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Human Resource Management in Cross-Border Mergers and Acquisitions
... The emphasis given to 'control' becomes strategically relevant when firm or companies see king assets abroad identify and consider the option of either 'merging' with a foreign companyfor example, offering some legal and / or strategic share of control -or of 'acquiring' a foreign company, where the structure of ownership allows for a greater degree of strategic control over the newly formed (post-acquisition) company. The extent to which control might be interpreted differently according to factors such as source of investment (Japan), size of organisation (NSG in relation to Pilkington) and implied / expressed 'strategic intent' (Pucik, Björkman, Evans & Stahl, 2011) are subject to critical discussion in this article. ...
... In terms specific to Japan, 'strategic integration' describes a managed and systematic process whereby two or more companies by design and intent become 'bound' to each other (Pucik et. al., 2011). In this sense, the context for attempting to achieve synergies might be conceptualised a 'newly formed company', implying that two companies prior to the acquisition operated independently of and perhaps in competition to each other. This newly formed post-acquisition entity might appear more established -and this to both insiders and ...
... 'success' or 'failure' of the acquisition in response to how the newly formed company appears to perform: for example, whether the potential assets and, by extension, sources of synergy that defined each pre-acquisition company are being integrated in a manner that expresses strategic concordance as opposed to strategic disharmony or discordance. Pucik et. al. (2011) offer in-depth research into M&A activities among Japanese companies and conclude that stakeholder perceptions / assessments of 'success' appear to be contingent on what expectations each side set for the investment. As an expression of 'strategic intent', the expectations might be communicated in an explicit manner: for example, in the ...
This article seeks to advance international business researcher and practitioner insights into processes of cross-border mergers and acquisitions. Specifically, this article highlights the extent to which processes of strategic integration might impact positively and / or negatively on the long term business performance of the newly formed firm during the post-acquisition period – a measure of performance we refer to here as ‘synergy’. In methodological terms, this article develops a mixed-method case study approach, generating, analysing and interpreting empirical data designed to illustrate processes of strategic integration implemented by senior managers at a Japanese firm, Nippon Sheet Glass (NSG), after its acquisition of a UK firm, Pilkington. The case study is longitudinal, drawing on quantitative and qualitative data gathered and analysed between 2006 and 2017. Applying a combination of event study methodology to an iterative analysis of business performance data along with coded analysis of data from in-depth interviews with key stakeholders, this article explores the extent to which strategic integration can both ‘fail’ in terms of achieving synergy and - for a number of generalizable reasons proposed in this article - ultimately ‘succeed’: for example, in cases where the acquiring and acquired firms attempt to integrate their human resource management systems while benefitting from investments of ‘patient’ capital, which (we propose) might be a distinctive feature of cross-border acquisitions sourced in Japan.
... Merger and acquisition (M&A) are worldwide phenomena that dynamically involve organizations in Asia (Pucik, Bjorkman, Evans & Stahl, 2011) and other continents. The World Economic Forum (cited in Chang & Teo, 2011) reported that Malaysia, as an emerging economy, shared 1.7% from the total number of M&A deals worldwide from 2009 to 2011. ...
... However, the problems of group cohesion in the M&As are often attributed to issues encountered during the integration process between two different cultural practices. Problems in organizational culture integration have been explained through many terms such as 'cultural distance', 'culture incompatibility' , 'cultural misfit' , and 'cultural clash' (Pucik et al., 2011). It has been found that cultural clash was the main reason for a deal's failure because one organization's way of working might be different with another in the integration (Stafford & Miles, 2013). ...
One of the knowledge gaps in relation to merger and acquisition (M&A) research is an analysis from the perspective of human resources, specifically the extent to which organizational culture and organization justice play a role in group cohesion of the employees. This research investigates the influence of organizational culture and organizational justice factors on group cohesion in selected M&A organizations in Malaysia. This study is driven by the Person-Environment (P-E) Fit Theory. A total of 219 respondents from the M&A organizations in the areas of Klang Valley were involved in this study in which they were identified through the cluster random sampling method. Data were analyzed using Structural Equation Modeling (SEM). This study provides insights to the theory and practice of human resource management in organizations experiencing M&A.
... An M&A refers to any deal that results in an organization being merged with or acquired by another with the aim of capitalizing on shared assets, resources and technologies (Gomes et al., 2013). M&A deals have been increasing in the past two decades, becoming more prominent fixtures following the economic crisis of 2008 (Pucik et al., 2011). This practice, which was initiated by multinational companies, is now commonly adopted among small-medium enterprises as well. ...
... One of the major challenges facing management in post-M&A is determining what affects organizational identification in the new organization, particularly from the aspects of organizational factors of justice and culture. While many studies have been conducted on M&A outcomes, the concerns have focussed mainly on economic and financial matters (Pucik et al., 2011;Banal-Estañol and Seldeslachts, 2011;Edwards and Edwards, 2012), with a large number of studies on companies in the UK and USA (Cartwright and Schoenberg, 2006). In this regard, the research perspective regarding organizational behaviour such as organizational identification is lacking, particularly in a non-western context. ...
Purpose
This study examines the influence of two organizational factors, namely organizational justice and organizational culture, on organizational identification as perceived by employees following mergers and acquisitions (M&A) in Malaysia.
Design/methodology/approach
The study, which adopts the Social Identity Theory as its theoretical foundation, was conducted among employees from selected Malaysian organizations that had undergone M&A from 2009 to 2016. Data were obtained from 302 respondents and analyzed using Structural Equation Modelling procedures.
Findings
The results reveal that interactional justice and four dimensions of organizational culture contribute significantly to organizational identification, with a determination power of 61%.
Research limitations/implications
The research is limited in terms of respondents who were employed in M&A organizations in the Klang Valley areas in Malaysia. The scope is also limited to an examination of two groups of organizational factors, viz. justice and culture, that lead to organizational identification. Implications to managing human resources from the perspective of organizational development are discussed.
Practical implications
The study offers practical insights to human resource managers in strengthening organizational identification as perceived by employees after an M&A by considering the crucial role of interactional justice and organizational culture.
Originality/value
There have been few investigations that link employees’ perceptions of organizational justice and culture with post-merger organizational identity. This study theorises on human issues in M&A and enriches the Western literature on organizational identification by providing insights from an Asian (Malaysian) perspective.
... This surprising finding can be explained by the fact that organizational cultural differences are the key social identity category in international acquisitions whereas national cultural differences are less central. It may also be that managers have learned to focus attention on apparent national cultural differences and to manage them (Morosini et al., 1998; O'Grady and Lane, 1996; Pucik et al., 2010). Our data supported the hypothesis that organizational and national cultural differences are positively associated with learning in terms of knowledge transfer. ...
... This surprising finding can be explained by the fact that organizational cultural differences are the key social identity category in international acquisitions whereas national cultural differences are less central. It may also be that managers have learned to focus attention on apparent national cultural differences and to manage them ( Morosini et al., 1998;O'Grady and Lane, 1996;Pucik et al., 2010). ...
abstractThe purpose of this paper is to elucidate the effects of organizational and national cultural differences on international acquisitions. We argue that cultural differences prompt social identity building that leads to ‘us versus them’ thinking and thereby creates the potential for social conflict. We also maintain that the same cultural differences can contribute to learning in terms of knowledge transfer. We develop a structural equation model to test these hypothesized effects on a sample of related international acquisitions. Our analysis shows that cultural differences at the organizational level are positively associated with social conflict, but that national cultural differences can decrease social conflict. Furthermore, both organizational and national cultural differences are positively associated with knowledge transfer. This analysis shows the importance of disentangling the various effects that cultural differences have on international acquisitions. It also suggests that national cultural differences are less of a problem in international acquisitions than is usually assumed.
... M&As often trigger major organizational changes which are traumatic and stressful for the employees concerned (e.g., Cartwright, Tytherleigh, & Robertson, 2007;Uzelac, Bauer, Matzler, & Waschak, 2015). Many M&As fail on account of an underestimation of the challenges to human resource management (HRM), and/or because they disrupt existing work and employment relations without necessarily providing better systems in their place (e.g., Aguilera & Dencker, 2004;Cho, Lee, & Kim, 2014;Clark, Gioia, Ketchen Jr., & Thomas, 2010;Drori, Wrzesniewski, & Ellis, 2011;Edwards & Edwards, 2015;Pucik, Björkman, Evans, & Stahl, 2015;Schuler & Jackson, 2001). ...
Mergers and acquisitions (M&As) have been a popular strategy for firms to increase their competitive advantage. Existing research has revealed a wide range of implications for the workforce and human resource management (HRM) stemming from M&As. However, insufficient attention has been paid to issues related to employee resilience. We argue that employee resilience, a concept that is still to gain widespread attention in HRM research, is crucial to organizations wishing to manage their M&As successfully, especially in the post-M&A integration. We develop a set of complementary propositions, present a research framework, and indicate directions for future studies.
... 1 See Cooke, Wood, Wang, and Li (2018), and Pucik, Björkman, Evans, and Stahl (2015) for earlier reviews of HRM in the M&A context. ...
... We choose this specific topic because there remains insufficient research on cross-border merger and acquisition (CBM&A) activities by emerging market firms in general and by Chinese firms more specifically (e.g., Du & Boateng, 2012). HRM is also widely recognized as the most challenging part of post-M&A integrations (e.g., Gross, Huang, & Ding, 2017;Kiessling, Harvey, & Moeller, 2012;Pucik, Björkman, Evans, & Stahl, 2015). For example, Du and Boateng's (2012) systematic review of articles in English academic journals (publication period 2000-2012) on CBM&As by emerging market firms has recorded only 22 articles on the topic. ...
The expansion of the Chinese firms' global footprints in recent years reveals their growingly evident strategic intent and emerging capability, and calls for the need to (re)examine how emerging multinational enterprises' (EMNEs) internationalization strategies could be conceptualized with implications for human resource management (HRM). However, there remains insufficient research on cross-border merger and acquisition activities by emerging economy firms in general and by Chinese firms more specifically. This review paper fills part of this research gap by examining the acquisition intent and post-acquisition strategy of Chinese MNEs (CMNEs). Specifically it examines the post-acquisition challenges they are likely to encounter, and the implications for organizational and HRM capability building. We identify a set of research avenues for future investigation that may shed further light on how institutional and cultural factors at various levels and CMNEs' strategy impact various aspects of HRM practices.
... merging firms are a key element affecting effectiveness of the integration process. Booz, Allen and Hamilton, for instance, conducted a survey with more than 200 chief executives of European companies, in which the participants ranked the ability to integrate culturally as a more important aspect than financial or strategic factors in M&As (Pucik et al. 2011). ...
In this chapter, we explore the concept of Brazilian jeitinho, showing that it can be a managerial talent and way to improve the integration of globally distributed teams. The jeitinho is a typical Brazilian trait, and is also a social mechanism characterized by an immediate view, directed towards short-time results, with an emphasis on crisis solutions. With data from a case study conducted at Volvo 3P, we show how the Brazilian jeitinho can be understood as a cultural characteristic and as a talent which provides flexibility in dealing with interpersonal relations inside teams, improving their integration and in consequence their performance. In the first part of the chapter, we present the context analysis, the research question and the structure of the chapter. In the second part, the state of the art is presented, focusing on Global Talent Management and on the research that led to the empirical data. We also present the company in which the data collection was performed – Volvo 3P. Next we explain the method, data collection and data analysis procedures. In the third part, we focus on jeitinho, explaining its origins, positive and negative aspects, and analyzing several facets of this ‘Brazilian cultural trait’, as well as its implications for the cultural adaptation and integration. Next we focus on jeitinho as a managerial talent, exploring and analyzing the elements that contribute towards the development of the managers’ flexibility, based on the case study conducted at Volvo 3P. Finally we conclude, outlining and synthesizing our findings and managerial implications.
Purpose
The purpose of this paper is to explore engagement of flexpatriates on rotational and regular field assignments in the energy industry, theoretically grounded in the “Four Fundamental Pillars of Engagement”.
Design/methodology/approach
In an exploratory case study within a global organisation in the energy industry, in a post-merger/acquisition integration stage, the authors interviewed 24 rotational and regular field assignees of seven different nationalities, residing at nine different global locations.
Findings
The results of the case study show that the following newly identified drivers within the “Four Fundamental Pillars of Engagement” are crucial for engagement of flexpatriate rotational and regular field assignees in the energy industry: information, communication and technology; training, learning and growth; support from colleagues and line managers (“capacity to engage”); job ownership/control; respect, recognition and appreciation (“reason to engage”); freedom to be creative and innovative; pride and promises; client satisfaction (“freedom to engage”); alignment between the organisation and the individual (“alignment to engage”), especially in a post-merger and acquisition (M&A) organisational context during a downturn in the oil and gas industry.
Research limitations/implications
The case study focused on rotational assignees from one particular organisation in the energy industry, which restricts the generalisability of the findings on engagement of rotational assignees to other organisations, industries and geographies.
Practical implications
Organisations in the energy industry that actively promote engagement of rotational assignees, especially during the post-M&A integration stage and economic turmoil, will strengthen their sustainable global competitive advantage.
Originality/value
The contribution of this paper is that it presents a refinement and expansion of the drivers of engagement within the “Four Fundamental Pillars of Engagement”, conceptualised in an international post-M&A organisational context during a downturn in the oil and gas industry.
Die gegenwärtige Forschung im internationalen und interkulturellen Management geht überwiegend von der Annahme aus, dass Kulturunterschiede
Hemmnisse darstellen, die es zu verhindern, überwinden oder zumindest effektiv zu managen gilt. So werden unterschiedliche
Phänomene wie das Scheitern von internationalen Allianzen und Unternehmenszusammenschlüssen (z. B. Cartwright und Schoenberg
2006), Fehlentscheidungen bei der Wahl der Markteintrittsstrategie (z. B. Harzing 2004), Anpassungsprobleme von Führungskräften
bei Auslandseinsätzen (Black et al. 1991), Konflike und Kommunikationsprobleme in gemischtnationalen Arbeitsgruppen (z. B.
Mannix und Neale 2005) und Schwierigkeiten beim grenzüberschreitenden Transfer von technischem Wissen und Management-Knowhow
(Ambos und Ambos 2009) auf „Kulturbarrieren“ zurückgeführt, wobei meist davon ausgegangen wird, dass Unterschiede in Landeskulturen
ein größeres Hindernis darstellen als Unterschiede in Unternehmenskulturen. Geert Hofstede, der wohl am häufigsten zitierte
Experte auf dem Gebiet der interkulturellen Managementforschung, vertritt etwa die Ansicht: „Culture is more often a source
of conflict than of synergy. Cultural differences are a nuisance at best and often a disaster.“ (www.geert-hofstede.com).
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