Laurence Capron

The long‐term performance of horizontal acquisitions

This paper examines how value is created in horizontal mergers and acquisitions. More specifically, it examines the impact of post-acquisition asset divestiture and resource redeployment on the long-term performance of horizontal acquisitions. The data come from a detailed survey of acquiring firm managers and cover 253 horizontal mergers and acquisitions that were initiated by European and U.S. firms in manufacturing industries for the period 1988–1992. This study incorporates insights from the cost efficiency and resource-based theories to propose a model of the effects of asset divestiture and resource redeployment on long-term acquisition performance. Overall, our results show that both asset divestiture and resource redeployment can contribute to acquisition performance, with, however, a significant risk of damaging acquisition performance when the divested assets and redeployed resources are those of the target. Copyright

State Capacity, Minority Shareholder Protections, and Stock Market Development:

We investigate how state capacity—the administrative ability to formulate and implement policy—affects the institutional adoption of new policies and the decoupling of those policies from their original purpose in the face of pressures from professions, multilateral agencies, and imitation among countries. We expect state capacity to reduce the effect of professional and imitation influences, to increase the impact of coercive effects by multilateral agencies, and to lessen decoupling between policies’ adoption and desired outcomes. We tested these predictions using a unique longitudinal dataset on the adoption of minority shareholders’ legal protections and the development of the stock market in 78 countries between 1970 and 2011. We found evidence consistent with the moderating effects of state capacity on institutional adoption and on lessening policy–practice decoupling. Our findings suggest that the strength of state capacity influences which policy models policymakers select and adopt, whether they implement them effectively, and what the consequences of such adoption are.

Outcomes of international telecommunications acquisitions: Analysis of four cases with implications for acquisitions theory

Laurence Capron and Will Mitchell summarise crossborder telecommunications acquisition activity in the US and Europe during the past decade and report a detailed survey of four cross-border horizontal acquisitions that occurred in the telecommunications equipment manufacturing sector between 1988 and 1992. They discuss the context, post-acquisition activities, and outcomes of the four acquisitions. The acquisition context includes industry characteristics, target characteristics, target strengths, and acquisition motives. Post-acquisition activities include several dimensions of business restructuring, resource redeployment, and creation of integration mechanisms. Acquisition outcomes include impact on business capabilities, financial performance, and judgments of overall success. They conclude that the results provide much stronger support for strategic reconfiguration and production efficiency explanations for horizontal acquisitions than they do for market power, target mismanagement, or resource appropriation explanations.

Cisco's corporate development portfolio: a blend of building, borrowing and buying

Purpose – This paper aims to present a case study of Ciscos corporate development approach which shows how the company built a powerful new business capability: the discipline of selecting the best pathways – build, borrow or buy – to follow when pursuing growth opportunities.Design/methodology/approach – In order for companies to achieve viable growth, business leaders must evaluate all three alternative pathways, which this paper looks into.Findings – The paper revelas that Cisco provides an excellent example of a company that has, over the years, learned how to develop the capability to use the full range of development modes.Research limitations/implications – This case is based on research for Build, Borrow or Buy: Solving the Growth Dilemma by Laurence Capron and Will Mitchell.Practical implications – In the way it blends all of the growth modes, Cisco demonstrates the value of top‐level leadership for what should be seen as an enterprise discipline: strategically coordinated building, borrowing an...

Strategies for M&As: when is acquisition the right mode to grow?

This paper examines the conditions under which an acquisition makes sense compared with alternative modes of resource-sourcing such as internal development, licensing and alliances. Drawing on the transaction costs economics and capability views, it presents governance and knowledge reasons for choosing an acquisition over alternative modes of sourcing. While firms may have preferences for using M&A over alternatives, it is important to review and balance carefully the different resource-sourcing modes.