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Evolving communication patterns in response to an acquisition event
Abstract
This study uses network data of worker behavior to analyze changes in worker communication patterns during the first three years post-acquisition. The findings suggest that new communication routines develop slowly and are not entirely enduring even when a transformative event, such as an acquisition, occurs. Communication across firms initially increases as workers change their routines. However, over time this communication peaks and then falls as workers develop common ground. Communication across firms was greater when workers' tasks were interdependent. Overall, this study demonstrates that communication routines persist even after an organizationally transforming event. It illustrates the importance of both the formal and informal organization as well as the promise of using social network methods and communication log data to study social phenomena of strategic interest. Copyright © 2011 John Wiley & Sons, Ltd.
... Recognizing the importance of structural and sociocultural integration, organizations going through M&As often appoint employees with cross-organizational responsibilities to stimulate knowledge transfer and mutual understanding (Drori, Wrzesniewski, & Ellis, 2013;Graebner, 2004;Teerikangas, Véry, & Pisano, 2011). Research on post-merger network reconfiguration also shows that employees will slowly but steadily informally reach out to coworkers from the other legacy organization for information, advice, and support (Allatta & Singh, 2011;Mirc & Parker, 2020). Cross-legacy boundary spanners are those employees who develop and maintain formal and informal relationships with new colleagues from the counterpart legacy organization (Allatta & Singh, 2011;Briscoe & Tsai, 2011). ...
... Research on post-merger network reconfiguration also shows that employees will slowly but steadily informally reach out to coworkers from the other legacy organization for information, advice, and support (Allatta & Singh, 2011;Mirc & Parker, 2020). Cross-legacy boundary spanners are those employees who develop and maintain formal and informal relationships with new colleagues from the counterpart legacy organization (Allatta & Singh, 2011;Briscoe & Tsai, 2011). According to the social network literature, employees who span boundaries benefit from timely access to heterogeneous knowledge and information as well as social influence to initiate strategic change (Burt, 1992(Burt, , 2004. ...
... The boundary between two merging legacy organizations plays a central role in the post-merger integration process (Drori et al., 2013). Cross-legacy boundary spanners are employees who develop and maintain relationships with new colleagues from the counterpart legacy organization (Allatta & Singh, 2011;Briscoe & Tsai, 2011). Whether an employee develops cross-legacy ties depends on two factors. ...
Scholars typically view cross-legacy boundary spanners – employees who develop and maintain social relationships with coworkers from both legacy organizations – as the key integrators in mergers and acquisitions (M&As). Organizations even formally appoint employees with cross-legacy responsibilities to support the post-merger integration process. Recent research has started to emphasize, however, how difficult it can be to reap the benefits of a boundary-spanning position. Building and maintaining formal or informal boundary-spanning ties is costly because it requires time, attention, and political savviness. To better understand the perks and pitfalls of cross-legacy boundary-spanning, the authors identify and describe its structural and sociocultural dimensions and explain how they influence cross-legacy boundary-spanning in M&A contexts. The authors argue that the two dimensions can be seen as boundary conditions to the positive relationship between cross-legacy boundary spanning and post-merger integration. This chapter highlights the potential dark side of cross-legacy boundary-spanning and proposes a multi-dimensional model to explain how cross-legacy boundary spanners can avoid the pitfalls and promote the perks of their position in support of successful post-merger integration.
... The purpose of this study is to investigate post merger integration in a public organisation. Previous studies on post merger integration emphasise task integration and human integration (Birkinshaw and Bresman, 2000), communication (Dooley and Zimmerman, 2003;Epstein, 2004;Allatta and Singh, 2011), trust and collective success (Bijlsma-Frankema, 2001) and organisational identification (Elstak et al., 2015). Adopting an appreciative approach, this study will focus on the human integration in a post merger situation, which has gained much less attention in the literature than the financial and legal aspects of the merger (Lawlor, 2013;Buono, 2003;Cartwright and Schoenberg, 2006). ...
... Often attention to communication tools or effort in activating knowledge and information sharing is not enough. Allatta and Singh (2011) found that communication increased between the merged organisations when there was interdependency of tasks. They studied the routines and communication in a post merger situation, and found that the communication patterns evolved slowly during the integration and reached the highest level after two years of the merging [Allatta andSingh, (2011), p.1116]. ...
... Allatta and Singh (2011) found that communication increased between the merged organisations when there was interdependency of tasks. They studied the routines and communication in a post merger situation, and found that the communication patterns evolved slowly during the integration and reached the highest level after two years of the merging [Allatta andSingh, (2011), p.1116]. Similarly, Teerikangas (2008, p.75) suggests that shared projects and processes are ways to increase exchange of ideas and learning between colleagues. ...
The purpose of the study is to show how the appreciative approach can be applied to support post merger management. Appreciative Intelligence® and appreciative inquiry approaches were applied in a public organisation which had undergone an integration process where three government units merged into a single operating unit. An appreciative inquiry intervention and two follow-up interviews were conducted in the case organisation. The study contributes to the literature on the management of the post merger integration process by a focus on the human integration and by a focus on the outcomes of positive interaction.
... Multiple studies have observed changes in social network structure and characteristics during the merger implementation process. In a study using email data collected numerous times over a three-year period, Allatta and Singh (2011) found that employees' brokerage (the extent to which their network ties connected them to otherwise unconnected others), closeness centrality (the number of ties it would take for the focal employee to connect to all other employees in the network), and reach centrality (the number of other employees that the focal employee can reach within two "steps") initially increased and then dropped over time. They also found that cross-legacy ties (between employees at different premerger firms) initially increased and then dropped over time. ...
... For example, Argyres, Rios, and Silverman (2020) examined patent information to study internal inventors' social relationships while Briscoe and Tsai (2011) used law firm's billing records to uncover coworking relationships between partners after a merger. Social networks researchers might also use company email data to construct employees' networks (e.g., Allatta & Singh, 2011;Srivastava, 2015;Woehler et al., 2021). Email networks are an objective measure of organizational communication ties. ...
... External events, such as mergers and acquisitions, and internal reorganizations can trigger changes in both the composition and structure of networks at the interpersonal level (Woehler et al., 2021). For example, research has found that the density of communication networks between acquiring and target firms following firm acquisition initially increased as employees learned to adjust to one another and developed new routines for coordination; but as employees learned to coordinate with their new colleagues, the density of the overall communication network decreased (Allatta & Singh, 2011). Changes in policies and procedures within the firm, too, can precipitate changes at the network level in interpersonal networks. ...
... The consequence of the permutation method used in MR-QAP, specifically the double semi-partialling method developed by Dekker et al (2007), is that the structure of dependencies among dyads is held fixed (i.e., controlled for). See Allatta and Singh (2011) for an example of a study using MR-QAP to predict amounts of communication between pairs of workers. ...
This paper reviews the growing body of work on network dynamics in organizational research, focusing on a corpus of 187 articles -- both “micro” (i.e., interpersonal) and “macro” (i.e., interorganizational) -- published between 2007 and 2020. We do not see “network dynamics” as a single construct; rather, it is an umbrella term covering a wide territory. In the first phase of our two-phase review, we present a taxonomy that organizes this territory into three categories: network change (i.e., the emergence, evolution, and transformation of network ties and structures); the occurrence of relational events (i.e., modeling the sequence of discrete actions generated by one actor and directed towards one or more other actors); and coevolution (i.e., the process whereby network and actor attributes influence each other over time). Our review highlights differences between network dynamics based on relational states (e.g., a friendship) and relational events (e.g., an email message); examines the drivers and effects of network dynamics; and, in a methodological appendix, clarifies the assumptions, strengths, and weaknesses of different analytical approaches for studying network dynamics. In the second phase of our review, we critically reflect on the findings from the first phase and sketch out a rough agenda for future research, organized in terms of four overarching themes: the interplay between the dynamics of social networks conceived as relational states and relational events; mechanisms underlying network dynamics; outcomes of network dynamics; and the role of cognition.
... Mergers also affect some employees differently than others; some perceive the merger as more personally threatening to their job security than others, which can further contribute to the employee's likelihood of leaving the merging organization (Sung et al., 2017). Forging new social ties during a merger integration enables employees to gather newly relevant information, alleviate uncertainty induced by the merger, and achieve success in roles that might have been altered by the merger (Allatta & Singh, 2011;Briscoe& Tsai, 2011). Our study's main contribution will be to use and build upon network activation theory (Smith et al., 2012) to show that how employees change, or fail to change, their personal network of social ties in response to the merger ultimately affects their subsequent voluntary turnover. ...
... Network activation theory suggests that individuals respond to uncertainty and threat by "widening" or "winnowing" their networks and that this response is determined, in part, by the individual's power and status (O'Connor & Gladstone, 2015;Smith et al., 2012Smith et al., , 2020; those experiencing more power and status widen their network focus, while those with less narrow their focus. A critical network widening response in an M&A context involves employees reaching out to new coworkers in the counterpart legacy organization (i.e., increasing cross-legacy connections; Allatta & Singh, 2011;Briscoe & Tsai, 2011). We argue that employees with more formal power or higher informal status are more likely to widen their networks by developing connections with their new coworkers in the counterpart legacy organization, that doing so increases their access to the information and resources needed to deal with the tumult of the post-merger integration period, and, therefore, makes them more likely to remain with the organization throughout the merger. 1 We also recognize that some employees will experience more threat than others because the merger can generate personal, role-oriented threat in the form of job insecuritythe fear of losing one's job. ...
The upheaval created by a merger can precipitate voluntary employee turnover, causing merging organizations to lose valuable knowledge-based resources and competencies precisely when they are needed most to achieve the merger's integration goals. While prior research has shown that employees' connections to coworkers reduce their likelihood of leaving, we know little about how personal social networks should change to increase the likelihood of staying through the disruptive post-merger integration period. In a pre-post study of social network change, we investigate over 15 million email communications between employees within two large merging consumer goods firms over 2 years. We use insights from network activation theory to posit and find that employees with high formal power (rank) and high informal status (indegree centrality) react to the merger's general uncertainty and threat by developing new social connections in a manner indicative of a network widening response: reaching out and connecting with those in the counterpart legacy organization. We also investigate whether increased personally felt threat in the form of merger-related job insecurity strengthens these relationships, finding it does in the case of high formal power. We also find that employees increasing their cross-legacy social connections is key in reducing those employees' turnover after a merger. Our study suggests that network activation theory can be extended to explain network changes and not simply network cognition. (PsycInfo Database Record (c) 2021 APA, all rights reserved).
... Prior research on communication overwhelmingly focuses on fulfilling employees' information requirements (Allatta & Singh, 2011;Angwin et al., 2016;Bastien, 1987;Schweiger & DeNisi, 1991). While communication of change distributes information on the extent and implications of change, fosters positive employee attitudes, and promotes a sense of belonging (Welch & Jackson, 2007;Zagelmeyer et al., 2018), it also addresses employee uncertainty and ambiguity. ...
... For example, an absence of communication may cause the feeling of threat to the employees (Amiot et al., 2006). The focus of prior research has overwhelmingly been directed towards studying its role in fulfilling employees' information requirements (Allatta & Singh, 2011;Angwin et al., 2016;Bastien, 1987;Schweiger & DeNisi, 1991), contributing to a prevalent assumption that communication has to be open, honest and logical to be able to have a positive effect on employees (e.g. Appelbaum et al., 2007;Davenport & Barrow, 2009). ...
Acquisitions are characterized by complex organization changes that create a great deal of uncertainty for employees and this hinders implementation of planned changes. While research consistently highlights the importance of communication following an acquisition, it offers limited insight on what facilitates employee acceptance of associated changes. Most advice for managers focuses on the need to communicate useful, timely, accurate and sufficient information to address employee concerns. We develop that the effectiveness of communication following an acquisition also depends on perceptions of fairness. We find employee perceptions of the rationale behind decisions fully mediate the impact of the information communicated. This suggests ‘how’ decisions are made and communicated following an acquisition are equally if not more important than ‘what’ is communicated to employees. Our results are based on a mixed method research design that investigates the communication strategies of five acquisitions in India using interviews with acquiring firm managers and surveys of acquired employees.
... Si ces recherches ont permis une meilleure appréhension des facteurs d'influence et du déroulement d'une intégration organisationnelle dans ses grandes lignes, en fin de compte on ne sait que très peu sur la dynamique des relations coopératives la sous-tendant, de la manière dont elles émergent et se développent (Angwin et Vaara, 2005). Deux exceptions sont faites ici par les études menées par Briscoe et Tsai (2011) et Allatta et Singh (2011. Les premiers analysent le développement de collaborations dans un cabinet d'avocats au cours du processus post-acquisition. ...
... Ils observent que les caractéristiques des réseaux personnels pré-acquisition influencent l'apparition de liens interentreprises, mais que le développement de ces liens s'accompagne d'une baisse des liens à l'intérieur des unités rapprochées, limitant ainsi l'intégration organisationnelle. Allatta et Singh (2011) étudient l'évolution des modes de communication entre les employés au cours des trois années postacquisition. Ils observent une croissance forte des communications interentreprises immédiatement l'acquisition, puis leur nette diminution jusqu'à un stade similaire à celui précédant le rapprochement. ...
... Finally, a small number of studies have examined how PMI leads to the reconfiguration of social networks. Allatta and Singh (2011) examined postacquisition e-mail exchanges between pairs of individuals. They found that dyadic communication was initially more frequent within each firm (target and acquirer) than between firms. ...
... Kapoor and Lim (2007) found that acquired firm inventors had significantly lower patenting activity than acquiring firm inventors for the first 2 years after an acquisition, but the two patenting rates converged for the next 3 years. Allatta and Singh (2011) found that communication between acquirer and target personnel increased at a gradual pace, peaking 2 years after deal close and subsequently declining. Stahl and Voigt (2008) found in a meta-analysis that cultural differences between acquired and acquiring firms improved shareholder returns at the time of acquisition announcement, but had a negative effect on shareholder returns several months later. ...
Mergers and acquisitions (M&As) continue to be prevalent despite frequently yielding disappointing outcomes. Postmerger integration plays a critical role in M&A success, yet many questions about M&A implementation remain unanswered. In this article, we review research on postmerger integration, which we organize around strategic integration , sociocultural integration, and experience and learning. We then lay out a research agenda that centers on expanding our understanding of processual dynamics in post-merger integration. We focus on opportunities related to temporality, decision-making, practices and tools, and emotionality.
... Si ces recherches ont permis une meilleure appréhension des facteurs d'influence et du déroulement d'une intégration organisationnelle dans ses grandes lignes, en fin de compte on ne sait que très peu sur la dynamique des relations coopératives la sous-tendant, de la manière dont elles émergent et se développent (Angwin et Vaara, 2005). Deux exceptions sont faites ici par les études menées par Briscoe et Tsai (2011) et Allatta et Singh (2011. Les premiers analysent le développement de collaborations dans un cabinet d'avocats au cours du processus post-acquisition. ...
... Ils observent que les caractéristiques des réseaux personnels pré-acquisition influencent l'apparition de liens interentreprises, mais que le développement de ces liens s'accompagne d'une baisse des liens à l'intérieur des unités rapprochées, limitant ainsi l'intégration organisationnelle. Allatta et Singh (2011) étudient l'évolution des modes de communication entre les employés au cours des trois années postacquisition. Ils observent une croissance forte des communications interentreprises immédiatement l'acquisition, puis leur nette diminution jusqu'à un stade similaire à celui précédant le rapprochement. ...
La recherche étudie la dynamique des relations coopératives dans la phase d’intégration organisationnelle suite à une acquisition d’entreprise. L’analyse longitudinale de l’émergence et de l’évolution de trois types de relations (collaborations, échange de connaissances et liens extraprofessionnels) entre les entreprises rapprochées montre une tendance générale à la croissance et au renforcement des relations coopératives au cours des premières années, mais révèle également une émergence séquentielle selon le type de relation ainsi qu’une logique cyclique au niveau dyadique.
... As people-management issues are considered to be responsible for between one-third and one-half of all failures (Cartwright & Cooper, 1993), the human side has become quite prominent in recent M&A research (Angwin, Mellahi, Gomes, & Peter, 2014;Schuler, Jackson, & Luo, 2003;Stahl et al., 2013;Stahl & Mendenhall, 2005;Weber & Fried, 2011). While the role of management communication during M&As is widely acknowledged (e.g., Allatta & Singh, 2011;Angwin et al., 2014;Bastien, 1987;Davenport & Barrow, 2009;Gomes, Angwin, Weber, & Yedidia Tarba, 2013;Risberg, 1997;Soderberg, 2012;Weber, Tarba, & Sandquist Öberg, 2014), the role of emotions has only recently been identified as a critical element in M&A processes (Clarke & Salleh, 2011;Gunkel, Schlaegel, Rossteutscher, & Wolff, 2015;Kusstatscher & Cooper, 2005;Sinkovics, Zagelmeyer, & Kusstatscher, 2011). ...
... There is an extensive literature on communication in M&A process, ranging from practitioner-oriented, prescriptive contributions (e.g., Appelbaum et al., 2007) to empirical research (Allatta & Singh, 2011;Angwin et al., 2014;Bastien, 1987;Napier, Simmons, & Stratton, 1989;Papadakis, 2005;Schweiger & Denisi, 1991). Major challenges of M&As for employees are the increased uncertainty and the ambiguity about the development of the organization, as well as the employee's future in the organization, which may be perceived as threatened (Amiot, Terry, & Jimmieson, 2006). ...
News on merger and acquisition (M&A) activities frequently dominate the popular business press. While the announcement of an M&A usually elicits enthusiasm in the business community, it also results in increased levels of uncertainty, stress, and anxiety for employees. Based on a qualitative analysis of four international M&A cases, this paper integrates emotions and communication during mergers and acquisitions in a conceptual framework. We argue that management communication and information flows during all stages of an M&A process represent affective events, which in a cognitive appraisal process trigger positive and negative emotions. These in turn may influence employee attitudes, behaviour, and performance, and ultimately also M&A success. Copyright © 2016 ASAC. Published by John Wiley & Sons, Ltd. La presse économique est fréquemment dominée par des informations portant sur les activités de fusion et d'acquisition (désormais M&A). S'il est vrai que l'annonce d'une M&A suscite de l'enthousiasme dans le monde des affaires, il n'en demeure pas moins qu'elle provoque, chez les employés, des niveaux élevés d'incertitude, de stress et d'anxiété. Dans cet article, nous nous appuyons sur une analyse qualitative de quatre cas internationaux de M&A pour intégrer, dans un cadre conceptuel, les émotions et la communication pendant les fusions et les acquisitions. Nous soutenons que la gestion de la communication et des flots d'information pendant les différentes étapes d'un processus de M&A représentent des évènements affectifs qui, dans un processus d'appréciation cognitive, créent des émotions positives ou négatives. Celles-ci pourraient influencer, à leur tour, les attitudes, les comportements et les rendements des employés, et, en fin de compte, la réussite de la M&A.
... Communications that are designed and tailored in this direction enhances employee's loyalty, commitment and citizenship behaviour (Turner, Biehi, Golochinsky and Black, 2010). It successfully reduce the shock that customers are likely to encounter, which in turn, improve the trust and corporate image of banks (Aguilera and Denker, 2004;Allatta and Singh, 2011). Honest and timely communication, therefore, is a glue that holds banks, bank staff and customer together, especially when such strategic change involves merger and acquisition (Weber, Tarba and Oberg, 2014). ...
Strategic change is an integral part of contemporary business operation. In the
Nigerian banking industry, strategic changes have occurred, which affected
banks in different ways and magnitude. Surviving in such uncertain and
turbulent periods would require careful and systematic implementation of
critical success factors. As such, this study is an attempt to assess critical
success factors and strategic change management in selected deposit money
banks in Uyo, Akwa Ibom State. Two specific objectives were developed for
the study, as well as two research questions and hypotheses. Survey research
design was applied in the course of the study. The population of the study was
454 employees of the studied deposit money banks, while the sample size was
213 respondents as determined using Taro Yamane sample size determination
technique. Structured questionnaire was used in eliciting the required primary
data. A total of 213 copies of the questionnaire was administered, while 208
copies were returned in a useable form. Data analysis was done using Pearson
Product Moment Correlation (PPMC) analysis. Results from the analysis
revealed that the studied variables showed positive and significant relationship
with strategic change management in the selected deposit money banks in Uyo,
Akwa Ibom State. It was concluded that critical success factors have positive
and significant relationship with strategic change management in the studied
deposit money banks in Uyo, Akwa Ibom State. On the evidence of these
findings, it was recommended that top level managers in the studied deposit
money banks should maintain the habit of supporting their employees during
strategic change periods in the banks by giving them the necessary resources that is required to cope with the change; and the outcomes of strategic change
should be communicated to the employees ahead of time regardless of the
effects it will have on them.
... Consequently, we are able to examine the conditions under which new patterns of tie formation are likely to be abandoned. Thus, we propose that, when an organization undergoes downsizing, surviving employees may rely on new routines to establish connections (Allatta & Singh, 2011), extending COR theory, as we empirically examine new patterns of tie formation among survivors during periods of disruption and stabilization. ...
Today’s corporations increasingly use downsizing as a change strategy to improve organizational performance. Although downsizing and employee networks have garnered attention from both scholars and practitioners, few studies have investigated the influence of downsizing on the temporal dynamics of communication networks among surviving employees or how changes in communication patterns in organizations affect performance. To study how downsizing affects layoff survivors—extending Conservation of Resources theory to longitudinal network and employee-performance data, we examine the impact of downsizing on both the behavioral and structural consequences in an organizational network and test whether temporal changes in network members’ out-degree centrality predict how employees who survive a downsizing event perform in their jobs. We find that, during the period immediately following a downsizing event, survivors’ new tie-seeking behavior results in gains in out-degree centrality when compared with out-degree centrality before the event or after organization routines stabilize. Moreover, survivors with lower pre-downsizing out-degree centrality achieve greater gains in out-degree centrality than those with higher out-degree centrality. We find that substantial gains in out-degree centrality are positively related to post-downsizing performance. Efforts to regain out-degree centrality are abandoned during the stabilization period, and changes in out-degree centrality are no longer positively related to post-downsizing performance. Our results demonstrate that dynamic changes in out-degree centrality during disruption and stabilization periods following a downsizing event have differential effects on work-related relationships and performance. We discuss the theoretical and managerial implications of these results and suggest future research directions.
... this suggests developing informal relationships into formal methods to increase knowledge transfer (allatta & singh, 2011; torres de oliveira et al., 2020). top management involvement can help establish formal relationships for work coordination (King et al., 2020) by increasing employees in combining firms (allatta & singh, 2011;Briscoe & tsai, 2011). for example, Cisco is noted for using a buddy system that matches target firm employees with someone in Cisco to aid socialization (mayer & Kenney, 2004). ...
Acquisitions are complex and ambiguous events fraught with information asymmetries emphasizing market failure before an acquisition or organizational failure during integration. While often treated in isolation, market and organization failure are intertwined in acquisitions as integration planning starts before a deal is closed. Effective integration begins with a deep understanding of the target to be able to share assets and knowledge. However, acquiring firms currently have limited solutions to address information asymmetries. Most remedies primarily aim at market failure using due diligence and external advisors, leaving information asymmetry due to organizational failure primarily unattended. The authors develop a typology that leverages informal and formal social ties to address information asymmetries across the acquisition process that jointly considers market and organizational failure. The typology of this study combines existing research to develop how social ties with stakeholders influence acquisitions and can increase their success.
... Communications that are designed and tailored in this direction enhances employee's loyalty, commitment and citizenship behaviour (Turner, Biehi, Golochinsky and Black, 2010). It successfully reduce the shock that customers are likely to encounter, which in turn, improve the trust and corporate image of banks (Aguilera and Denker, 2004;Allatta and Singh, 2011). Honest and timely communication, therefore, is a glue that holds banks, bank staff and customer together, especially when such strategic change involves merger and acquisition (Weber, Tarba and Oberg, 2014). ...
Strategic change is an integral part of contemporary business operation. In the Nigerian banking industry, strategic changes have occurred, which affected banks in different ways and magnitude. Surviving in such uncertain and turbulent periods would require careful and systematic implementation of critical success factors. As such, this study is an attempt to assess critical success factors and strategic change management in selected deposit money banks in Uyo, Akwa Ibom State. Two specific objectives were developed for the study, as well as two research questions and hypotheses. Survey research design was applied in the course of the study. The population of the study was 454 employees of the studied deposit money banks, while the sample size was 213 respondents as determined using Taro Yamane sample size determination technique. Structured questionnaire was used in eliciting the required primary data. A total of 213 copies of the questionnaire was administered, while 208 copies were returned in a useable form. Data analysis was done using Pearson Product Moment Correlation (PPMC) analysis. Results from the analysis revealed that the studied variables showed positive and significant relationship with strategic change management in the selected deposit money banks in Uyo, Akwa Ibom State. It was concluded that critical success factors have positive and significant relationship with strategic change management in the studied deposit money banks in Uyo, Akwa Ibom State. On the evidence of these findings, it was recommended that top level managers in the studied deposit money banks should maintain the habit of supporting their employees during strategic change periods in the banks by giving them the necessary resources that is required to cope with the change; and the outcomes of strategic change should be communicated to the employees ahead of time regardless of the effects it will have on them.
... These as result, may influence employees' state of mind, performance, and ultimately mergers and acquisitions (Zagelmeyer, Sinkovics, Sinkovics, & Kusstatscher, 2018). While management's role in communication during mergers and acquisition is widely recognized (Allatta & Singh, 2011;Risberg, 1997), the role of sentiments has been recognized lately as one of the critical parts in the process of mergers and acquisitions (Clarke & Salleh, 2011;Gunkel et al., 2015;Zagelmeyer et al., 2018). Despite these critical concerns, past investigations have failed to draw consideration to study this relationship from an organizational change perspective and especially from the context of mergers and acquisitions. ...
Mergers and acquisitions have gained huge importance over the years. Despite huge investments, mergers and acquisitions have failed to achieve desired results. The sole purpose of this study is to explore the aftermath of mergers and acquisitions in Pakistan from the employee perspective. Existing literature suggests that there are more failures than successes in mergers and acquisitions, the reason being the poor implementation of such events. Mergers and acquisitions have consequences, and these consequences are subject to the nature and behavior of the individuals. This study was carried out to explore mergers and acquisitions from an employee perspective and what issues they come to face. With the interpretivist approach and qualitative strategy, the phenomenological methodology was implied to understand the issues of the employees from their lived experiences. Interviews were collected with snowball sampling from the employees who have experienced this transformation. For triangulation of the data, focus group discussions were also conducted among the participants. Moreover, the interview transcripts were validated with a member checking approach. After performing axial coding, constant comparison of the collected data was used, and themes and their relations were developed. Results unearthed several issues employees face, some are job-related, and others are personal life issues. In the former category, employees face the problem of job security, lost experience, communication gap, while in the latter they experience a disturbance in their social circles and personality issues such as stress and anxiety. These issues ultimately culminate into a negative influence on their growth.
... Social network analysis software also often produces the normalized betweenness score obtained by dividing betweenness centrality by the maximum possible value, i.e., (n − 1)(n − 2)/2, where n is the number of actors in the network. Marketing and management researchers often resort to using normalized betweenness centrality scores as they ensure across-year comparability and are not sensitive to changes in network sizes (Allatta & Singh, 2011;Hagedoorn & Duysters, 2002;Soh, Mahmood, & Mitchell, 2004). In Fig. 3, the highest betweenness centrality is attributed to A1. A5's betweenness is low but not zero (0.5 versus A1's value of 3.5). ...
In a business-to-business setting, social networks comprise direct and indirect connections between firms that provide access to new information, knowledge, and resources that otherwise may not be available to the firms. Social network analysis (SNA), which refers to studying and mapping social structures through graph theory, has been widely used in many social science fields, including management. The interest in SNA is also growing among marketing scholars. This editorial discusses the main aspects of SNA and provides a step-by-step guide to researchers on how to conduct SNA in marketing, with a particular focus on the interorganizational context. The purpose of this editorial is to encourage social network research within marketing. We introduce key theoretical constructs in SNA, discuss their operationalization, and offer detailed instructions on constructing them using UCINET 6 (a common software package to implement SNA). The practical application of SNA is made on strategic alliance data collected from the Securities Data Company (SDC) Platinum database.
... Each of these research streams intersects acquisitions, yet, there are still few attempts to integrate them within acquisition research. Acquisitions change the internal and external network of relationships (Allatta & Singh, 2011;Ö berg et al., 2007). Still, an integrative and process framework connecting internal and external networks is missing. ...
I apply a cognitive perspective to understand how primary cognitive mechanisms—simplification, elaboration, and interaction—have influenced the way scholars, as individuals and as a community, have queried acquisitions so far. While cognitive mechanisms have played an important role in advancing our grasp of acquisitions, they have also favored the emergence of hidden, taken-for-granted assumptions, eventually resulting in reproducing the same lines of reasoning, applying the same stock of methodological and theoretical approaches, often with a marginal contribution to our understanding of the field. To remedy this state of affairs, I propose a framework that encompasses four strategies and a set of tactics to assist scholars in challenging hidden assumptions, playing with ideas, considering context in acquisitions, and rethinking theoretical frameworks. I contrast established perspectives with novel ones to build a research agenda.
... For our industry knowledge access measure, we followed previous research and created a weighted network variable that captures each individual's network position weighted by both portfolio industry diversification and industry relatedness within each BA's coinvestment network (e.g., Allatta and Singh, 2011;Davis and Mizruchi, 1999;Gulati, 1999). We created this measure in two steps. ...
This paper investigates the performance effects of business angel portfolio industry diversification. Using a unique bi-annual panel dataset of 142 members of a professional angel investment platform and their portfolio returns between 2013 and 2017, we consider the costs and benefits of diversifying investments into various industries. Drawing upon theoretical arguments about distant search, we theorize and find a nonlinear (S-shaped) relationship between portfolio industry diversification and performance. Further, we pay specific attention to a proposed overdiversification effect that takes place at high levels of portfolio industry diversification and show that this effect is moderated by individuals' access to industry knowledge through their co-investment networks. For business angels who have a central position within a diverse network of industry specialists, the overdiversification effect is less pronounced.
... Finally, after the initial enthusiasm has passed, employees in the acquired firm might fall back into old relation patterns (Tsang, 2008). This phenomenon has also been observed by Allatta and Singh (2011) when studying changing communication patterns after a merger over a three-year time window. Overall, as time passes after an acquisition the desire for ties by individuals in the acquired firm will decrease. ...
In this study we develop a model to explain the dynamics of advice seeking after an acquisition. We build on a theory of advice seeking that draws from prospect theory and expectancy theory. We theorize that immediately after an acquisition there is uncertainty about who knows what, but over time individuals become more aware of the expertise within the organization and they change their advice networks based upon this increased awareness. Our model examines four micro-processes of advice seeking: reciprocity, preferential attachment, transitivity, and legacy-firm tie preferences. To test our hypotheses we use post-acquisition data over four time periods in a recruitment consulting firm. Our longitudinal analysis uses a stochastic actor-orientated model and our results indicate that immediately after the acquisition individuals have a tendency to seek advice based upon reciprocity and preferential attachment. However, over time these tendencies diminish. Surprisingly, transitivity does not play a significant role, which suggests that other micro-processes such as reciprocity are dominant. In addition, individuals in the acquired firm have a tendency to make more ties and there is a preference for same firm ties in both legacy firms, with the tendency being higher in the acquired firm. Our findings add to theories on the process of advice seeking under conditions of uncertainty, on knowledge transfer processes in mergers and acquisitions, and the knowledge based view of the firm.
... Communication is another essential but often overlooked factor that enhances M&A success. Scholars are united that effective organizational communication during and post-M&A reduces uncertainty and increases all stakeholders' commitment to the success of the deal (Aguilera & Dencker, 2004;Allatta & Singh, 2011). Papadakis (2005) investigated the factors that influence the success of M&A and found that communication and the formalization of the decision-making process were central to M&A success. ...
Mergers and acquisitions have continued to serve as a primary
financing tool undertaken by organizations to achieve corporate objectives.
Despite the increased popularity of the mergers and acquisitions phenomenon,
determining acceptable metrics for identifying successful mergers and
acquisitions continue to pose challenges to investors, financial analysts and
other stakeholders involved with mergers and acquisitions. Mergers and
acquisitions activities have presented mixed outcomes to different
organizations with high failure rates recorded in some and less-significant
successes reported in others. Consequently, understanding acceptable metrics
for determining a successful merger or acquisition becomes paramount given
the challenges experienced by players in that industry. Therefore, a thorough
review of the literature is made in this study to identify factors that improve
the chances of mergers and acquisitions success. The unique features of
successful and unsuccessful mergers and acquisitions are itemized to provide
a premise for assessing and evaluating the essential characteristics that make
mergers and acquisitions successful. The importance of due diligence, low
acquisition purchase premiums, and related business acquisitions in the
mergers and acquisitions process were fully explicated. Low acquisition
purchase premiums, timing of mergers and acquisitions and related business
acquisitions were found to tremendously enhance the success of mergers and
acquisitions.
... GEN in Figure 2 also exhibits an inverted S-shaped curve as endogenous uncertainty is inversely related to technology diffusion and the product/industry life cycle (Allatta and Singh, 2011;Kalish, 1985). GEN stems from making preemptive investments in nascent markets that unlock potential future investments (Trigeorgis, 1993b) through learning curve advantages and opportunities to influence the resolution of uncertainty. ...
We develop a real options model of market entry that focuses on the dueling growth and deferral options by differentiating between endogenous uncertainty and exogenous uncertainty. While exogenous uncertainty influences the growth option market value or price, it is endogenous uncertainty that influences the value of the growth option through the ability to create a competitive advantage from preemptive market entry. First, the firm can decrease the exercise price of the growth option (i.e., the cost of the follow-on investment)through experiential learning that reduces endogenous uncertainty. Second, the firm can increase the relative discounted cash flows of the follow-on investment due to its ability to influence market demand that reduces endogenous uncertainty. On the other hand, the value of the deferral option increases with exogenous uncertainty as firms cannot influence exogenous uncertainty, and therefore, should invest elsewhere while waiting for the exogenous uncertainty to subside. As such, we provide a solution to the conundrum that the value of both the growth option and the deferral option increase with uncertainty. Finally, we demonstrate how the model addresses sequential market entry; irreversibility and market entry mode; competition; scarce strategic resources; host country development level; and industry life cycle stage.
... M&As may also profoundly change the way of virtual work, which may impact the related emotions (Sieben, 2007). However, recent research suggests that new communication routines develop slowly and may not be enduring, and that post-M&A employees still communicate more within their original firms than they did across the firms (Allatta & Singh, 2011). ...
In this chapter, we focus on virtual teams and emotions during postmerger and acquisition (M&A) integration. Our main research question is “How to manage emotions and virtual teams following cross-border M&A?”. We answer this question through the following research subquestions: (1) What virtual interaction can be identified post-M&A?; (2) What emotions arises from virtual communication; and (3) What emotions and challenges do virtual teams encounter following cross-border M&As? This research is based on a single case study. The main findings imply that emotions, trust, and cultural differences play an important role in virtual interaction following a cross-border M&A.
... While selective intervention is a difficult construct to operationalize, tracing the communication between the target and acquirer could be an effective method to quantify the amount of intervention occurring (cf. Allatta and Singh, 2011). Opportunities abound to investigate similar relative absorptive capacity effects on other interorganizational phenomena such as alliances. ...
Technological acquisitions have become a popular complement to internal innovation in order to overcome the time-compression diseconomies of internal innovation. As such, acquisition success greatly depends on the expeditious leveraging of target knowledge. Confounding our understanding of leveraging target knowledge is that targets play two distinct innovative roles post-acquisition: conduct innovative activities in conjunction with acquirers (integrative innovation) and continue innovative activities independent of acquirers (independent innovation). To understand how factors differentially affect these two types of innovation, I connect two disparate concepts: relative absorptive capacity and selective intervention. I develop theory and find evidence that while relative absorptive capacity creates the communication capabilities that accelerate integrative innovation, it simultaneously deteriorates the information asymmetries between targets and acquirers leading to greater opportunities for acquirer intervention into target innovative activities that delay independent innovation.
... Furthermore, the paper demonstrates the usefulness of the network concept for exploring inventor choices in the context of the likely abilities and motivations different inventors in different positons have. In this context, the paper speaks to a body of work set to understand organization level outcomes on the basis of understanding network positons and their particular affordances (e.g., Grigoriou and Rothaermel, 2014;Lazega et al., 2006;Nerkar and Paruchuri, 2005;Reinholt et al., 2011) and brings these ideas to furthering our understanding of post-merger knowledge recombination choices (e.g., Allatta and Singh, 2011;Paruchuri and Eisenman, 2012). ...
We study firms’ abilities to increase the generative appropriability of their knowledge by studying the knowledge recombination patterns of inventors in the context of a merger between two equally sized pharmaceutical firms. Specifically, we study inventors’ choices to recombine knowledge originating in the firm with which they merge. We hypothesize that mergers focus inventors’ attention to units of knowledge originating in the other firm and that therefore, inventors will choose to recombine more of this knowledge, which exists in their intra-firm network, following a merger. We also hypothesize that inventors vary in terms of their recombination choices following a merger. We explore these differences by linking inventors’ network positions with their abilities and motivations to recombine knowledge originating in the other firm. Specifically, we hypothesize an inverted-U shaped relationship between centrality and knowledge recombination from the other firm and a linear relationship between brokerage and knowledge recombination from the other firm. We test our hypotheses using patent data from the merger between Bristol-Myers and Squibb and find support for our hypotheses. The paper contributes to knowledge recombination research by exploring changes in knowledge recombination dynamics following a merger and by understanding how mergers affect firms’ generative research trajectories. Practically, we suggest that managers should identify and nurture certain types of inventors following a merger to be able to better leverage the knowledge bases of merging firms.
... Similarly to what other scholars have done (Klendauer and Deller, 2009;Luo, 2007), we combine interpersonal and informational justices, referring to it as interactional justice. This seems to be adequate because interactional justice refers to the feeling of being treated with respect and dignity during interactions with managers from the other company (Bies, 1986;Luo, 2005;Mikula et al., 1990), thus requiring good communication between the parties (Aguilera and Dencker, 2004;Allatta and Singh, 2011;Risberg, 1997). Ellis et al. (2009) highlight the need for communication throughout the organisational hierarchy in order to sustain corporate success. ...
Purpose
Although there is substantial and accumulating evidence on the link between market entry modes and performance, evidence regarding their impact on employee perceptions and thereby their commitment is scarce. This is more so in mergers and acquisitions (M&As) where employee commitment has a significant impact on post entry performance. This study examines the association between perceptions of justice and organizational commitment in cross-border M&As.
Design/methodology/approach
We draw on market entry and M&As literatures and studies on the link between perception of justices and commitment to develop our hypotheses. We test the hypotheses with survey data from a merger of two culturally different partners – British and Japanese. A total of 128 responses were received, out of a sample of 151 non-managerial employees within the firm.
Findings
Our results show that a strong association between employees perceptions of justice during the merger and commitment to the new organisation. Surprisingly, the results do not support the widely reported interaction effects between different organizational justices and employees’ commitment.
Research limitations/implications
Obtaining data from a single M&A is a potential limitation of this study.
Practical implications
The study underscores the importance of post market entry. Our results suggest that particular attention needs to be paid to the way employees of the acquired firm are treated during their interactions with their counterparts.
Originality/value
The link between market entry and performance is well documented. However, little progress has been made in understanding the antecedents/factors that influence commitment in foreign market entry and in particular cross-border M&As. This study helps close this gap.
... Employees from the nested target may leave to secure more stable jobs due to the uncertainty and ambiguity associated with multiple ongoing integration processes in the nested targets, focal target, and focal acquirer. Research suggests that knowledge losses are best prevented by extensive bilateral communication between the managers and key employees of the firms involved (Allatta & Singh, 2011;Chesbrough & Teece, 1996;Ranft & Lord, 2000). In nested acquisitions, this would involve significant multilateral communication among the focal acquirer, focal target, and nested targets to minimize the potential knowledge losses. ...
We highlight a largely unstudied phenomenon that affects postacquisition performance: nested acquisitions. Nested acquisitions occur when a firm acquires a target firm that has itself recently acquired another firm. In our study of publicly traded U.S. acquirers and targets from 2000 to 2014, we theorize that nested acquirers face unique integration difficulties that reduce acquirer postacquisition performance. Specifically, we build on Penrosian logic and theorize that nested acquisitions tax the managerial capacity of the acquiring and acquired firms more than nonnested ones and that, as nested acquisition complexity increases due to variance within the embedded nested targets (i.e., greater number, more recent, less related, and larger nested targets), the drain on managerial capacity also increases. Ultimately, these challenges increase the likelihood of reduced postacquisition performance. Given these suggested difficulties, we theorize that retaining focal target managers can aid the acquiring firm and thereby help to reduce negative performance outcomes. In our unique sample of matched-pair firms, we find that nested acquisitions are associated with lower postacquisition performance but that retaining target firm managers can reduce this effect.
... Finally, the post-acquisition integration process is found to be dynamic. Allatta and Singh (2011) show that communication across firms initially increases as workers change their routines; however, over time this communication peaks and then falls as workers develop common ground. Furthermore, procedural justice and informational justice (Ellis, Reus, & Lamont, 2009) in post-acquisition process are found to affect post-acquisition performance. ...
In recent years, an increasing number of Chinese firms have been engaged in acquisitions both inside and outside of China. Nevertheless, our understanding of Chinese merger and acquisition (M&A) activity is limited because a majority of M&As in the past 100 years have been performed by firms from developed countries and it is those M&As that have been the focus of prior research. Thus this paper aims to address the following research questions: What are the new insights gained from Chinese M&A research? What are the emerging future directions of Chinese M&A research? To address those questions, this article provides a thorough literature review of the most recent M&A research in top journals and studies of M&As both inside and outside of China. Consequently, we identify both new insights from Chinese M&A research and the research gaps that Chinese M&A research needs to fulfill compared with general M&A research in top journals. We further highlight the important and unique characteristics of Chinese M&As and call for future research.
... In few papers, Ariño and Ring (2010) demonstrate that fairness considerations play an essential task in international joint ventures. Allatta and Singh (2011) examine changes in worker communication networks between acquirer and target firm employees during post-acquisition integration and report that target firm workers' positions within their contacts are moving slowly to change. ...
The paper develops a new strategy framework in the enterprise development, especially associated with loss-making firms. A legitimate growth model, contractual buyout is a 'collective ownership and joint administrative policy' in the market for corporate control and also provides an option to buy target firm in a given contract between acquirer, target firm and financier. It posits alike to socio-culture trend 'dating before marriage'. The strategy is further described as takeover defensive method, tax benefit scheme, foreign market entry mode and post-merger integration approach. The model is precisely discussed in various taxonomies, such as motivations, foundations, illustrations, guidelines and implications. It eventually recommends capitalists and multinational enterprises to choose CoBO as a potential entry mode to avail creative business openings in the world economy.
... Several measures can serve as a proxy for the degree of communication density between organizations. These measures include the extent of information exchange between organizations (for example, through e-mail; see Allatta and Singh, 2011), the number of meetings between the members of collaborating organizations, and the position of an organization in the field's communication network (Knoke, 2004). Taken together, these measures may serve as proxies for collaborative complexity, which could be further assessed by means of network analysis (Scott, 2000). ...
Organizations have to cope with the complexity of their environment in order to survive. A considerable body of research has shown that organizations may respond to environmental complexity by creating internal complexity – for example, by expanding internal structures and processes. However, researchers know less about how organizations create collaborative complexity collectively – for example, by establishing alliances or developing common standards. This paper uses social systems theory to explore how organizations collaborate in response to complexity and to analyse the conditions under which they create either internal or collaborative complexity (or both) to address environmental complexity. It also examines how these types of complexity feed back into environmental complexity. To illustrate our conceptual model, we use corporate social responsibility (CSR). This article is protected by copyright. All rights reserved.
... Interestingly, Saorín-Iborra (2008) reached the conclusion that the time pressure perceived by negotiation parties during acquisition negotiations impacts the communication between them (Saorín-Iborra, 2008). Another recent study using interaction data from employee communication logs found out the communication patterns across firms develop slowly, and communication routines persist even in an acquisition event (Allatta & Singh, 2011). In our current study, the intended integration approach is ''absorption acquisition'', where there is a relatively high need for interdependence between the firms to transfer capabilities and low need for autonomy between firms to preserve the boundaries (Haspeslagh & Jemison, 1991). ...
Research on emotions during different phases of the merger and acquisition (M&A) process (i.e., pre‐M&A, during M&A and post‐M&A) has increased exponentially over the past three decades. However, few attempts have been made to integrate the findings. By systematically reviewing research on emotions during M&As published over the past 30 years, this paper aims to contribute to filling this gap. We organized our findings using a process framework, addressing emotional triggers, the nature of emotions and their dynamics, effects and management. Our review reveals several oversights in research on emotions during M&As, such as the emotional dynamics between the different M&A phases and the role of positive emotions. To address these oversights, future research is encouraged to (a) study emotions following a process‐oriented perspective on M&As and include the (interrelationships between) different M&A phases, (b) address the emergence of emotional heterogeneity and homogeneity among organizational members during these phases, (c) investigate the widespread effects of positive emotions and take into account various levels of emotion and (d) explore how emotions can be successfully managed. The paper concludes with a discussion of how these research directions can advance research on emotions during the M&A process.
This paper investigates dynamic changes in instrumental (i.e., work‐related) tie‐seeking patterns and the structure of a communication network following a downsizing event—whereby many employees are simultaneously eliminated from a network. Our analysis spans a two‐year period and applies a resource‐ and network‐change approach to examine how survivors develop revised resource‐acquisition strategies while repositioning themselves after a downsizing. Our results demonstrate that two temporary logics of tie formation—a suspension of within‐unit homophily and a preference for seeking ties with long‐tenured employees—help employees acquire betweenness centrality during the disruption period. Specifically, we find that disruption initiates a transitional period after downsizing in which new tie‐making logics are employed, including seeking out ties with long‐tenured employees and employees outside of one's department. We observed post‐disruption, during the stabilization period after downsizing, where logics used for tie‐making in the disruption period were abandoned, pre‐disruption tie‐making logics were resumed, and betweenness centrality remained relatively constant. We discuss the theoretical and managerial implications of these results and suggest future research directions.
Introduction
New ways of structuring, adoption of new technology, and reshaping the role and responsibility in the banking operation have impacted the working conditions as well as the daily lives of bank employees. Acculturation is an emerging concept that may influence the short and long-term success or failure of any organization. Acculturation is firmly connected to Mergers & Acquisitions (M&A) performance because it affects the banking sector’s business value and should be addressed after the merger.
Methods
The current study is an attempt to examine the association between newcomer employee behavior and the performance of M&A process as well as the mediating effect of acculturation in this relationship. The sample size constitutes 303 newcomers banking employees who have joined the four acquired public sector banks after the mega-merger of six public sector undertaking banks on 1 st April 2020. The research paper used CFA to examine the constructs' reliability and validity, and it also utilized PLS-SEM to test the research hypotheses.
Results
According to the statistical findings, new employee behavior and mergers and acquisitions performance were found to be significantly related at p-value < 0.001. Subsequently, acculturation mediates the relationship between newly joined employee conduct and large M&A performance.
Conclusion
When a firm goes through the mergers and acquisitions process, they learn that cultural indigestion is a critical issue that influences employee behavior during the M&A process, which is often overlooked by senior management. The study finds out the post-merger problems and failures in the banking industry as a result of organizational culture differences.
Purpose
The purpose of this study is to establish, drawing upon the indirect effects of customer reactance from an emerging economy perspective, the marketing implications of policy induced Mergers and Acquisitions (M&A) in Financial Services.
Design/methodology/approach
The study employed a quantitative research approach, relying on data from 517 customers of M&A banks in Ghana. Purposive sampling technique was used in selecting respondents for the study. Hypotheses were tested using a structural equation modelling.
Findings
A positive and significant relationship between immersive marketing communication and consumer intention is revealed in the study. The presence of consumer reactance highly influenced the relationship. As a public policy tool, forced mergers and acquisitions was found to increase customer reactance. However, when customers are frequently engaged with relevant and consistent marketing communications through appropriate channels, such reactance would only be partial.
Research limitations/implications
Although some of the information were collected, they were not the main focus of our analysis. We acknowledge, from the sample demographics perspective, the study did not consider certain other confounding factors that could influence customers' decisions to remain or switch such as customers' level of banking, type of account, income level, banking experiences in relation to service fees, online banking etc., as these could also potentially influence customers' reactance. Perhaps these may have to be considered in future studies.
Social implications
When timely and relevant marketing communications are targeted at the customers who are directly impacted by the M&A process, they would experience reactance, but only partially. This has a range of marketing implications for policy-induced M&A and its impact on consumer intention, reactance and attitudes towards the new entity.
Originality/value
The marketing of financial services literature has been silent on the implications of M&A from a policy induced perspective. This study, therefore, contributes to theory by highlighting that the “destruction” of brand value of the affected firms is relatively high in a policy induced M&A and thus increases the level of customer reactance. This is because a regulator enforced M&A, as public policy, usually generates high public interest and public discourse, leading to a heightened customer reactance. However, when immersive marketing communications are targeted at the customers directly impacted by the M&A, they would experience reactance, but only partially.
Internationale Mergers of Equals verändern ganze Branchen und Regionen, erhalten allein aufgrund ihres Volumens erhebliche Aufmerksamkeit und laufen häufig auf eine Übernahme hinaus. Das kann den Blick dafür verstellen, dass auch durch die weniger geräuschvollen, aber zahlreichen Akquisitionen und Kooperationen ganze Branchen und Regionen verändert werden.
Die Analyse von Mergers of Equals sollte sich nicht nur auf die rechtli- chen Strukturen, sondern auch auf die tatsächlichen Leitungs- und Macht- strukturen im Kontext des breiteren Feldes der Motive und Hindernisse von Mergers and Acquisitions konzentrieren. Dabei zeigt sich, dass nach der aktu- ellen, internationalen Fachliteratur der strategische und organisatorische Fit sowie die Fragen der Personalführung nicht erst in der Integrationsphase auf die Tagesordnung kommen sollten. Anders ausgedrückt: Das Thema Post- Merger-Integration gehört bereits in das Due-Diligence-Verfahren.
Daher ist es auch betriebswirtschaftlich folgerichtig, wenn Arbeitnehmer eine Festschreibung der menschlichen Rahmenbedingungen bereits vor dem Deal fordern. Besondere Herausforderungen treten bei transatlantischen Unternehmenszusammenschlüssen auf.
Chinese cross-border mergers and acquisitions (M&As) display several unique properties in relation to the ways in which their international business operations are organised and managed. Their seemingly puzzling ‘light-touch’ integration approach can be significantly understood from a strategic ambidexterity perspective: on the one hand, the ‘light-touch’ enables the exploitation of the targets’ existing knowledge bases; on the other hand, elements of the ‘light-touch’ facilitate the exploration of the new knowledge arising from the collaboration between targets and acquirers. However, an important theoretical gap remains: why do Chinese companies deploy such a strategic ambidexterity approach in their post-acquisition integrations? This paper aims to fill this gap by proposing Mid-View thinking as a micro-foundation of strategic ambidexterity in integration management from a cultural and philosophical perspective. To illuminate our conceptualization and argument, we conducted qualitative in-depth interviews with CEOs/high-level managers of acquired German companies. Communication approach and organizational control—as two critical aspects in integration management—reveal how Mid-View thinking can serve as a micro-foundation of strategic ambidexterity. We conclude this paper by presenting its theoretical contributions, managerial implications, and future research directions.
The process of identifying and evaluating a target firm, completing a deal after its negotiation and announcement, and then integrating a target firm after legal combination is a multi-year process with uncertain returns to acquiring firms. Research on mergers and acquisitions (M&As) is progressing rapidly yet remains fragmented across multiple research perspectives that largely examine different acquisition phases separately that coincide with a focus on different research variables. As a result, research fragmentation means that a researcher in one area may be unaware of research from related areas
that is likely relevant. This contributes to research silos with M&A research displaying different traditions, starting points, and assumptions. Mergers and Acquisitions: A Research Overview summarizes the frontier in M&A research and provides insights into where it can be expanded. It undertakes the needed integration and reconciliation of research in order to derive practical knowledge for managing acquisitions from beginning to end, providing a summary of what is known and its implications for future research.
This concise overview reconciles and integrates the state of the art in our understanding of mergers and acquisitions, providing an essential first stopping point in the research journey of students and scholars working in this area.
This chapter explores talent identification during the early stages of the merger and acquisition process. Acquiring management teams need to balance the assessment of accurate talent information with decisions that will influence integration planning which may ultimately affect the acquisition outcome. Acquirers may rely on inside information from target executives and as transformational change events, mergers and acquisitions (M&A) creates political arenas that increase the risk of overshadowing talent by poor and biased talent decisions and political manoeuvring. Talent identification is an underexplored area within M&A contexts which run the risk of informal talent identification and subjective decisions. The chapter proposes a framework for future study and identifies the need to extend and re-engineer HR due diligence to include a deeper analysis of expanded talent pools.
The emergence of group constructs is an unfolding process, whereby actions and interactions coalesce into collective psychological states. Implicitly, there is a connection between these states and the underlying procession of events. The manner in which interactions follow one another over time describe a group's behavior, with different temporal patterns being indicative of different team characteristics. In this study, we explicitly connect event sequences to the process of emergence. We argue that the temporal relationship between events in a sequence will vary depending on the team's psychological outcome. Further, certain patterns of behavior will be repeated at different rates in teams with varying emergent states. To support this approach, we apply a statistical methodology—relational event modeling—for analyzing sequences of interactions that builds on the foundation of social network analysis. Using a dataset comprised of 55 work teams of military personnel engaged in a tactical scenario, we found that individuals who perceived team process (regarding coordination and information sharing) as having different qualities engaged in significantly different patterns of behavior. Our findings indicate that individuals who had a positive perception of process quality were more likely to initiate communication events in a reciprocal, transitive, and decentralized fashion.
Mergers and acquisitions (M&A) are a type of corporate restructuring. M&A is the general term describing the consolidation of two companies, a significant change with communication implications. Research in this area spans a variety of disciplines and focuses on five main areas: (1) types of M&A; (2) motivations; (3) process and risks; (4) implications for change management and communication; and (5) key success factors. This entry describes each of these five areas in some detail. It also examines existing gaps in the M&A research and makes recommendations for future research.
The integration of acquired or merging firms is a key driver of the success or failure of mergers and acquisitions (M&As). Over the last 30 years, a substantial body of research has addressed M&A integration, offering rich but widely dispersed insights into this phenomenon. This paper takes stock of the current knowledge, based on a review of articles published in scholarly journals. The review advances the conceptual understanding of the phenomenon by inductively developing an overarching framework for the M&A integration literature, where integration success is a function of context, structural and communication-based interventions, which interact with collective sensemaking processes and negotiations among integration stakeholders. Based on this framework, a research agenda is suggested. I proposes that, in particular, the interaction between structural interventions and leadership warrants further study. Also, little is known about integration project management and integration team composition or the interaction between integration context and collective sensemaking processes. Finally, there is a shortage of research on temporal dynamics within integration projects. The review demonstrates that M&A scholars made substantial progress regarding our understanding of the M&A integration process, yet much remains to be done. © 2016 British Academy of Management and John Wiley & Sons Ltd.
This article examines how uncertain situations of threat or opportunity influence people’s choices to interact with their colleagues in an organization. The threat/opportunity lens encompasses two conceptually distinct dimensions, gain/loss and control/limited control, which are hypothesized to produce different patterns of network interaction. Two experimental studies—one involving 158 leaders in a health-care organization and the other involving 129 employees in a range of smaller establishments—provided support for the proposed conceptualization. The studies found that (1) people chose to interact with more network contacts in situations of loss than in situations of gain, (2) those with an internal locus of control chose to interact with more network contacts in situations of limited control than in situations of control, whereas those with an external locus of control exhibited the opposite response, and (3) the tendency to interact with more network contacts in loss rather than gain was greater for low-ranking actors relative to high-ranking ones. These findings contribute to our understanding of the interplay between individual cognition and organizational social networks.
Contrary to the assumption of relational inertia that is prevalent in much of the research on organizational change, I propose that intraorganizational networks are instead subject to transitory shifts when organizational change produces high levels of ambiguity for employees. I develop a theoretical account of how networks defined by formal, semiformal, and informal organizational structure change in response to heightened ambiguity. I argue that, when ambiguity increases, people will tend to (1) decrease communication with formal network ties that do not have a significant semiformal component, (2) increase communication with semiformal network ties that do not have a significant formal component, and (3) increase communication with informal network ties. Empirical support for these propositions comes from unique data-including 40 weeks of archived email metadata, the full roster of email distribution lists, personnel records, and qualitative interviews-that span the period before, during, and after an ambiguity-producing restructuring at a large information services firm. These findings contribute to research on organizational structure, organizational change, and social capital activation and also have implications for management practice.
Executives of 56 acquiring organizations participated in policy-capturing research that examined how the task, cultural, and political characteristics of acquisitions influence decisions about levels of integration. Although task-related characteristics entered most heavily into managers' decision models, cultural and political factors were also important. These results suggest that an understanding of acquisition integration is best achieved by viewing integration design decisions through multiple theoretical lenses. Furthermore, although industry and acquisition experience explained some variation in integration decision policies, results suggest that other individual or organization-level factors are also at work.
Has the Internet affected the ways in which people communicate by lessening the effects of distance? To examine this question, the authors study scholarly and interpersonal relationships—in person and by e-mail—in two scholarly networks, one in a large university and one dispersed across North America. These scholarly networks are harbingers of the turn toward network and virtual organizations. Although the Internet helps scholars to maintain ties over great distances, physical proximity still matters. Those scholars who see each other often or work near each other e-mail each other more often. Frequent contact on the Internet is a complement to frequent face-to-face contact, not a substitute for it. The more scholarly relations network members have, the more frequently they communicate and the more media they use to communicate. Although e-mail helps scholars without strong ties to stay in contact, it is used most by scholars who are collaborators or friends.
In addition to all the usual ethical problems that can arise with any kind of inquiry, network analyses, by their very nature, introduce special ethical problems that should be recognized. This paper delineates some of these problems, distinguishing between problems that arise in purely academic studies and those that arise in managerial practice settings. In addition, the paper raises the long-term question of whether the use of network analysis for making managerial decisions will make collecting valid network data impossible in the future, seriously harming the academic field of social network research. The paper concludes with a short set of principles intended to form the basis for a set of guidelines designed to safeguard participants in social network studies and protect the long term viability of the network research enterprise.
In this paper, I attempt to advance the concept of embeddedness beyond the level of a programmatic statement by developing a formulation that specifies how embeddedness and network structure affect economic action. On the basis of existing theory and original ethnographies of 23 apparel firms, I develop a systematic scheme that more fully demarcates the unique features, functions, and sources of embeddedness. From this scheme, I derive a set of refutable implications and test their plausibility, using another data set on the network ties of all better dress apparel firms in the New York apparel economy. Results reveal that embeddedness is an exchange system with unique opportunities relative to markets and that firms organized in networks have higher survival chances than do firms which maintain arm's-length market relationships. The positive effect of embeddedness reaches a threshold, however, after which point the positive effect reverses itself.
The purpose of this work is to develop a systematic understanding of embeddedness and organization networks. Drawing on ethnographic fieldwork conducted at 23 entrepreneurial firms, I identify the components of embedded relationships and explicate the devices by which embeddedness shapes organizational and economic outcomes. The findings suggest that embeddedness is a logic of exchange that promotes economies of time, integrative agreements, Pareto improvements in allocative efficiency, and complex adaptation. These positive effects rise up to a threshold, however, after which embeddedness can derail economic performance by making firms vulnerable to exogenous shocks or insulating them from information that exists beyond their network. A framework is proposed that explains how these properties vary with the quality of social ties, the structure of the organization network, and an organization's structural position in the network.
Given assumptions about the characteristics of knowledge and the knowledge requirements of production, the firm is conceptualized as an institution for integrating knowledge. The primary contribution of the paper is in exploring the coordination mechanisms through which firms integrate the specialist knowledge of their members. In contrast to earlier literature, knowledge is viewed as residing within the individual, and the primary role of the organization is knowledge application rather than knowledge creation. The resulting theory has implications for the basis of organizational capability, the principles of organization design (in particular, the analysis of hierarchy and the distribution of decision-making authority), and the determinants of the horizontal and vertical boundaries of the firm. More generally, the knowledge-based approach sheds new light upon current organizational innovations and trends and has far-reaching implications for management practice.
Acquisition integration is a pivotal factor in determining whether the objectives of an acquisition are achieved. In this paper, we hypothesize that the productivity of corporate scientists of acquired companies is generally impaired by integration, but that some scientists experience more disruption than others. In particular, acquisition integration will be most disruptive, leading to the most severe productivity drops, for those inventors who have lost the most social status and centrality in the combined entity. Drawing from prior literatures on the knowledge-based view of the firm, and on mergers and acquisitions, we develop hypotheses about a concise set of conditions that will lead to substantial performance drops for acquired technical personnel. We test our hypotheses, using patent application data, on a sample of 3,933 inventors in pharmaceutical firms whose companies were acquired. Results are strongly in line with our theorized expectations.
This research focuses on creating a theory of the "organizational advantage," a new concept identified within business and management. Using social capital research as a foundation for this theory, three of the study's objectives are identified: 1) incorporate different aspects of social capital to identify three common dimensions; 2) explain the role of each dimension in the process of creating and exchanging knowledge; and 3) maintain the belief that organizations are capable of creating extraordinary amounts of social capital on all three dimensions. Additionally, the relationship between social capital and intellectual capital is explored, as is the impact of this relationship upon a firm's perceived organizational advantage. In order for exchange and combination of resources to occur as a means of creating value, the research identifies three necessary conditions, including the opportunity for exchange and combination to occur, the expectation that exchange and combination generates value, and the motivation that exchange and combination in some way will be productive. This research further identifies a fourth condition, combination capability, as a significant factor in value creation. Due to social capital's influence upon the conditions needed for exchange and combination, social capital aids in the creation of intellectual capital. The research further hypothesizes that a firm's ability to create and utilize social capital contributes to performance differences among firms. Several limitations are identified, including omission of the negative impact of social capital upon a firm and the costs associated with creating and preserving a firm's social capital. The findings of the study are generalized to other institutional situations, and areas for future research are identified. (AKP)
How should we understand why firms exist? A prevailing view has been that they serve to keep in check the transaction costs arising from the self-interested motivations of individuals. We develop in this article the argument that what firms do better than markets is the sharing and transfer of the knowledge of individuals and groups within an organization. This knowledge consists of information (e.g., who knows what) and of know-how (e.g., how to organize a research team). What is central to our argument is that knowledge is held by individuals, but is also expressed in regularities by which members cooperate in a social community (i.e., group, organization, or network). If knowledge is only held at the individual level, then firms could change simply by employee turnover. Because we know that hiring new workers is not equivalent to changing the skills of a firm, an analysis of what firms can do must understand knowledge as embedded in the organizing principles by which people cooperate within organizations.
Based on this discussion, a paradox is identified: efforts by a firm to grow by the replication of its technology enhances the potential for imitation. By considering how firms can deter imitation by innovation, we develop a more dynamic view of how firms create new knowledge. We build up this dynamic perspective by suggesting that firms learn new skills by recombining their current capabilities. Because new ways of cooperating cannot be easily acquired, growth occurs by building on the social relationships that currently exist in a firm. What a firm has done before tends to predict what it can do in the future. In this sense, the cumulative knowledge of the firm provides options to expand in new but uncertain markets in the future.
We discuss at length the example of the make/buy decision and propose several testable hypotheses regarding the boundaries of the firm, without appealing to the notion of “opportunism.”
Centrality measures, or at least popular interpretations of these measures, make implicit assumptions about the manner in which traffic flows through a network. For example, some measures count only geodesic paths, apparently assuming that whatever flows through the network only moves along the shortest possible paths. This paper lays out a typology of network flows based on two dimensions of variation, namely the kinds of trajectories that traffic may follow (geodesics, paths, trails, or walks) and the method of spread (broadcast, serial replication, or transfer). Measures of centrality are then matched to the kinds of flows that they are appropriate for. Simulations are used to examine the relationship between type of flow and the differential importance of nodes with respect to key measurements such as speed of reception of traffic and frequency of receiving traffic. It is shown that the off-the-shelf formulas for centrality measures are fully applicable only for the specific flow processes they are designed for, and that when they are applied to other flow processes they get the “wrong” answer. It is noted that the most commonly used centrality measures are not appropriate for most of the flows we are routinely interested in. A key claim made in this paper is that centrality measures can be regarded as generating expected values for certain kinds of node outcomes (such as speed and frequency of reception) given implicit models of how traffic flows, and that this provides a new and useful way of thinking about centrality.
This paper differs from previous examinations of organizational learning in that it is broader in scope and more evaluative of the literatures. Four constructs related to organizational learning (knowledge acquisition, information distribution, information interpretation, and organizational memory) are articulated, and the literatures related to each are described and critiqued.
The literature on knowledge acquisition is voluminous and multi-faceted, and so the knowledge acquisition construct is portrayed here as consisting of five subconstructs or subprocesses: (1) drawing on knowledge available at the organization's birth, (2) learning from experience, (3) learning by observing other organizations, (4) grafting on to itself components that possess knowledge needed but not possessed by the organization, and (5) noticing or searching for information about the organization's environment and performance. Examination of the related literatures indicates that much has been learned about learning from experience, but also that there is a lack of cumulative work and a lack of integration of work from different research groups. Similarly, much has been learned about organizational search, but there is a lack of conceptual work, and there is a lack of both cumulative work and syntheses with which to create a more mature literature. Congenital learning, vicarious learning, and grafting are information acquisition subprocesses about which relatively little has been learned.
The literature concerning information distribution is rich and mature, but an aspect of information distribution that is central to an organization's benefitting from its learning, namely how units that possess information and units that need this information can find each other quickly and with a high likelihood, is unexplored. Information interpretation, as an organizational process, rather than an individual process, requires empirical work for further advancement. Organizational memory is much in need of systematic investigation, particularly by those whose special concerns are improving organizational learning and decision making.
Established firms sometimes seek to augment their internal R&D by acquiring entrepreneurial firms. Very little is known about the micro-foundations of the knowledge transfer process involved in such “technology grafting” acquisitions, or about the determinants of its success. This research brings together new theory, as well as multiple varieties of empirical analyses to fill these gaps in our understanding. Specifically, the empirical analyses examines archival data on 224 acquisitions of small technology intensive firms by 49 established firms in the information technology manufacturing sector during the time period 1988–1998, in addition to survey and qualitative data on subsets of these transactions. We find that technology-grafting acquisitions may be viewed as attempts to purchase dynamic capabilities; entrepreneurial firms are acquired for the technology underlying specific products, as well as the expertise that enables the production of second and third generation variants of the product. The emphasis is not on transferring a given technology to multiple sites, but on managing the interdependencies between the acquired technology and its new setting. The success of these acquisitions depends on being able to preserve the dynamic capability that is acquired, by maintaining the integrity of the organizational boundaries that define it. This is easier to achieve when the target's technology is autonomous (rather than systemic) with respect to the acquirer. We also find that acquirers seem to make integration choices in a rational manner, as the variation in total performance arises from differences in acquisition experience and stable firm properties, not from integration choices. More narrowly defined measures of performance do exhibit variation with integration choices in predicted manners; greater levels of integration lead to greater integration costs, greater disruption effects, and lower technological performance. Apart from direct contributions to the acquisition management literature, these findings improve our understanding of intra-firm knowledge transfer processes, as well as the strategies of established firms in dealing with externally generated innovations.
Scholars of the theory of the firm have begun to emphasize the sources and conditions of what has been described as “the organizational advantage,” rather than focus on the causes and consequences of market failure. Typically, researchers see such organizational advantage as accruing from the particular capabilities organizations have for creating and sharing knowledge. In this article we seek to contribute to this body of work by developing the following arguments: (1) social capital facilitates the creation of new intellectual capital; (2) organizations, as institutional settings, are conducive to the development of high levels of social capital; and (3) it is because of their more dense social capital that firms, within certain limits, have an advantage over markets in creating and sharing intellectual capital. We present a model that incorporates this overall argument in the form of a series of hypothesized relationships between different dimensions of social capital and the main mechanisms and processes necessary for the creation of intellectual capital.
Champions of virtual corporations urge managers to subcontract anything and everything. And because several high-profile corporate giants have been outperformed by more nimble, "networked" competitors, the idea of the virtual organization is tantalizing. Many executives have come to believe that a company that invests in as little as possible will be more responsive to a changing marketplace and more likely to attain global competitive advantage. But is that really the best way to organize for innovation? In this HBR article from 1996, Henry Chesbrough and David Teece argue that the virtual corporation has been oversold. Innovation is not monolithic. For some innovations, joint ventures, alliances, and out-sourcing can play a useful role. But for others, they are inappropriate-and strategically dangerous. The initial success and subsequent failure of the IBM PC illustrate the strategic mistake of using a virtual approach to develop the kind of complex technology that should be controlled in-house. The authors present a framework to help managers determine when to innovate by going virtual, when to form alliances, and when to rely on internal development. They provide a range of cases to illustrate how to match organizational strategy to the type of innovation being pursued. General Motors, for example, used the wrong approach to develop disc brake technology and got to market later than its competitors. There are benefits to being virtual. But, the authors caution, the popularity of networked companies and decentralization arises, in part, from observations made within a very short time frame. Long-term success requires considerable and sustained investment within a company.
This paper lays the groundwork for new models of work and relations of production that reflect changes in the division of labor and occupational structure of a postindustrial economy. It demonstrates how new ideal-typical occupations can be constructed, drawing on a set of ethnographies to propose an empirically grounded model of technicians' work. The paper focuses on two questions: What do technicians do and what do they know? The answers constitute a first cut at the ideal type, technician. The paper then turns to evidence of the difficulties that arise when organizations employ technicians but fail to appreciate the nature of their work. It closes by showing how a contextually derived model of technicians' work enables us to evaluate why some recent trends in organizing are congruent with an increasingly technical workforce, why others may be misguided, and why organizations are likely to face challenges that organizational theorists have but vaguely anticipated. The paper shows that the emergence of technicians' work may signify a shift to a more horizontal division of substantive expertise that undermines the logic of vertical organizing on which most organizational theory and practice still rests.
Analysis of structural and attitudinal aspects of professionalization, and of the organizational settings in which many professional occupations exist, suggests that there is generally an inverse relationship between professionalization and bureaucratization, although there is considerable variation within the relationship. The data further suggest that the structural and attitudinal aspects of professionalization do not necessarily vary together. The organizations in which professionals work also differ in their degrees of bureaucratization. It is suggested that the presence of professionals in an organization affects the structure of the organization, while at the same time, the organizational structure can affect the professionalization process.
Prologue Part I. Practice: Introduction I 1. Meaning 2. Community 3. Learning 4. Boundary 5. Locality Coda I. Knowing in practice Part II. Identity: Introduction II 6. Identity in practice 7. Participation and non-participation 8. Modes of belonging 9. Identification and negotiability Coda II. Learning communities Conclusion: Introduction III 10. Learning architectures 11. Organizations 12. Education Epilogue.
In this paper, we challenge the traditional understanding of organizational routines as creating inertia in organizations. We adapt Latour's distinction between ostensive and performative to build a theory that explains why routines are a source of change as well as stability. The ostensive aspect of a routine embodies what we typically think of as the structure. The performative aspect embodies the specific actions, by specific people, at specific times and places, that bring the routine to life. We argue that the ostensive aspect enables people to guide, account for, and refer to specific performances of a routine, and the performative aspect creates, maintains, and modifies the ostensive aspect of the routine. We argue that the relationship between ostensive and performative aspects of routines creates an on-going opportunity for variation, selection, and retention of new practices and patterns of action within routines and allows routines to generate a wide range of outcomes, from apparent stability to considerable change. This revised ontology of organizational routines provides a better explanation of empirical findings than existing theories of routines and has implications for a wide range of organizational theories.
In this paper we propose the notions of genre and genre repertoire as analytic tools for investigating the structuring of communicative practices within a community. As organizing structures, genres shape and are shaped by individuals' communicative actions. Our empirical study examined the communication exchanged by a group of distributed knowledge workers in a multiyear, interorganizational project conducted primarily through electronic mail. We found that the genre repertoire of this community revealed a rich and varied array of communicative practices that members shaped and changed in response to community norms, project events, time pressure, and media capabilities. Our analysis establishes the concepts of genre and genre repertoire as a means of understanding communicative action as a central aspect of a community's organizing process.
While the recent focus on knowledge has undoubtedly benefited organizational studies, the literature still presents a sharply contrasting and even contradictory view of knowledge, which at times is described as "sticky" and at other times "leaky." This paper is written on the premise that there is more than a problem with metaphors at issue here, and more than accounts of different types of knowledge (such as "tacit" and "explicit") can readily explain. Rather, these contrary descriptions of knowledge reflect different, partial, and sometimes "balkanized" perspectives from which knowledge and organization are viewed. Taking the community of practice as a unifying unit of analysis for understanding knowledge in the firm, the paper suggests that often too much attention is paid to the idea of community, too little to the implications of practice. Practice, we suggest, creates epistemic differences among the communities within a firm, and the firm's advantage over the market lies in dynamically coordinating the knowledge produced by these communities despite such differences. In making this argument, we argue that analyses of systemic innovation should be extended to embrace all firms in a knowledge economy, not just the classically innovative. This extension will call for a transformation of conventional ideas coordination and of the trade-off between exploration and exploitation.
As new technologies that support managerial communication become widely used, the question of how and why managers, especially senior managers, use them increases in importance. This paper examines how and why managers use electronic mail. Today, one of the more influential theories of media choice in organization and information science is information richness theory, which has stimulated much empirical research on media selection and has clear implications for how managers should use media. Despite numerous modifications and elaborations, information richness theory remains an individual-level rational choice explanation of behavior, and as such it differs fundamentally from theories that emphasize the social context of managers' communication and media choice behavior. While the weight of informed opinion seems to be shifting toward social theories of media selection and use, much empirical research continues to test individual-level rational choice models.
A multi-method investigation was designed to assess the power of information richness theory, relative to alternative social theories, to explain and predict managers' use of email. Managers were found to perceive various media in ways that were relatively consistent with information richness theory, but to use email more and differently than the theory predicted. In particular, effective senior managers were found to use email heavily and even for equivocal communications tasks. These results cannot be explained by information richness theory or by simple modifications of the theory. Rather, they suggest that the adoption, use, and consequences of media in organizations can be powerfully shaped by social processes such as sponsorship, socialization, and social control, which require social perspectives to understand them. These processes can result in differences across organizations and other social units in the patterns of using traditional media like the telephone, but such differences are even more likely for new media, like electronic mail.
While mergers may be a good way to grow rapidly, can one sustain growth and performance for long periods? The answer lies in how well one integrates the business after the merger.
Mergers and acquisitions are complex events in organizational life for which we have incomplete understanding, in part because researchers have tended to consider only partial explanations of them. The authors addressed that problem by developing a conceptual framework that integrates theoretical perspectives from economics, finance, and especially strategy, organization theory, and human resource management to offer a broader process-oriented integrative model. The integrative model explicitly describes how synergy realization is a function of the similarity and complemen tarity of the two merging businesses (combination potential), the extent of interaction and coordination during the organizational integration process, and the lack of employee resistance to the combined entity. The approach differs from traditional methods of studying mergers and acquisitions in three ways: (1) the success of a merger or acquisition is gauged by the degree of synergy realization rather than more removed and potentially ambiguous criteria such as accounting or market returns; (2) the key attribute of combination potential is conceptualized not only in terms of the similarities present across businesses, as in most studies of mergers and acquisitions, but also in terms of the production and marketing complementarities between the two businesses; and (3) the data are derived from a case survey method that combines the richness of in-depth case studies with the breadth and generalizability of large-sample empirical investigations. The framework was tested empirically across a sample of 61 mergers and acquisitions. The extent to which a merger or acquisition resulted in synergistic benefits was related to the strategic potential of the combination, the degree of organizational integration after the deal was completed, and the lack of employee resistance to the integration of the joining firms. Furthermore, the analysis revealed that (1) independent of any similarities across joining firms, the presence of complementary operations increased the probability of acquisition success by boosting synergy realization, (2) organizational integration was the single most important factor in explaining synergy realization, even to the extent that M&As with high combination potential were significantly more successful when coupled with high organizational integration than when integration efforts were less forceful, and (3) mergers and acquisitions that were dependent on gains from combining similar production and marketing operations tended to elicit more resistance from employees than M&As focused on realizing complementary benefits. Overall, the findings provide strong support for an integrative theory of mergers and acquisitions.
This study examines why firms choose different governance structures across their alliances. We focus on the coordination costs in alliances that arise from interdependence of tasks across organizational boundaries and the related complexity of ongoing activities to be completed jointly or individually. We use a typology of alliance governance structures that differentiates structures by the magnitude of hierarchical controls to test hypotheses predicting alternative contractual choices. We use empirical data on alliance announcements in three worldwide industries over a 20-year period to assess which factors explain the choice of alliance types. The findings suggest that the magnitude of hierarchical controls in contractual relationships such as alliances is influenced by the anticipated coordination costs and by expected appropriation concerns.(. )
The ability to transfer best practices intemally is critical to a firm's ability to build competitive advantage through the appropriation of rents from scarce internal knowledge. Just as a firm's distinctive competencies might be difficult for other firms to imitate, its best practices could be difficult to imitate internally. Yet, little systematic attention has been paid to such intemal stickiness. The author analyzes intemal stickiness of knowledge transfer and tests the resulting model using canonical correlation analysis of a data set consisting of 271 observations of 122 best-practice transfers in eight companies. Contrary to conventional wisdom that blames primarily motivational factors, the study findings show the major barriers to internal knowledge transfer to be knowledge-related factors such as the recipient's lack of absorptive capacity, causal ambiguity, and an arduous relationship between the source and the recipient. The identification and transfer of best practices is emerging as one of the most important and widespread practical management issues of the latter half of the 1990s. Armed with meaningful, detailed performance data, firms that use fact- based management methods such as TQM, bench- marking, and process reengineering can regularly compare the perfonnance of their units along operational dimensions. Sparse but unequivocal evidence suggests that such comparisons often reveal surprising perfonnance differences between units, indicating a need to improve knowledge utilization within the firm (e.g., Chew, Bresnahan, and Clark, 1990).' Because intemal transfers typi-
Similarity breeds connection. This principle - the homophily principle - structures network ties of every type, including marriage, friendship, work, advice, support, information transfer, exchange, comembership, and other types of relationship. The result is that people's personal networks are homogeneous with regard to many sociodemographic, behavioral, and intrapersonal characteristics. Homophily limits people's social worlds in a way that has powerful implications for the information they receive, the attitudes they form, and the interactions they experience. Homophily in race and ethnicity creates the strongest divides in our personal environments, with age, religion, education, occupation, and gender following in roughly that order. Geographic propinquity, families, organizations, and isomorphic positions in social systems all create contexts in which homophilous relations form. Ties between nonsimilar individuals also dissolve at a higher rate, which sets the stage for the formation of niches (localized positions) within social space. We argue for more research on: (a) the basic ecological processes that link organizations, associations, cultural communities, social movements, and many other social forms; (b) the impact of multiplex ties on the patterns of homophily; and (c) the dynamics of network change over time through which networks and other social entities co-evolve.
The paper focuses on several research questions: How do the firms differ in terms of their strategic objectives for foreign acquisitions? What are the determinants of ‘success’ of acquisition? What are the differences between the American and German firms in terms of their acquisition strategies and successes?
Our special interest was to get a closer look into the technological motive of the foreign acquisitions. This made a two‐step procedure necessary. A first survey of 86 firms had to identify those acquisitions which were motivated by technological interests through a questionnaire. Findings: There are four classes of companies with different motives for acquisitions: Market oriented entrepreneurs, Short‐term profit seekers, Technological acquirers, Preemptive market protectors.
The second survey investigated the process and the results of acquisitions with a special view on the role of research and development through 60 interviews in 30 acquisition cases in both acquiring and acquired units. Findings: A network of variables explains the success. The most important are context variables (uncertainty, cultural differences), size of both firms, low degree of formalization, expertise, and lack of conflicts about technological philosophy.
This book, first published in 1996, argues that language use is more than the sum of a speaker speaking and a listener listening. It is the joint action that emerges when speakers and listeners - writers and readers - perform their individual actions in coordination, as ensembles. The author argues strongly that language use embodies both individual and social processes.
We argue that common ground - knowledge that is shared and known to be shared - can reduce the need for information flows in coordinating specialized activities within the firm, compared to between firms. Consistent with our predictions, in a sample of procurement relationships in the automobile industry, we find that the relationships within the firm involve a lower level of information sharing compared to market relationships once we statistically ensure comparability of transactions within and between firms. This does not appear to be sub-optimal for performance. Tacit coordination based on common ground may therefore be a distinctive feature of how the division of labour is managed within the firm.
This study examined antecedents and consequences of procedural justice climate (Mossholder, Bennett, & Martin, 1998; Naumann & Bennett, 2000) in a sample of manufacturing teams. The results showed that climate level (i.e., the average procedural justice perception within the team) was significantly related to both team performance and team absenteeism. Moreover, the effects of climate level were moderated by climate strength, such that the relationships were more beneficial in stronger climates. In addition, team size and team collectivism were significant antecedents of climate level, and team size and team demographic diversity predicted climate strength.
Little is known about the effects of a merger or an acquisition on an acquired company's management team. This research follows the employment status of target companies' top managers for 5 years from the date of acquisition. Results indicate that turnover rates in acquired top management teams are significantly higher than ‘normal’ turnover rates, and that visible, very senior executives are likely to turn over sooner than their less-visible colleagues. Variations in top management turnover rates, however, are not accounted for by type of acquisition (i.e. related or unrelated).
This paper argues that the quadratic assignment procedure (QAP) is superior to OLS for testing hypothesis in both simple and multiple regression models based on dyadic data, such as found in network analysis. A model of autocorrelation is proposed that is consistent with the assumptions of dyadic data. Results of Monte Carlo simulations indicate that OLS analysis is statistically biased, with the degree of bias varying as a function of the amount of structural autocorrelation. On the other hand, the simulations demonstrate that QAP is relatively unbiased. The Sampson data are used to illustrate the QAP multiple regression procedure and a general method of testing whether the results are statistically biased.
This study provides an account of how richness occurs in communication that uses electronic mail. In examining actual e-mail exchanged among managers in a corporation, the study interprets the managerial use of the communication medium of electronic mail as the users themselves understand and experience it. Employing the research approach of interpretivism in general and hermeneutics in particular, the study finds that richness or leanness is not an inherent property of the electronic-mail medium, but an emergent property of the interaction of the electronic-mail medium with its organizational context, where the interaction is described in terms of distanciation, autonomization, social construction, appropriation, and enactment.Conclusions and recommendations are that managers who receive e-mail are not passive recipients of data, but active producers of meaning; that the best or just an appropriate communication medium is not determined through an individual manager's exercise of rational decision making, but emerges as best or appropriate over time, over the course of the medium's interactions with many users; that systems professionals need to treat the managerial user of an e-mail system not merely as a client of information services, but also as a processor or co-processor to be integrated into the system design; and that information systems researchers need to dedicate attention to the actual processes by which the users of communication medium come to understand themselves, their own use of the medium, and their organizational context.
Part I. Introduction: Networks, Relations, and Structure: 1. Relations and networks in the social and behavioral sciences 2. Social network data: collection and application Part II. Mathematical Representations of Social Networks: 3. Notation 4. Graphs and matrixes Part III. Structural and Locational Properties: 5. Centrality, prestige, and related actor and group measures 6. Structural balance, clusterability, and transitivity 7. Cohesive subgroups 8. Affiliations, co-memberships, and overlapping subgroups Part IV. Roles and Positions: 9. Structural equivalence 10. Blockmodels 11. Relational algebras 12. Network positions and roles Part V. Dyadic and Triadic Methods: 13. Dyads 14. Triads Part VI. Statistical Dyadic Interaction Models: 15. Statistical analysis of single relational networks 16. Stochastic blockmodels and goodness-of-fit indices Part VII. Epilogue: 17. Future directions.
The concept of embeddedness has general applicability in the study of economic life and can alter theoretical and empirical approaches to the study of economic behaviors. Argues that in modern industrial societies, most economic action is embedded in structures of social relations. The author challenges the traditional economic theories that have both under- and oversocialized views of the conception of economic action and decisions that merge in their conception of economic actors atomized (separated) from their social context. Social relations are assumed to play on frictional and disruptive, not central, roles in market processes. There is, hence, a place and need for sociology in the study of economic life. Productive analysis of human action requires avoiding the atomization in the extremes of the over- and undersocialized concepts. Economic actors are neither atoms outside a social context nor slavish adherents to social scripts. The markets and hierarchies problem of Oliver Williamson (with a focus on the question of trust and malfeasance) is used to illustrate the use of embeddedness in explicating the proximate causes of patterns of macro-level interest. Answers to the problem of how economic life is not riddled with mistrust and malfeasance are linked to over- and undersocialized conceptions of human nature. The embeddedness argument, on the contrary, stresses the role of concrete personal relations and networks (or structures) in generating trust and discouraging malfeasance in economic life. It finds a middle way between the oversocialized (generalized morality) and undersocialized (impersonal institutional arrangements) approaches. The embeddedness approach opens the way for analysis of the influence of social structures on market behavior, specifically showing how business relations are intertwined with social and personal relations and networks. The approach can easily explain what looks otherwise like irrational behavior. (TNM)
This essay examines elements of a theory of organizational knowledge creation. To this end, a model for the management of the dynamic aspects of organizational knowledge is offered, using hands-on research and practical experience of Japanese firms. Two dimensions are examined to assess the importance of knowledge management: tacit and explicit knowledge. Four modes of knowledge creation through the interaction of tacit and explicit knowledge are presented: 1) socialization; 2) externalization; 3) internalization; and 4) combination. The process of organizational knowledge creation is also described in a corporate organizational setting. The model helps to explain how the knowledge of individuals, organizations, and societies can be enriched through the amplification of tacit and explicit knowledge of each. The key to this process is a joint creation of knowledge by both individuals and organizations. Organizations play an important role in mobilizing the tacit knowledge that individuals possess, as well as providing forums for knowledge creation through socialization, combination, externalization, and internalization. The concept of organizational knowledge creation allows for the development of a perspective that reaches beyond straightforward notions of organizational learning. Practical proposals, such as hypertext and middle-up-down management, are offered as modes of implementing more effective knowledge creation. (CBS)