Mohammad Faisal Ahammad

The effect of leadership style on talent retention during Merger and Acquisition integration: evidence from China

Leadership and talent retention are critical HR-related components in post-merger and acquisition (M&A) integration, but the extent to which these factors interact with each other and eventually contribute to the success of post-M&A integration is under-explored. The present study investigates the effect of leadership styles on talent retention strategies and on the effectiveness of post-M&A integration in a Chinese context. Based on in-depth examination of an M&A case study, we propose that an authoritative, coaching, task-focused and relationship-focused approach has a positive influence on talent retention and effective post-M&A integration in a Chinese context. As far as talent retention strategies are concerned, authoritative leaders use communication, whereas leaders adopting a coaching style use an incentive structure to positively influence talent retention. Furthermore, task-focused leaders use position and performance in order to identify and retain talented employees. By contrast, relationship-focused leaders emphasize the guanxi network, communication and an incentive structure in their strategies of talent retention.

Top management retention in cross-border acquisitions: the roles of financial incentives, acquirer's commitment and autonomy

Using data from a sample of Cross-Border Acquisitions (CBAs) made by UK firms, the present paper investigates the determinants of top management retention in CBAs. Applying both the theory of relative standing and the financial incentive mechanism of retention, we find that post-acquisition autonomy of the acquired firm and the acquirer’s commitment to the acquired organisation significantly affect top management retention. By contrast, and contrary to conventional wisdom, when interacting with other variables financial incentives may have a negative effect on top management retention. The managerial implications of the findings and directions for future research are also discussed.

Postacquisition Management and Performance of Cross-Border Acquisitions

This study investigates the impact of the postacquisition management process on the performance of cross-border acquisitions (CBAs) using data from a sample of CBAs made by U.K. firms. We find that knowledge transfer to and from the acquired firm is a significant positive determinant of CBA performance. The findings also indicate that the level of integration positively influences CBA performance. There is limited support for the view that employee retention positively influences CBA performance. There is also limited support for the view that organizational cultural differences negatively influence CBA performance.

The double-edged effect of cultural distance on cross-border acquisition performance

This paper investigates the effect of national culture distance on cross-border acquisition performance. In this paper, we hypothesise that culture distance relates negatively to cross-border acquisition performance because it hinders integration capabilities, but that culture distance also elevates the positive association of integration capabilities and cross-border acquisition performance because it provides more learning opportunities that can only be exploited with strong integration capabilities. Empirical tests with a sample of cross-border acquisitions made by UK firms provide reasonable support for the proposed hypothesis. We find that culture distance constrains communication between acquirers and their acquired units, bringing about a negative indirect effect on acquisition performance. However, we also find that culture distance enriches acquisitions by enhancing the positive effects of communication on acquisition performance. Our study provides additional support for a double-edged effect of culture differences on acquisition performance, and illustrates the importance of integration capabilities.

The moderating role of transformational leadership on HR practices in M&A integration

Scant research exists examining the effect of HRM practices on employee behavior in Merger and acquisition (M&A) integration and the role that leaders play within this. This paper develops a conceptual framework that focuses on the moderating role of transformational leadership on the achievement of human integration and organizational identification in M&A integration. We argue that communication, employee involvement, teamwork, and training and development have a positive effect on employee behavior and their identification with the newly formed organization. Moreover, we argue that transformational leadership behaviors will moderate the implementation of HRM practices in M&As, leading to positive employee behavior and employee identification in the new organization. We suggest that further research is necessary to test propositions of the present study in order to achieve finer-grained understanding of the role of transformational leadership on the achievement of human integration and organizational identification in M&A integration.

Special issue of International Journal of Human Resource Management: Organizational ambidexterity and human resource practices

Ambidexterity has been shown to be an important factor for enhancing overall firm performance (Junni, Sarala, Taras, & Tarba, 2013; Turner, Swart, & Maylor, 2013). Organizational ambidexterity can be defined as the capability to concurrently pursue both exploration and exploitation, and make changes resulting from the adoption of multiple, contradictory processes within the same firm (O’Reilly & Tushman, 2004). The challenge of ambidexterity lies in harmonizing the organization’s strategy with its resources and capabilities (Raisch & Birkinshaw, 2008), such as human resource management practices (McClean & Collins, 2011; Prieto & Pilar pérez santana, 2012; Ahammad, Lee, Malul, & Shoham, 2015), managerial mechanisms and HRM architecture (Huang & Kim, 2013; Turner & Lee-Kelley, 2013), team exploratory and exploitative learning (Dixon, Meyer, & Day, 2007; Kostopoulos & Bozionelos, 2011), intellectual capital architectures (Kang & Snell, 2009), organizational culture (Wang & Rafiq, 2014) and leadership (Nemanich & Vera, 2009). A number of scholars have explored how top management team (TMT) characteristics and actions influence organizational ambidexterity (Simsek, 2009). For instance, it has been contended that organizational ambidexterity is augmented when TMT cognitive frames take both exploration and exploitation into consideration (Smith & Tushman, 2005), and when the TMT is behaviorally integrated and united (Lubatkin, Simsek, Ling, & Veiga, 2006). Rather similarly, Jansen, George, van Den Bosch and Volberda (2008) examined the role of TMT attributes and leadership behavior in integrating contradictory demands among senior managers in trying to attain organizational ambidexterity. They arrived at the conclusion that transformational leadership enhances the effectiveness of TMT characteristics in ambidextrous organizations, and that it facilitates the effectiveness of TMT social integration. Recently, Patel, Messersmith and Lepak (2013) examined the extent to which a specific kind of human resource management system (e.g. highperformance work system) may serve as an antecedent that enables firms to develop firm ambidexterity. They found that high performance work systems were related to higher levels of organizational ambidexterity. There has been substantial, though often inconsistent, and even contradictory research on approaches to managing the conflicts between exploration and exploitation (Birkinshaw & Gupta, 2013). For instance, Kauppila (2010) stresses the importance of

Explaining the surge in M&A as an entry mode: home country and cultural influences

Prior studies examining the effects external factors on international market expansion have focused on host country factors with scant attention being given to home country factors. This study examines the trends, patterns and the impact of cultural and home country macroeconomic influences on Chinese cross-border mergers and acquisitions (CBM&A) as an entry strategy for the period of 1998-2011. Our findings indicate that CBM&A is the preferred mode of market entry by the Chinese emerging market firms. The regression results indicate that home country macroeconomic and cultural variables, including GDP, money supply, interest rates, inflation, acquisitions in resource seeking sectors and cultural distance play an important role in explaining the foreign market expansion of Chinese firms.

R&D capabilities, intellectual property strength and choice of equity ownership in cross-border acquisitions: evidence from BRICS acquirers in Europe

The aim of the study is to investigate two relatively underexplored factors, namely, the R&D (research and development) capabilities of target firms and the strength of intellectual property (IP) institutions in target economies, that influences the choice of equity ownership in cross border acquisitions (CBAs) undertaken by multinational enterprises (MNEs) from BRICS (Brazil, Russia, India, China and South Africa) economies. They developed the key hypothesis on foreign market entry through CBAs by incorporating insights from transaction costs economics, the resource-based view and institutional theory to investigate the determinants of full versus partial equity ownership. Using logistic regression estimation methods to a sample of 111 CBA deals of BRICS MNEs in 22 European countries, it was found that BRICS MNEs were likely to pursue full rather than partial acquisition mode when target firms have high R&D capabilities. However, the greater the degree of strength of IP institutions in target economies and higher the target firms’ R&D capabilities, the more likely it is for BRICS MNEs to undertake partial, rather than, full acquisition mode. They provided interesting theoretical insights and managerial implications that might underlie some of the key findings on CBAs by emerging market MNEs.

Dynamic marketing capabilities, foreign ownership modes, sub-national locations and the performance of foreign affiliates in developing economies

Purpose The purpose of this paper is to examine the role of dynamic marketing capabilities (DMC), foreign ownership modes and sub-national locations on the performance of foreign-owned affiliates (FOAs) in developing economies. Design/methodology/approach Based on a sample of 254 FOAs in the Indian manufacturing sector (covering the period of 2000-2008 leading to 623 firm-year observations), the empirical paper adopts the panel data regression approach. Findings The study confirms the significant importance of DMC to assist FOAs to gain better sales performance in an emerging market such as India. The findings indicate that wholly owned foreign affiliates (WOFAs) have better sales performance than international joint ventures (IJVs), and majority-owned international joint ventures (MAIJVs) perform better than minority-owned international joint ventures in the Indian manufacturing sector. The results confirm that effective deployment of DMC leads to better sales performance in WOFAs and to some extent in MAIJVs. Perhaps the most interesting finding is that developing DMC in non-metropolitan areas is associated with higher sales growth than in metropolitan locations. Originality/value The study contributes to the literature by examining the impact of DMC on performance of FOA by considering the organised manufacturing sector in a large and fast growing developing economy. In addition, the results for the moderating effects provide novel evidence of the conditions under which DMC of FOA interact with different ownership modes and influence firm performance.

Equity Ownership in Cross-border Mergers and Acquisitions by British Firms: An Analysis of Real Options and Transaction Cost Factors

The authors investigate the factors influencing the share of equity ownership sought in cross-border mergers and acquisitions (CBM&As). Drawing on real options theory and transaction cost economics (TCE), they address and hypothesize key factors linked to commitment under exogenous uncertainty and the separation of desired and non-desired assets’ influence on share of equity sought by acquiring firms in CBM&As. Empirical analysis based on 1872 CBM&As undertaken by British firms in both developed and emerging economies shows that British MNEs are more likely to pursue a partial acquisition in a target foreign firm when those foreign firms are from culturally distant countries. Further, findings support the view that the high cost of separating desired assets from non-desired assets motivates firms to make a partial acquisition rather than acquire the target completely. This is one of the first studies to use real options theory to address the cost of commitment under exogenous uncertainty, as well as TCE logic to address the separation of desired and non-desired assets in the target firm while analysing equity ownership sought in CBM&As. Empirically, this paper contributes by examining CBM&As by British firms in both developed and emerging markets.