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The function-specific microfoundations of dynamic capabilities in cross-border mergers and acquisitions

Published on Apr 1, 2019in International Business Review 3.64
· DOI :10.1016/j.ibusrev.2019.03.002
Lauri Haapanen1
Estimated H-index: 1
(University of Oulu),
Pia Hurmelinna-Laukkanen19
Estimated H-index: 19
(University of Oulu)
+ 1 AuthorsPertti Paakkolanvaara1
Estimated H-index: 1
(University of Oulu)
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Abstract
Abstract In mergers and acquisitions, the acquiring firm must combine two firms’ resources and capabilities so that the outcome yields value. In individual firms, the marketing & sales, and R&D functions have typically developed intertwined and complex relationships over time. These multifaceted dependencies may obscure the integration of the firms and their functions. In order to reveal to what extent cross-functional relationships determine the success or failure of an acquisitions, we have made one of the first attempts to study merging firms’ function-specific capabilities, underlying microfoundations, and their cross-functional relationships during the integration process—instead of focusing on acquisition capabilities as such. We use longitudinal data from two cross-border acquisitions between US and Finnish SMEs. Our results indicate that major differences between merging firms’ cross-functional microfoundations—that is, their structures, processes, routines, and skills—might either enforce or erode the seemingly promising synergies at the product and market levels, depending on managerial awareness of their nature.
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Published on Aug 1, 2017in European Management Journal 2.98
Satu Teerikangas7
Estimated H-index: 7
(UTU: University of Turku),
I.C. Thanos8
Estimated H-index: 8
(Lancaster University)
Abstract Extending research on the performance of Mergers and Acquisitions (M&As), this paper seeks to explain how the post-acquisition integration phase affects acquisition performance. Despite extensive research efforts, there remains a scant understanding of how acquisition implementation, particularly in the post-acquisition integration phase, impacts the performance of M&As. Based on an extensive study of eight acquisitions, in this paper, a grounded model detailing the mechanisms by which ...
Published on Dec 1, 2016in Journal of Business Research 4.03
Lauri Haapanen1
Estimated H-index: 1
(University of Oulu),
Mari Juntunen8
Estimated H-index: 8
(University of Oulu),
Jouni Juntunen8
Estimated H-index: 8
(University of Oulu)
Resource-based view suggests that heterogeneity in resource and capability endowments provides firms with a necessary advantage to compete on foreign markets. Separate discussions focus on different perspectives on capabilities, leaving room for a more comprehensive approach. This study is aiming at combining previous results and proposes that international expansion requires a bundle of key capabilities, a capability portfolio, in which capabilities' relative importance varies as internationali...
Yair Friedman3
Estimated H-index: 3
(TAU: Tel Aviv University),
Abraham Carmeli44
Estimated H-index: 44
(TAU: Tel Aviv University)
+ 1 AuthorsKatsuhiko Shimizu1
Estimated H-index: 1
(Keio: Keio University)
Research in the field of mergers and acquisitions (M&A) has extensively examined potential sources of failure and success. However, despite increasing attention from scholars, only a handful of studies have actually investigated M&A processes. Adopting a process perspective is crucial to unraveling the underlying micro-behavioral foundations of M&A. This paper focuses on why M&As rarely reach their full potential. Specifically, we address these issues by providing an in-depth review of mechanism...
Published on Oct 1, 2016in Industrial and Corporate Change 1.82
Paavo Ritala14
Estimated H-index: 14
(Lappeenranta University of Technology),
Bruce Heiman6
Estimated H-index: 6
(SFSU: San Francisco State University),
Pia Hurmelinna-Laukkanen19
Estimated H-index: 19
(University of Oulu)
Dynamic capabilities, which are subject to organizational embeddedness and potential path dependence, are sometimes inadequate for dealing with urgent and unexpected organizational and strategic problems. This study explores the boundary conditions of dynamic capabilities and proposes a complementary approach for dealing with unfamiliar problems: the ad hoc problem-finding and problem-solving perspective. Building on theoretical arguments of the dynamic capability view, managerial choice, and pr...
Published on Aug 1, 2016in California Management Review 5.00
Teppo Felin22
Estimated H-index: 22
(University of Oxford),
Thomas C. Powell17
Estimated H-index: 17
(University of Oxford)
How can organizations put dynamic capabilities into practice? We focus on the power of organizational design, showing how managers can harness new organizational forms to build a capacity for sensing, shaping and seizing opportunities. Fast-moving environments favor open organization and self-organizing processes that quickly convert individual capabilities into actionable collective intellect. We argue that self-organizing processes do not organize themselves but require managers to design and ...
Published on Jul 1, 2016in European Economic Review 1.71
David J. Teece72
Estimated H-index: 72
(University of California, Berkeley)
Mainstream economic theory has generally excluded consideration of the role of managers, which has, in turn, impaired its ability to explain resource allocation by, and heterogeneity among, firms. In the real world, managers are called on to fill entrepreneurial and leadership roles: sensing opportunities, developing and implementing viable business models, building capabilities, and guiding the organization through transformations. These entrepreneurial management tasks are part of the organiza...
Published on Feb 1, 2016in International Business Review 3.64
Noelia-Sarah Reynolds3
Estimated H-index: 3
(University of Essex),
Satu Teerikangas7
Estimated H-index: 7
(UCL: University College London)
Paralleling the rise of cross-border mergers and acquisitions (M&As) over the last decades, the academic study of the international dimensions and challenges of cross-border M&A has increased. This has led to a conceptual distinction between domestic M&As on the one hand, and cross-border M&As on the other hand. Our two ethnographic case studies on domestic mergers enable us to contradict this well-established assumption. We observe domestic mergers to be impacted by cross-border dimensions. The...
Published on Feb 1, 2016in International Business Review 3.64
Ibne Hassan1
Estimated H-index: 1
,
Agnieszka Chidlow6
Estimated H-index: 6
(University of Birmingham),
Ana M. Romero-Martínez8
Estimated H-index: 8
(Complutense University of Madrid)
Merger and Acquisitions have been on the rise since the last three decades and as such have attracted considerable attention from the research community. Conclusions drawn by the existing studies indicate that such transactions do not result in a better performance, they erode acquiring firm's shareholders value, and also produce highly volatile market returns. A number of studies have analysed reasons for such inefficiencies and pointed out to several factors behind them. However, to the best o...
Published on Oct 1, 2015in British Journal of Management 2.75
Paulina Junni10
Estimated H-index: 10
(BI Norwegian Business School),
Riikka M. Sarala15
Estimated H-index: 15
(UNCG: University of North Carolina at Greensboro)
+ 1 AuthorsYaakov Weber18
Estimated H-index: 18
(College of Management Academic Studies)
The aim of the present study is to examine the role of strategic agility as a component of the acquisition process by investigating its constituent elements and effects on knowledge transfer in the context of acquisitions. The study also elaborates on the relationship between knowledge transfer and performance in acquisitions. We test our theoretical model on a quantitative data set of acquisitions conducted by Finnish companies.
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