Duncan Angwin

Mergers and acquisitions across European borders: National perspectives on preacquisition due diligence and the use of professional advisers

Recent years have seen a huge growth in European cross-border mergers and acquisitions (M&A) and considerable attention has been given to how such deals arise and are completed. However, most theoretical emphasis has been placed upon noncultural factors although it is increasingly recognized in other spheres of management theory that management styles and business performance cannot be separated out from national or regional cultural influence. As a consequence, this exploratory study focuses upon the influence of national differences in business culture upon preacquisition management. In this paper we report the findings of a large-scale exploratory survey into whether such cultural differences are reflected in different perceptions of the value of due diligence and the use of professional advisors in the preacquisition phase. The findings suggest that national cultural differences do play an important role in affecting acquirers perceptions of target companies and we suggest that this may have important consequences for the negotiation of deals and the subsequent management of the postacquisition phase.

Introduction to the Special Issue. 'Connectivity' in Merging Organizations: Beyond Traditional Cultural Perspectives:

This editorial provides an introduction to the themes of this special issue on ‘connectivity’ in merging organizations. The growing impact of mergers and acquisitions on organizations, industries and economies has generated substantial research interest in the ensuing change processes from strategic, human resource and cultural perspectives. However, this research has focused on certain perspectives and failed to interrogate others. In the case of the cultural perspective, researchers have tended to focus on cultural differences between merging firms and how these differences may be bridged. This focus has provided important insights into the dynamics of these processes, but at the same time has constrained our appreciation of the richness of connectivity between organizations and their contexts as well as clouded our efforts in developing new concepts and angles for research. Through the focus of the special issue on connectivity, the strengths and limitations of the cultural paradigm in M&A research will be debated and a research agenda for the future suggested.

HRM issues and outcomes in African mergers and acquisitions: a study of the Nigerian banking sector

Despite the increasing number of mergers and acquisitions (M&A) taking place in Africa, research of this phenomenon, particularly in this continent, is extremely scarce. There is also growing awareness amongst researchers of the importance of human resource management (HRM) practices in general throughout the merger process. This makes an enquiry into its role in this context opportune. By analysing the recent M&A wave in the Nigerian banking sector, this paper explores HRM practices throughout the M&A process. Through interviews of key informants in each merging bank, key HRM practices are identified and conclusions drawn about their contribution to overall M&A outcomes. Implications for theory and practice are discussed and future research directions offered.

Connecting Up Strategy: Are Senior Strategy Directors a Missing Link?

With companies being exhorted to become more strategically agile and internally connected, this article examines the role of the Senior Strategy Director, the executive tasked specifically with internal strategy. In particular, it explores what they do, what specific capabilities they deploy to enable effective contribution to the company, and in what ways they facilitate the connectedness of strategy. An analysis of multiple interviews over time with Senior Strategy Directors of large companies shows the vital and challenging role these executives play in both shaping, connecting up, and executing strategy. This article identifies the particular capabilities necessary for Senior Strategy Directors to perform their role and shows how it all depends upon their skilful deployment. These findings have significant implications for understanding unfolding micro-processes of strategy in large organizations, for assumptions about the skills and capabilities necessary to be an effective Senior Strategy Director, and for business schools in terms of the content and style of strategy courses they provide.

Motive Archetypes in Mergers and Acquisitions (M&A): The Implications of a Configurational Approach to Performance

Why do managers continue to transact merger & acquisition (MA 1) each MA 2) no other reasons for an MA 1) demonstrating a broader set of motivations for MA 2) establishing their legitimacy; 3) showing that motivations may not be singular in nature but intertwined and complex; 4) presenting a way in which this greater complexity may be conceived in order for more sensitive empirical tests to be performed.

How communication approaches impact mergers and acquisitions outcomes

Communication is generally viewed as a critical component in mergers and acquisitions (M&A) performance, yet surprisingly little research has examined the link between different communication approaches and M&A outcomes. This paper provides a systematic empirical study to evaluate the link between communication approaches and M&As outcome. Specifically, a typology is created to examine interaction between the process and content of communication and M&A outcomes, in terms of employee commitment to merged organization strategy and M&A survival. Using data drawn from a single clearly defined M&A wave in the Nigerian banking sector, different communication practices are related to M&A outcomes. The findings are the first to show the effects of communications practices in African M&A and answer the calls for extending M&A research beyond western developed countries. They confirm the importance of communication practices in M&A, extend earlier findings on the importance of post-acquisition integration communication in US and European contexts and show the importance of communicating throughout the whole M&A process.

The Effect of Routine Amalgamations in Post-Acquisition Integration Performance: Whether to ‘Combine’ or ‘Superimpose’ for Synergy Gains?

Abstract Post-acquisition integration matters for overall M&A outcome. However within this phase researchers have struggled to identify clear links between integration activities and post-acquisition outcome. This may be due to using organisational levels of analysis, where sub-organisational issues serve to confound findings. In order to unpack the post-acquisition phase, and to delve more deeply into organisations, this paper adopts a more granular perspective on integration activities by focusing upon the building blocks of organisations. Specifically we investigate ordinary routine amalgamation and their impact upon meta-routine outcome during acquisition integration. Drawing upon two longitudinal integration cases and using ‘retroductive’ analysis, two types of amalgamation are identified, namely ‘combination’ and ‘superimposition’. We find that, while the basic nature of routines, such as multiplicity and nestedness, inhibit routine amalgamation, external interference in the form of context, structural change or introduction of additional routines is needed to stabilise amalgamated routines. From our findings we are able to suggest a number of testable propositions about the factors that influence the amalgamation of routines. This empirical study contributes to the M&A literature by opening up the ‘black box’ of post-acquisition integration by providing details at a granular level of what actually happens during integrations.

Acquiring poorly performing companies during economic recession : insights into post-acquisition management

At this time of recession, many companies are performing badly and some become acquisition targets. Once acquired, the General Manager needs to consider how to turn around the acquired company. Existing studies of turnarounds suggest a uniform approach to the early stages of management, but this is based on analysing stand-alone companies rather than acquired ones. Amongst acquisitions it is well known that there are different integration styles, but studies of mergers and acquisitions have not focused upon how poorly performing companies are managed. This paper asks (1) should acquired companies in poor financial health be managed as other acquired companies and (2) should they follow turnaround literature prescriptions? Using a novel mixed method approach, cluster analysis techniques reveal the existence of two distinct integration strategies for poor performing target companies, and qualitative interviews provide explanation of these findings. For General Managers this means that their strategy options should not be limited to the ‘classic’ turnaround strategies set out in the existing literature but should recognise that there are different ways to manage poor health acquisitions.

Testing the self-selection theory in high corruption environments

Purpose: Whilst substantial evidence from low corruption, developed market environments supports the view that more productive firms are more likely to export, there has been little research into analysing the link between productivity and exports in high corruption, developing market environments. The purpose of this paper is twofold. First, to test the premise of self-selection theory whether the association between productivity and export is maintained in high corruption environments, and second to identify other variables explaining export activity in high corruption contexts, including cluster networks and firms’ competences. Design/methodology/approach: The authors draw on the World Bank Enterprise survey to undertake a cross-section analysis including 1,233 SMEs located in nine African countries. The advantage of this database is that it contains information about the level of perceived corruption at firm-level. Logistic regressions are performed for the full sample and for subsamples of firms in high and low corruption environments. Findings: The findings demonstrate that the self-selection theory only applies to low corruption environments, whereas in high corruption environments, alternative factors such as cluster networks and outward looking competences, exert a stronger influence on the exporting activity of African SMEs. Research implications/limitations: This research contributes to theory as it provides evidence that contradicts the validity of self-selection theory in high corruption environments. Our findings would benefit from further longitudinal investigation. Practical implications: African SMEs need to consider cluster networks and outward looking competences as important strategic factors that might enhance their international competitiveness. Originality/value: Our criticism of the self-selection theory is distinctive in the literature and has important implications for future research. We show that the contextualisation of existing theories matters and this opens a research avenue for further more sensitive contextualisation of existing theories in developing economies.

THE MANAGING EXECUTIVE IN POST-ACQUISITION MANAGEMENT

Managing Executives occupy a pivotal role in the acquisition process. It is virtually inconceivable that major Merger and Acquisitions (M&As) could proceed without their personal sponsorship (Hayward & Hambrick, 1997). They are central to the negotiation and signing for such deals and it is these negotiations that raise questions over how the target company should be run post-acquisition, how it should be configured to fit within the newly expanded group and what sort of strategy may be appropriate for the future. Managing Executives embody their firm’s strategies and so are intimately connected with these issues of organisational fit and strategic rational. With negotiations focussed upon the future of their businesses and their personal places in corporate history, these contests can be very dramatic. The high stakes are evident in the substantial levels of acquired Managing Executive departure post-acquisition. Whilst we can observe that many acquired Managing Executives subsequently leave the enlarged firm, little evidence to date answers the question of why they have been retained or replaced?