scholarly journals From play to pay: a multifunctional approach to the role of culture in post-merger integration

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Augusto Sales ◽  
Steffen Roth ◽  
Michael Grothe-Hammer ◽  
Ricardo Azambuja
Keyword(s):  
Cultural Differences ◽  
Social Systems ◽  
Macro Level ◽  
Niklas Luhmann ◽  
Management Tools ◽  
Content Type ◽  
Societal Context ◽  
Values And Beliefs ◽  
Post Merger Integration ◽  
Merger Integration

PurposeThe literature on Mergers and Acquisitions (M&A), cultural differences between organizations have frequently been identified as one of the main challenges in the process of post-merger integration (PMI). Existing research has explored a broad variety of cultural differences in perceptions, such as those relating to expectations, norms, values and beliefs within the respective organizations, and how these affect the process and success of PMI. However, less attention has been paid to the relevance of the macro-societal context to PMI. The ambition of this article is, therefore, to advance our understanding of how macro-level societal factors define organizational cultures and affect the success of PMI.Design/methodology/approachWe draw on social systems theory as devised by Niklas Luhmann, assuming that organizations are always embedded in the macro-level societal context of distinctive realms of social reality—such as the economy, politics, religion and the arts—that make up the so-called “function systems”. Looking at the case of the integration of a Brazilian technology start-up into a market-leading corporation, we analyze the dominant orientations towards these function systems, and the changes in these orientations over time.FindingsThe results suggest that differences in organizational culture in PMI can be partly explained by differences in orientations to the function systems. Moreover, forcing dramatic changes of orientations towards the function systems within a merged entity can severely damage its raison d'etre in the first place, potentially leading to, in some sense, an account of “culture murder”.Originality/valueThis article is unique in demonstrating that organizations are multifunctional systems whose culture is defined by the highly specific and potentially varying degrees of importance they place on individual function systems and that knowledge or neglect of these functional profiles may seriously affect the success of post-merger integration. Against this backdrop, the article presents a multifunctional profiling method that may easily translate into PMI management tools.

Reaching organizational ambidexterity in the merger process: a temporal switching

2019 ◽  
Vol 58 (5) ◽  
pp. 879-896
Author(s):  
Anne-Sophie Thelisson ◽  
Audrey Missonier ◽  
Gilles Guieu
Keyword(s):  
Participant Observation ◽  
Organizational Ambidexterity ◽  
Longitudinal Case Study ◽  
Exploration And Exploitation ◽  
Content Type ◽  
Merger Process ◽  
Post Merger Integration ◽  
And Control ◽  
Merger Integration ◽  
Parent Companies

Purpose The purpose of this paper is to explore how a company reaches organizational ambidexterity during a merger process. Organizational ambidexterity refers to the proactive adaptations of an organization to simultaneously explore and exploit. Design/methodology/approach The paper presents a longitudinal case study of a public-private merger of two listed French companies. The data were collected from participant observation, interviews and archival documentation over two years. Findings The balance between autonomy and control by the parent companies evolves during the post-merger integration. The findings reveal that there was no concordance between the oscillations between autonomy and control on the part of the parent companies and the new organization’s exploration/exploitation strategies. However, the progressive evolution of control and autonomy from the parent companies engendered organizational ambidexterity during the third phase integration. Practical implications The study adds insight into how organizations can develop ways to manage organizational ambidexterity dynamics by employing temporal mechanisms, referring to an organization’s shifting sequentially between exploration and exploitation. The case highlights how temporal switching between exploration and exploitation occurs to ultimately enable ambidexterity. Originality/value Although organizational ambidexterity is recognized as a key element for post-merger integration, how it is achieved over the course of the merger process has received little attention. The study highlights that in the case of public-private mergers, the parent companies influence exploration and/or exploitation strategies. The paper adds insights on whether exploration and exploitation can be differentiated over time and whether exploration and exploitation can be reconciled at the same time.

Systems Theory and Journalism

2019 ◽  
Author(s):  
Armin Scholl ◽  
Maja Malik
Keyword(s):  
Public Relations ◽  
Systems Theory ◽  
Social Systems ◽  
Theoretical Perspective ◽  
Modern Society ◽  
Relevant Information ◽  
Functional Differentiation ◽  
Macro Level ◽  
Niklas Luhmann ◽  
External Observer

Observing, describing, and analyzing journalism as part of society requires theories on a macro level. Unlike normative theories, which criticize journalism with respect to its achievements and failures within society, systems theory operates with the concept of function in a non-normative sense. Based on the groundwork of Talcott Parsons’ theory of social systems, Niklas Luhmann developed systems theory further and radicalized it by strictly avoiding any kind of structural conservatism. His approach is built on the assumption that social systems operate autonomously on the basis of the functional differentiation to their environment. Macro-level systems, i.e., societal systems, fulfill unique functions for and within society. Functional autonomy and singularity make a modern society highly efficient but force each system to rely on the functional performances of all other societal systems. Hence, societal systems are structurally coupled and interdependent. Epistemologically, systems do not exist as ontological units but are strictly observer-related, be the observer the system itself or an external observer, such as the scientific community is. In journalism research, Luhmann’s systems theory has been applied to journalism as a societal system. Several competing approaches with different perspectives on the system observed (journalism, the mass media, or the public sphere) have been developed with respect to identifying the basic characteristics on which the system operates. Despite their differences they have this in common: journalism is not considered the sum of individual journalists and their (individual) way of working, instead, the systems-theoretical perspective is holistic. However, compared to theories of professionalism, which is also a holistic concept, systems theory neither identifies journalism with the profession of journalism, nor commits it to professional journalism. Instead, the structure of journalism is flexible, i.e., functionally equivalent, as long as its function is fulfilled. This function can be specified: journalism provides society periodically with current, independent, factual, and relevant information. Empirically, systems theory helps defining the population of journalists by deducing it from its function. Unlike mere empirical approaches, which arbitrarily draw samples from an unknown population, it is possible to clearly draw distinctions between journalism and other forms of public communication, such as public relations, advertising, propaganda, or lay communication. Still, it is challenging to operationalize such an abstract theory, as it is not specially made for hypothesis-driven research.

A paradoxical approach symbiotic to postmerger integration: a French longitudinal case study

2019 ◽  
Vol 31 (2) ◽  
pp. 232-259
Author(s):  
Anne-Sophie Thelisson ◽  
Audrey Missonier ◽  
Gilles Guieu ◽  
Lotte S. Luscher
Keyword(s):  
Process Model ◽  
Dynamic Decision Making ◽  
Longitudinal Case Study ◽  
Target Firm ◽  
Content Type ◽  
Organizational Autonomy ◽  
Merger Process ◽  
Inclusive Approach ◽  
Post Merger Integration ◽  
Merger Integration

Purpose This paper aims to examine post-merger integration (PMI) through the lens of paradox to determine how paradoxes contribute to successful integration. Although PMI has been identified as crucial to understand merger success or failure, the literature on PMI drivers remains inconclusive. Design/methodology/approach Drawing on the theory of paradox and two key elements of PMI, strategic interdependency (SI) and organizational autonomy (OA), the authors describe the merger of two listed French companies using longitudinal data. Findings The authors identify how the paradox between OA and SI was triggered and fostered PMI success by leading to symbiotic integration. They also show that two capabilities were central in helping the paradox to evolve: preserving the specificities of the organizations and pooling their respective capabilities. These capabilities result from basic decisions and actions during the integration implementation, such as highlighting the expertise of the target firm, refocusing the core activity while valorizing each company’s expertise, clarifying the identity of the new organization on the market and enhancing joint piloting and transferring both general management capacity and functional abilities during the reorganization period. Practical implications The authors offer several useful insights for managers trying to manage paradoxical tension throughout the merger process. This study encourages managers to embrace inconsistencies as they make decisions and to shift to dynamic decision-making as a way to adapt to complex contexts. Originality/value This study adopts a global and inclusive approach to focus on OA and SI and flesh out a picture of the integration process. It proposes a dynamic process model to conceptualize the stage-wise nature of the PMI process by highlighting the interrelations between OA and SI dynamics.

Segmentally aware: know when to merge and when to purge

2019 ◽  
Vol 33 (1) ◽  
pp. 196-214
Author(s):  
Yao Ma ◽  
Jiahua Xu
Keyword(s):  
Mergers And Acquisitions ◽  
Financial Performance ◽  
Design Methodology ◽  
Content Type ◽  
Structural Integration ◽  
Target Company ◽  
Overall Performance ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Integration Levels

Purpose The purpose of this paper is to hone in on the degree of segment-level integration relative to corporate post-merger performance. Design/methodology/approach The sample consists of 89 segments in 29 combined companies resulting from large mergers and acquisitions (M&A) transactions between 2001 and 2014 in the pharmaceutical and chemical industries worldwide. The authors track the change through M&A in performance of segments with different integration forms as well as performance of entire companies with different integration levels. Findings The authors find that integrating the segments from the target significantly improves the acquirer’s overall performance, as well as the concerned segments’ performance, following an M&A transaction. Whereas the segments from the target company, when left unintegrated, not only exhibit subpar performance among all the segments, but also appear responsible for the worsening corporate performance. Various possible reasons for this contrast are discussed. Originality/value This paper raises awareness of the significance of segment-level analyses, and contributes to the post-merger integration (PMI) research by examining the influence of structural integration on operating segments. To the best of our knowledge, this paper is the first to investigate integration forms and the post-merger financial performance of various segments within companies.

Integration duration of post-merger and leverage dynamics of mergers: theory and evidence

2019 ◽  
Vol 31 (2) ◽  
pp. 208-231
Author(s):  
Yao Cheng
Keyword(s):  
Capital Structure ◽  
Dynamic Model ◽  
Content Type ◽  
Acquiring Firms ◽  
Integration Period ◽  
Target Firms ◽  
Method Of Payment ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Leverage Dynamics

Purpose The purpose of this paper is to examine the effects of the post-merger integration duration on acquiring firms’ leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specified post-merger integration period. Design/methodology/approach This paper presents a dynamic model and empirical tests that describe the impact of the post-merger integration period on the capital structure dynamics of the acquiring and target firms before a merger and during the post-merger integration period. By incorporating costs associated with the post-merger integration period, the model can provide new implications for the leverage behavior around the merger. Findings The model generates new implications related to acquiring firms’ leverage dynamics along with method of payment choice. Specifically, the model indicates that the post-merger integration duration is negatively associated with the market leverage of newly-merged firms at the time of merger completion and during the integration period. Further, acquirer managers are more likely to use equity to finance a merger when the integration duration is likely to be lengthy. Originality/value This is the first model in the literature that assumes that both the acquiring and the target firms can change their capital structure overtime, which allows us to analyze both the financing structure and the merger timing. Previous empirical studies also ignore the integration period in the analysis of the method of payment choice and leverage behavior around mergers. In the tests reported in this paper, the authors control for the factors mentioned above and demonstrate that the expected integration duration is not subsumed by those variables implying that it has its own power in explaining the choice of leverage and merger financing method.

Managing failure in the merger process: evidence from a case study

2020 ◽  
Vol 42 (1) ◽  
pp. 33-39
Author(s):  
Anne-Sophie Thelisson
Keyword(s):  
Single Case ◽  
Content Type ◽  
Theoretical Concepts ◽  
Organizational Issues ◽  
Integrative View ◽  
Merger Process ◽  
Consistent Picture ◽  
Post Merger Integration ◽  
Merger Integration

Purpose Despite their high number, most mergers end in failure. Academic studies of how these failures occur have remained rare, first, because of the difficulty of accessing the cases, and second, because of the difficulty of obtaining – for the purposes of qualitative analysis – objective and freely shared perceptions from the stakeholders, who tend to avoid speaking about failure. This is unfortunate, however, as failure can serve as a stimulus for organizational learning and readaptation for the future. Design/methodology/approach The author investigated how an organization managed failure during the post-merger integration stage. The author described the merger of two listed French companies using longitudinal data. Findings This in-depth case study provides new insights into failure during post-merger integration. The paper highlights the complexity of post-merger integration processes and the failures that the integration stakeholders had to address. The author underlined how they recognized failures and put into place solutions. They particularly highlighted two failures and how they were managed by the managers who acted as knowledge brokers within the new organization and by stakeholders who deconstructed the organization to ensure its future. Research limitations/implications The limitations are those concerning a single case study. Practical implications The paper identified trigger events in the merger process that prompted stakeholders to step in and manage and resolve failures during the integration period. Such triggers can be considered as steps for managers and stakeholders to solve organizational issues in the merger process. The paper highlighted the complexity of post-merger integration processes and the failures faced by integration stakeholders. The analysis thus contributes to an inclusive and integrative view of the challenges in this process. Social implications Despite their high number, merger and acquisition failures remain surprisingly high. This paper explored how stakeholders deal with failures by identifying which solutions are best adapted to their organization. Originality/value The case provides a vivid illustration of failure management during a merger process. Theoretical concepts and empirical findings from the literature are combined to present a single consistent picture.

Impact of psychological capital on the resistance to change during post-merger integration

2017 ◽  
Vol 30 (6) ◽  
pp. 936-956 ◽  
Author(s):  
Jennifer Linda Dorling
Keyword(s):  
Theoretical Model ◽  
Psychological Capital ◽  
Resistance To Change ◽  
Content Type ◽  
Employee Resistance ◽  
Research Findings ◽  
Research Questions ◽  
Post Merger Integration ◽  
Merger Integration ◽  
The Relationship

Purpose Mergers and acquisitions (M&As) are major corporate changes and are among the most stressful for employees. Employee resistance is a well-recognised reason for high failure rates of post-merger integration (PMI). The contemporary concept of psychological capital (PsyCap) is a promising approach for dealing with the issue. To date, relatively little research has been conducted on the relationship between PsyCap and resistance. The purpose of this paper is to examine the possible positive impacts of PsyCap on employee resistance during PMI, based on a review of the existing literature and selected interviewers with a panel of experts, and offer a theoretical model for decreasing the resistance. Design/methodology/approach This paper builds on the literature on M&A, PMI, and employee resistance by focusing on the contribution of PsyCap. Apart from formulating propositions and answering pre-determined research questions, the findings are the basis for a theoretical model that was validated by a panel of experts. Findings This research documents the negative emotions that are triggers for resistance during PMI under the influence of PsyCap. By measuring and assessing the PsyCap needs of employees, resistant employees were revealed, and their PsyCap was developed using tailored interventions. The research findings indicate this to be a feasible approach for reducing resistance during PMI. Research limitations/implications All of the findings rely on empirical testing and operationalisation. Cultural differences may influence the PsyCap dimensions. Practical implications M&A deals often fail due to unsuccessful PMI implementation because leaders fail to consider the psychological impacts when trying to overcome resistance. The model proposes a possible solution. Originality/value The offered theoretical approach is original and provides new insights for researchers and practitioners who evaluate M&A strategies.

Allianz and its fateful acquisition of Dresdner Bank

2016 ◽  
Vol 32 (6) ◽  
pp. 23-26
Author(s):  
Mark Thomas ◽  
Christian Weber
Keyword(s):  
Corporate Culture ◽  
Design Methodology ◽  
Reading Time ◽  
Content Type ◽  
Pertinent Information ◽  
Post Merger Integration ◽  
Merger Integration

Purpose The Allianz acquisition of Dresdner Bank was announced as one of the most important deals of the year, in 2001. It was certainly one of the largest. In April 2001, the Munich-based insurance firm, Allianz, bought Dresdner Bank for more than €20 bn. Unfortunately, such optimism was unfounded. The projected synergies never materialized and in August 2008, Allianz sold Dresdner Bank to Commerzbank for €9.8 bn. The company had lost more than half its value in just seven years. The purpose of this article is to analyze how this happened. Design/methodology/approach The article is a case study of the acquisition Dresdner, looking specifically at problems of post-merger integration. Findings The article shows that problems of corporate culture were a serious handicap to the success of the merger. Originality/value The briefing saves busy executives and researchers hours of reading time by selecting only the very best, most pertinent information and presenting it in a condensed and easy-to-digest format.

Biotechnological mergers and acquisitions: features, trends and new dynamics

2015 ◽  
Vol 17 (1) ◽  
pp. 91-109 ◽  
Author(s):  
Matteo Rossi ◽  
Alkis Thrassou ◽  
Demetris Vrontis
Keyword(s):  
Target Identification ◽  
Secondary Data ◽  
High Tech ◽  
Special Focus ◽  
Extensive Literature ◽  
Content Type ◽  
Biotech Industry ◽  
Post Merger Integration ◽  
Definition Of ◽  
Merger Integration

Purpose – The purpose of this paper is to analyze the phenomenon of mergers and acquisition (M & A) in high-tech sectors with a special focus on biotechnological firms. Recent years have witnessed an impressive wave of M & As, but these operations, despite their popularity, have produced mixed results for their stakeholders and presented no systemic vision. Design/methodology/approach – The paper is descriptive and the result of a secondary data-based research. Methodologically founded on the works of Rossi et al. (2011, 2013) and following an extensive literature review on M & A processes in high-tech sectors, the paper analyzes the dynamics, trends and attributes biotechnological M & As. Findings – The biotechnology sector, over the economically turbulent past few years, faced a distinct difficulty in attracting significant investor capital. Traditional pharmaceutical companies with sufficient cash from their existing sales but facing a dried-out product and patent pipeline have acquired innovative, but cash-poor biotech firms. The findings indicate that the trends in the biotech industry make consolidation in this sector inevitable. For acquiring firms, therefore, it will be necessary to realize a rigorous process of strategic target identification, due diligence and unified post-merger integration as the only way to create a sustainable shareholder value and high firm performance. Research limitations/implications – The limitations of the paper are a consequence of its very nature, i.e. the fact that it is a descriptive, secondary data-based research. Further, empirical research is therefore necessary to test the findings, to refine the contextual parameters involved and to prescribe target-specific action. Originality/value – The value of the paper stems from its definition of the link between the biotech industry attributes and M & A activities, consequently offering a valuable theoretical basis for empirical development and practical application, as well as a context for prescribed actions and processes.

Sign in / Sign up

Export Citation Format

Share Document