Corporate social responsibility as a legitimation strategy in a merger

PurposeThe objective of the study is to explore legitimation dynamics in a public–private integration process and to gain insights on the specific role of CSR in triggering public–private logics.Design/methodology/approachCorporate social responsibility (CSR) is part of firms' strategy in gaining legitimacy from their stakeholders in a merger context. However, little is known about the role of CSR in triggering diverse dynamics from public or private logics during post-merger integration. This study aims at exploring the specific role of CSR in triggering such diverse logics. A qualitative research design based on a single case study of a public–private merger of two French listed companies in the urban planning sector was opted for. The analysis was pursued in real time from the signing of the agreement and then over two years.FindingsThe results show that public–private legitimation is a process that proceeds in stages. The authors emphasize the key factors that characterize it: align on external concerns: reflecting societal and institutional pressures (public legitimation); readapt to make sense internally in relation to the merger through managerial innovation (private legitimation) and CSR as a form of corporate self-storying: combining the social and societal aspects of CSR within the organization (hybrid legitimation). Three major actions were identified in activating a CSR legitimation strategy: identifying and responding to local needs; building a unified brand, culture, and employee commitment to the organization; and creating sustainable programs.Research limitations/implicationsThe first major contribution is linked to triggers influencing legitimation dynamics and in particular the role of CSR operating as a legitimation strategy in the merger integration process. A second theoretical contribution is linked to the evolutionary nature of the post-merger integration process. The processual study shows how stakeholder legitimacy demands can escalate and change over time.Practical implicationsFirst, three major actions were identified as key steps in activating a CSR legitimation strategy (identifying and responding to local needs; building a unified brand, culture, and employee commitment to the organization; and creating sustainable programs). These missions can be understood as key steps for managers in implementing CSR within an organization in a post-merger integration context. Second, this study increases our comprehension of legitimation as a dynamic micro-process. The different stages described in the study can be considered by the managers involved in the merger process as learning experiences to understand the complex phenomenon that is the integration process.Originality/valueThis study enriches the legitimacy-as-process perspective in providing insights on the specific role of CSR in triggering public–private logics.

The Effects of Ingroup Development in a Post-Merger Joint-Brand Context

<p>Mergers and acquisitions (M&As) involve a complex relationship between two previously separate organisations. Social Identity Theory (SIT) has been applied to the study of M&As as a way to better understand this relationship. To date, SIT literature has focused on developing the relationship between the merging organisations, in turn relinquishing the identity of the pre-merger organisations in favour of the new organisational identity. This research examines the constructs of the pre-merger groups, focusing on the pre-merger ingroups as a significant contributor to success in the post-merger environment. In some M&As, both pre-merger brands continue to operate simultaneously in the post-merger environment, and it is in this context that the ingroup plays an important role in post-merger integration. This research looks at ingroup development within a post-merger joint-brand context in order to assess the significance of ingroup identification within the post-merger environment. Ingroup development involves generating member identification with the pre-merger ingroup, rather than building identification with the post-merger organisation as a whole. Although there is literature to support the continuation of pre-merger ingroup identity in the post-merger environment, ingroup identification has generally been seen as a hindrance to the merger integration process. A New Zealand based case study was examined to explore the significance of ingroup development in the post-merger context. The research looked into the effects of implementing an "ingroup development intervention" within the case study. The research design used forty semi-structured interviews to create a 'before' and 'after' assessment of the case study in order to gauge the effects of the ingroup development intervention. The findings of the research were analysed using thematic analysis, which was able to assess the change in participant perceptions over a period of time. The findings showed that the ingroup development intervention resulted in a perceived reduction in status differences between the pre-merger groups, as well as a reported improvement in both ingroup and intergroup relations. The findings suggest that in a specified context, ingroup development can have a positive effect on the post-merger environment. The results of the research hold implications for both theorists and practitioners. The research provides intergroup theory with a greater understanding of ingroup identification and the extent to which it is effective within the post-merger environment. For practitioners, the research exhibits the value in post-merger organisations committing to long-term identity development for staff.</p>

The Effects of Ingroup Development in a Post-Merger Joint-Brand Context

<p>Mergers and acquisitions (M&As) involve a complex relationship between two previously separate organisations. Social Identity Theory (SIT) has been applied to the study of M&As as a way to better understand this relationship. To date, SIT literature has focused on developing the relationship between the merging organisations, in turn relinquishing the identity of the pre-merger organisations in favour of the new organisational identity. This research examines the constructs of the pre-merger groups, focusing on the pre-merger ingroups as a significant contributor to success in the post-merger environment. In some M&As, both pre-merger brands continue to operate simultaneously in the post-merger environment, and it is in this context that the ingroup plays an important role in post-merger integration. This research looks at ingroup development within a post-merger joint-brand context in order to assess the significance of ingroup identification within the post-merger environment. Ingroup development involves generating member identification with the pre-merger ingroup, rather than building identification with the post-merger organisation as a whole. Although there is literature to support the continuation of pre-merger ingroup identity in the post-merger environment, ingroup identification has generally been seen as a hindrance to the merger integration process. A New Zealand based case study was examined to explore the significance of ingroup development in the post-merger context. The research looked into the effects of implementing an "ingroup development intervention" within the case study. The research design used forty semi-structured interviews to create a 'before' and 'after' assessment of the case study in order to gauge the effects of the ingroup development intervention. The findings of the research were analysed using thematic analysis, which was able to assess the change in participant perceptions over a period of time. The findings showed that the ingroup development intervention resulted in a perceived reduction in status differences between the pre-merger groups, as well as a reported improvement in both ingroup and intergroup relations. The findings suggest that in a specified context, ingroup development can have a positive effect on the post-merger environment. The results of the research hold implications for both theorists and practitioners. The research provides intergroup theory with a greater understanding of ingroup identification and the extent to which it is effective within the post-merger environment. For practitioners, the research exhibits the value in post-merger organisations committing to long-term identity development for staff.</p>

From play to pay: a multifunctional approach to the role of culture in post-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.

Cross-border M&As and technological innovation: the moderating roles of formal and informal institutional distance

Purpose To reconcile the existing contradictory conclusions on the relationship between cross-border mergers and acquisitions (M&As) and innovation, this paper aims to propose a theoretical model of the impact of cross-border M&As on technological innovation and explore the moderating role of institutional distance from the perspective of springboard theory and new institutional theory. Design/methodology/approach Through the use of the two-way fixed effect model and the U-test method, the authors test the hypotheses based on a sample of cross-border M&A events of Chinese manufacturing enterprises during the period from 2006 to 2019. Findings The research shows that there is an inverted U-shaped relationship between cross-border M&As and technological innovation. Furthermore, formal institutional distance moderates the inverted U-shaped relationship in such a way that it reaches its turning point at a smaller scale of cross-border M&As, and the inverted U-shaped relationship is steeper when formal institutional distance is relatively high. The informal institutional distance moderates the inverted U-shaped relationship in such a way that it reaches its turning point at a larger scale of cross-border M&As and the inverted U-shaped relationship is flatter when the informal institutional distance is relatively high. Originality/value The research conclusions integrate heterogeneous views of the existing research, further clarify the influence mechanism and boundary conditions between cross-border M&As and technological innovation, identify the different moderating roles of formal institutional distance and informal institutional distance and enrich the literature on knowledge transfer and recombinant innovation during post-merger integration.

Post-merger integration and subsidiary roles in Chinese MNCs – the case of Chinese M&As in Germany

Purpose This paper adds to the literature on outward Foreign Direct Investments by Chinese Multinational Corporations (MNCs) in advanced economies. Its objective is threefold: to characterize the subsidiary roles that advanced economy targets of Chinese Multinational Corporations (CMNC) takeovers typically adopt, to assess the position that these subsidiary roles grant them within the CMNCs as a whole and to flesh out how subsidiary actors perceive and make sense of the particular constellation as a subsidiary of a CMNC. Furthermore, this paper aims to contribute to theory development on headquarters‐subsidiary relations by suggesting an additional theoretical lens. Design/methodology/approach The paper draws on in-depth qualitative case studies from the automotive, mechanical engineering and solar industries and focuses on German firms that have been acquired by Chinese MNCs. Theoretically, the present paper draws on extant post-merger integration (PMI) and subsidiary role research, particularly from a micro-political and sensemaking perspective, refined by adding a neo-imperial dominance – lens. Findings The paper reveals the subsidiary roles that German subsidiaries of Chinese MNCs typically adopt and discovers the PMI pattern of “reverse integration” delineating quite a particular form of reverse knowledge transfer. Regarding human integration, it emphasizes the importance of neo-imperial attitudes surfacing in the German subsidiaries. Originality/value The value of the paper is in contributing to fill the pending research gap on the subsidiary roles that advanced economy subsidiaries of Chinese MNCs adopt, on the resulting positions of these subsidiaries within the overall Chinese groups and the sense that subsidiary actors make of being acquired by a Chinese MNC. The paper also reveals the importance of neo-imperial dominance patterns and attitudes in PMI in the constellation scrutinized.

Mit Sicherheit zu etwas Neuem: Zur Bedeutung psychologischer Sicherheit in der Post-Merger-Integration (PMI)

ZusammenfassungZahlreiche Unternehmensfusionen in Deutschland scheitern oder bleiben weit hinter den Erwartungen zurück. Besondere Bedeutung für das Gelingen von Fusionen hat die Gestaltung der Post-Merger-Integration, also die Phase des Zusammenführens der beiden vormals selbstständigen Unternehmen. Das von Amy C. Edmondson entwickelte Konzept der psychologischen Sicherheit könnte hierfür eine wichtige Funktion zur Orientierung und Handlungsleitung erhalten. Die erste Auswertung von Ergebnissen einer qualitativen Befragung von acht Post-Merger erfahrenen Beratungspersonen zeigt, dass dieses Konzept in Deutschland bislang noch nicht explizit eingesetzt wurde, aber dazu dienen kann, dass Firmenfusionen erfolgreicher abschließen. Interventionen und Maßnahmen, die hierbei zum Einsatz kommen können, sind gegenüber einer rein betriebswirtschaftlichen Denkart komplexer und machen die Begleitung durch externe Prozessberatende sinnvoll.

M&A successes: Breadth, depth, and deal completion time in the US semiconductor industry

Most previous studies examining M&As (mergers and acquisitions) have focused on the post-merger integration process. While there have been studies that have partially investigated the importance of deal completion, we argue that firms could learn to increase their deal completions by leveraging their experience from prior successful acquisitions and that their cumulative success could reduce the deal completion time; that is, the time from the announcement of the deal to its resolution. To address this unexplored issue about M&As, we investigated whether prior intra- and/or inter-industry acquisition experiences helped accelerate subsequent focal acquisitions in the semiconductor industry, which is characterized by rapid technological innovation. We tested our hypotheses on data consisting of 323 acquisition deals in the US semiconductor industry between 2000 and 2013. The results showed that both prior intra- and inter-industry acquisition experiences significantly reduced deal completion time. JEL CLASSIFICATION M10

Acquisitions of Startups by Incumbents: The 3 Cs of Co-Specialization from Startup Inception to Post-Merger Integration

Facing constant pressures to grow, established firms increasingly harness external innovation by collaborating with and eventually acquiring startups. To succeed in their exit through acquisition, startup firms and incumbents have to master three steps (the “3 Cs”) that enhance the co-specialization with the acquirer: establishing the Complementarity of offerings, generating Customer endorsement, and attracting an acquirer executive Champion. Drawing on a multiple-case, inductive study of seven Israeli startup acquisitions completed by two acquirers from the information and communications technology (ICT) industry, this article illustrates the different approaches pursued by the startup firms and their acquirers to succeed in managing pre- and post-acquisition processes.