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Efficient post-merger integration’s effect on innovation output under different resource backgrounds
Source publication
Overseas mergers and acquisitions (M&A) proposed by companies from emerging economies have been aiming to secure outward technology sourcing from developed countries in order to improve their technology innovation abilities in recent years. This paper proposes a comprehensive analytical framework of post-merger integration’s influence on technology...
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Streszczenie
W artykule przedstawiono wzorcową procedurę realizacji fazy integracji w procesach fuzji
i przejęć. Przedstawione w pracy tezy są efektem badań empirycznych, dotyczących kilkudziesięciu transakcji M&A zrealizowanych w Polsce w latach 2010-2015, analiz wewnętrznych, dokumentacji przedsiębiorstw oraz wywiadów pogłębionych. Działania zwią...
This paper investigates the correlates of merger and acquisition (M&A) success, focusing on the crucial pre-M&A stage. We first seek to improve understanding the different phases of this process. Then, importantly, we identify the relevant success factors, and link each success factor to a specific phase. Our exploratory methodology includes analys...
The advancement of globalization has encouraged an increasing number of enterprises to go abroad and take cross-border mergers and acquisitions (M&A) to expand their overseas market and improve core competitiveness, although many acquirers fail to gain value from post-acquisition integration. On the basis of organizational learning theory, this pap...
Citations
... Prior static-view studies articulated that pre-merger resource similarity or complementary leads to different integration degrees and targets' autonomy levels (F. Chen et al., 2017); given that, integration degree should not be constant but could change with bilateral resource relatedness varying when PMI is unfolding with time elapsing. Arguably, the understanding of dynamic resource interactions during the post-merger period remains an under-appreciated topic with a necessity for further theory exploration. ...
... Typically, when two sides' products are highly similar, acquirers should remove as much suppliers' duplication as possible to reduce production costs and realize economies of scale; when market network resource is complimentary, acquirers should choose lower integration to maximize market shares (F. Chen et al., 2017). However, CMNEs ignoring targets' threats made the thing go to another way. ...
Integrating the developed-market resources after acquisitions is a crucial tool for Chinese multinational enterprises (CMNEs) to accelerate industrial high-quality development. However, existing theories have scarce thorough explanations of the dynamic mechanism of CMNEs’ post-merger integrating resources. Our research aims at disclosing CMNEs’ post-merger integration (PMI) long-term dynamics under resource relatedness changes. We applied a multiple-case study with four typical CMNEs’ German-market PMI cases and proposed a theoretical framework based on a coding analysis of 38 interviews. Our findings highlight that: CMNEs change initial gentle integrations (partnering/preservation) to balance dependence when pre-merger resources complementary decreases with similarity increasing, or to extreme dependence when pre-merger resources similarity continually increases to extremely high. Pre-merger resource relatedness basics and later changes and CMNEs’ dynamic capability (threat and development potentials’ perception capabilities and utilization capability) are crucial factors in promoting CMNEs’ PMI changes. Our originality lies in that we consider the interactions resource relatedness changes and CMNEs’ PMI dynamics, strongly replenishing the deficiency of current PMI dynamic studies that lack considerations of resource relatedness changing; also, we simultaneously consider the two facets of dependence asymmetry and joint dependence such that broadened the application of resource dependence theory (RDT) in PMI studies. Our study offers managerial insights into CMNEs’ development leapfrog through acquisitions in developed markets that CMNEs should focus on the vital role of inter-firm resource relatedness changing. Initial gentle integration can be deepened when original resource backgrounds become more similar but should be cautious of the effect of power imbalance and selfish actions.
... Focusing on the common goal of collaborative innovation, with the complementarity of resources as the premise, the interaction of human capital as the key, and the sharing of various types of innovation resources as the focus, we fully gather the advantageous resources of each innovation body to achieve complementary mutual use. Integrate resources with the premise of complementarity of resources (Chen et al., 2017). The complementarity of innovation resources of universities and enterprises is an important internal driving force for both sides to carry out cooperation. ...
Taking university-enterprise collaborative innovation in five southern coastal provinces of China as subjects, empirical research is implemented by constructing a theoretical model of the effects of interface resource integration, interface conflict management, interface connection mechanisms, and enterprise absorptive capacity on the university-enterprise collaborative innovation performance with the partial least squares structural equation modeling and fuzzy-set qualitative comparative analysis. A total of 245 valid questionnaires were collected from five coastal provinces in south China. The research results show that the interface resource integration, interface connection mechanisms, and enterprise absorptive capacity has direct significant positive impacts on the collaborative innovation performance. Interface conflict management has no significant impact on school-enterprise collaborative innovation performance. Moreover, the interface connection mechanism acts as an intermediary. Therefore, it is suggested that university-enterprise should integrate resources with complementing, interacting, and sharing resources; construct the profit and risk-sharing mechanism, communication and trust mechanism, and organizational learning mechanism.
... Focusing on the common goal of collaborative innovation, with the complementarity of resources as the premise, the interaction of human capital as the key, and the sharing of various types of innovation resources as the focus, we fully gather the advantageous resources of each innovation body to achieve complementary mutual use. Integrate resources with the premise of complementarity of resources (Chen et al., 2017). The complementarity of innovation resources of universities and enterprises is an important internal driving force for both sides to carry out cooperation. ...
Taking university-enterprise collaborative innovation in five southern coastal provinces of China as subjects, empirical research is implemented by constructing a theoretical model of the effects of interface resource integration, interface conflict management, interface connection mechanisms, and enterprise absorptive capacity on the university-enterprise collaborative innovation performance with the partial least squares structural equation modeling and fuzzy-set qualitative comparative analysis. A total of 245 valid questionnaires were collected from five coastal provinces in south China. The research results show that the interface resource integration, interface connection mechanisms, and enterprise absorptive capacity has direct significant positive impacts on the collaborative innovation performance. Interface conflict management has no significant impact on school-enterprise collaborative innovation performance. Moreover, the interface connection mechanism acts as an intermediary. Therefore, it is suggested that university-enterprise should integrate resources with complementing, interacting, and sharing resources; construct the profit and risk-sharing mechanism, communication and trust mechanism, and organizational learning mechanism.
... Companies will strengthen their knowledge transfer by merging innovative resources related to their R&D and reduce competition in the market (Fernández et al. 2019). Compared with FDI, M&As are more efficient for increasing R&D capabilities (Sher and Yang 2005); therefore, innovative companies can rapidly commercialize innovations through M&As (Chen et al. 2017), which will help them meet consumer utility and stimulate economic growth. Therefore, WIPO will encourage the creation of more innovative behaviours by granting innovators intellectual property or patents. ...
... On the other hand, acquisition innovation capability is one of the main motives of M&As, and there is a positive relationship between task integration and innovation output after mergers (Bauer et al. 2016). The positive interaction between complementarity and resource similarity will trigger more M&As and increase the degrees of autonomy and integration, thus affecting the innovation performance of the acquiring company (Chen et al. 2017). However, these studies are based on the assumption that the acquiring company had made M&A decisions and did not detail M&As according to the target countries. ...
This paper contributes to the literature on the effects of companies’ current innovation capability on cross-border M&A initiation decisions by providing empirical evidence from China. Based on M&A motivation theories, we construct a uniquely combined dataset of 186 Chinese manufacturing companies that initiated cross-border M&As from 2012 to 2017, of which 158 and 43 companies initiated M&As in developed and “Belt and Road” countries, respectively. The research conclusions suggest a positive correlation between acquiring companies’ current innovation capability and cross-border M&A initiation decisions. More concretely, current innovation capability significantly and positively affects companies’ M&A initiation decisions in developed countries; however, there is a negative or insignificant relationship between current innovation capability and companies’ M&A initiation decisions in “Belt and Road” countries. Moreover, Chinese companies’ M&A initiation decisions in developed countries follow the business cycle, while in countries along the “Belt and Road”, this is not the case. This study also verifies that the research on innovation performance brought about by M&As is not spurious.
... Resource complementarity: Cooperation to achieve relatively complementary resource demand is the most stable state of cooperation. Once this demand is weakened, the partnership will no longer be stable [5]. Game theory: The essence of cooperation in the game process: the stability of the alliance between multiple agents depends on the equivalence of the information obtained. ...
The military-civilian collaborative innovation is an implementation path for most countries to develop strategic emerging industries. The satellite industry is an important area in strategic emerging industries. Based on the evolutionary game theory, we build an evolutionary game model of China’s satellite industry military-civilian collaborative innovation with military enterprises and civil enterprises as the main participators under the bounded rationality. Then we analyze the long-term evolution of the system and the factors influencing cooperative stability and perform numerical simulation using Matlab. Our research shows that the cooperative stability of China’s satellite industry military-civilian collaborative innovation is positively related to the cooperation revenue, liquidated damages, and government incentives and negatively related to basic income, R&D costs, information communication costs, technology secondary conversion costs, risk costs, and betrayal income. The reasonable income distribution coefficient is conducive to the cooperative stability, and we give a primary standard for government incentives. Finally, corresponding management implications are put forward.
Purpose
This study aims to establish a robust evaluation framework for suppliers within the automotive supply chain, specifically in the stamping sector. The primary objectives are to elucidate the performance criteria of suppliers, identify indicators and scales for measuring these criteria and find the importance of the criteria.
Design/methodology/approach
The evaluation framework comprises a criteria hierarchy and indicators developed based on the evaluation criteria of major automotive manufacturers. Specific indicators and measurement scales are recommended for assessing suppliers. Importance weights for the criteria are assigned based on the input of nine experts using the Analytic Hierarchy Process (AHP). Finally, four sheet metal stamping tooling (SMST) suppliers are evaluated by four specialists using the proposed evaluation framework.
Findings
The study introduces a novel classification of criteria, encompassing financial and commercial perspectives, delivery capability, supplier facility and cultural approaches and business process necessities. The findings underscore the significance of financial and commercial stability in the selection of SMST suppliers, emphasizing their role in mitigating risks associated with disruptions, bankruptcies and unforeseen events. Additionally, several SMST evaluation factors identified in this study contribute to the development of resilience capabilities, highlighting the crucial importance of their inclusion and assessment in the proposed evaluation framework.
Originality/value
This research presents a comprehensive model for evaluating SMST suppliers, which tackles the multidisciplinary challenges within the automotive supply chain. Given the inadequacy or nonexistence of current SMTS selection models, this study bridges the gap by exploring potential and necessary criteria, alongside 116 specific indicators and measurement scales.
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.
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.
Purpose
The purpose of the paper is to examine the coevolutionary dynamics between multistage overseas mergers and acquisitions (M&A) integration and knowledge network reconfiguration and the impact of this coevolution on industrial technology innovation.
Design/methodology/approach
This paper builds a coevolution analysis framework in stages and constructs structural equation models for empirical tests using the Chinese technology-sourcing overseas M&A events that occurred from 2001 to 2012.
Findings
Overseas M&A integration and knowledge network reconfiguration are in a coevolutionary relationship, driving industrial technology innovation. The acquirer adopts initial integration degree that matches the resource relatedness between the acquiring and acquired parties, promoting initial industrial technology innovation through initial knowledge network reconfiguration. Initial knowledge network reconfiguration will feed back to the M&A integration decision in the mid-to-late stage through increasing knowledge similarity and narrowing network position difference. The higher the improvement of mid-to-late integration degree, the more it can drive mid-to-late industrial technology innovation through mid-to-late knowledge network reconfiguration.
Research limitations/implications
Future research can accurately classify overseas M&A integration stages through case tracking and explore other network attributes.
Practical implications
Practical guidelines are provided for managers on how to implement a multistage overseas M&A integration strategy, optimize knowledge network reconfiguration and promote industrial technology innovation. Significant practical implications are presented, especially in academia, society and quality of life.
Originality/value
Different from the previous research considering M&A integration as a single-stage decision, this paper emphasizes the dynamics of the M&A integration process and explores the coevolution mechanism of multistage overseas M&A integration and knowledge network reconfiguration.
