the Technical Core: Disruption of Inventors in Acquired Companies , 2006, Organ. Sci..

[60]  Yaakov Weber,et al.  Corporate Cultural Fit and Performance in Mergers and Acquisitions , 1996 .

[61]  Harbir Singh,et al.  The Effect of National Culture on the Choice of Entry Mode , 1988 .

[62]  K. Eisenhardt.  Building theories from case study research , 1989, STUDI ORGANIZZATIVI.

[63]  B. Kogut,et al.  Knowledge of the Firm, Combinative Capabilities, and the Replication of Technology , 1992 .

[64]  C. Perrow.  A FRAMEWORK FOR THE COMPARATIVE ANALYSIS OF ORGANIZATIONS , 1967 .

[65]  S. Ranson.  The Structuring of Organizational Structures. , 1980 .

[66]  L. Gnan,et al.  Integrating Cross-Border Acquisitions: A Process-oriented Approach , 2007 .

[67]  C. Cooper,et al.  The role of culture compatibility in successful organizational marriage , 1993 .

[68]  R. Grant.  Toward a Knowledge-Based Theory of the Firm,” Strategic Management Journal (17), pp. , 1996 .

[69]  G. Mancini.  Europe: The Case for Statehood , 1998 .

[70]  M. Alvesson.  Understanding organizational culture , 2002 .

[71]  Richard Whittington,et al.  What Is Strategy and Does It Matter , 1998 .

[72]  Sabine Reddy,et al.  The choice between mergers/acquisitions and joint ventures : The case of Japanese investors in the United States , 1997 .

[73]  J. Walsh.  Top management turnover following mergers and acquisitions , 1988 .

[74]  Harbir Singh,et al.  Organizing for Innovation: Managing the Coordination-Autonomy Dilemma in Technology Acquisitions , 2006 .

[75]  Maurice Yolles,et al.  Exploring public–private partnerships through knowledge cybernetics , 2006 .

[76]  H. Ansoff.  Corporate strategy : an analytic approach to business policy for growth and expansion , 1965 .

[77]  H. Barkema,et al.  Toward Unlocking The Full Potential of Acquisitions: The Role of Organizational Restructuring , 2008 .

[78]  Robert S. Harris,et al.  The Role of Acquisitions in Foreign Direct Investment: Evidence from the U.S. Stock Market , 1991 .

[79]  Nava Pliskin,et al.  The effects of information systems integration and organizational culture on a firm's effectiveness , 1996, Inf. Manag..

[80]  Constantinos C. Markides,et al.  Shareholder Benefits from Corporate International Diversification: Evidence from U.S. International Acquisitions , 1994 .

[81]  M. Hurt,et al.  Transfer of managerial practices by French food retailers to operations in Poland , 2005 .

[82]  Marc J. Epstein,et al.  The Drivers of Success in Post-Merger Integration , 2004 .

[83]  M. Hitt,et al.  Theoretical foundations of cross-border mergers and acquisitions: A review of current research and recommendations for the future , 2004 .

[84]  Ali R. Malekzadeh,et al.  Acculturation in Mergers and Acquisitions , 1988 .

[85]  Robert T. Hamilton,et al.  THE RELATIONSHIP BETWEEN STRATEGY‐STRUCTURE FIT AND FINANCIAL PERFORMANCE IN NEW ZEALAND: EVIDENCE OF GENERALITY AND VALIDITY WITH ENHANCED CONTROLS* , 1992 .

[86]  H. Bradbury,et al.  Handbook of action research : participative inquiry and practice , 2001 .

[87]  Sam Rovit,et al.  Integrate where it matters , 2004 .

[88]  Nancy K. Napier,et al.  Mergers and Acquisitions, Human Resource Issues and Outcomes: A Review and Suggested Typology* , 1989 .

[89]  Robert E. Hoskisson,et al.  Resource complementarity in business combinations: Extending the logic to organizational alliances , 2001 .

[90]  K. Andrews.  The Concept of Corporate Strategy , 1971 .

[91]  A. Raveh,et al.  National and corporate cultural fit in mergers/acquisition: an exploratory study , 1996 .

[92]  Keith D. Brouthers,et al.  Institutional, cultural and transaction cost influences on entry mode choice and performance , 2002 .

[93]  E. Vaara,et al.  Cultural differences and capability transfer in cross-border acquisitions: the mediating roles of capability complementarity, absorptive capacity, and social integration , 2007 .

[94]  C. Vance,et al.  Forms of host‐country national learning for enhanced MNC absorptive capacity , 2005 .

[95]  Rikard Larsson,et al.  Achieving Acculturation in Mergers and Acquisitions: An International Case Survey , 2001 .

[96]  Scott Shane,et al.  National Cultural Distance and Cross-Border Acquisition Performance , 1998 .

[97]  Kimberly M. Ellis,et al.  The effects of procedural and informational justice in the integration of related acquisitions , 2009 .

[98]  David B. Jemison,et al.  The challenge of renewal through acquisitions , 1991 .