Satu Teerikangas

The Culture-Performance Relationship in M&A: From Yes/No to How

Do cultural differences have an impact on the performance of M&A? Despite the widely accepted myth that they do, and in a negative way, a review of extant research provides contradictory findings. In this article, we explore reasons for this contradiction and propose solutions in the form of propositions and a theoretical framework. We begin with a brief overview of extant research on the culture-performance relationship in M&A. In light of the contradictions emerging from this review, we move on to identifying three areas of complexity explaining this confusion, and for each one, we suggest propositions to guide future research. We then summarize our argument using a theoretical framework. Because of the long-term and dynamic nature of the M&A process, we argue that instead of studying the simple performance impact of cultural differences in M&A, we should move on to thinking how cultural differences impact on the M&A process and its outcome.

Dynamics of Acquired Firm Pre-Acquisition Employee Reactions

Based on a qualitative, large-scale, interview-based inductive study of eight acquisitions conducted by Finnish multinationals, this article develops a grounded model of the dynamics of acquired firm employee reactions preceding related, industrial cross-border acquisitions. In contrast to most merger and acquisition (M&A) research portraying employee reactions in times of M&A in a negative, stressful light, the present findings shed a contradictory light on this discourse. In six of the studied acquisitions, pre-acquisition employee reactions tended toward motivation rather than uncertainty. The underlying reason was that these acquisitions were perceived as opportunities instead of threats in the target firms. As a result, target firm management became proactively involved in promoting the acquisition’s success. The author terms this target behavioral responsiveness and found it to result from (a) “static” factors (partner organizational attractiveness and target cognitive responsiveness) as well as (b) “dynamic” factors (partner behavioral attractiveness and target strategic responsiveness). Intriguingly, the dynamic factors were found to have a stronger predictive impact on target behavioral responsiveness. Indeed, in two of the acquisitions, their low ranking on static factors was countered by a high ranking on dynamic factors, namely, attractive partner behaviors and a strategically responsive target. Employee reactions to a forthcoming acquisition are thus not the deterministic result of the change itself, but can be influenced through buying firm behaviors and positive future intentions as well as the target experiencing a need to be acquired. Implications for M&A research are discussed, and a model and propositions to guide future research are suggested.

Cross-cultural management in mergers and acquisitions – Editorial

The cross-cultural factor in Mergers and Acquisitions (M&A) success has been the subject of contrasting views, and contradictory and confusing findings. This Editorial discusses the issues involved before introducing the papers published on this theme in this issue.

Leading M&As in a Middle Managerial Role: A Balancing Act

This chapter explores middle managers as agents and recipients of change when involved in mergers and acquisitions. We capture the characteristics of middle managers, who, when faced with such radical organisational change, not only have to personally thrive amidst this change, but, moreover, must act as the driving force of this change. The middle managerial challenge is embedded in this double-hatting—simultaneously delivering, while personally living through the same change. We argue that middle managers’ development towards leadership positions depends on their ability to personally undergo and lead such changes when and where they arise. This requires learning to both implement change and personally make sense of change. Going forward, we call for more attention to be given to the ‘inner world’ of change agents.

Mergers, acquisitions and the evolution of construction professional services firms

Whilst mergers and acquisitions are a favoured means of strategic renewal and expansion for firms, scant academic attention has been given to the growth patterns of construction professional services firms (CPSFs). The role of mergers and acquisitions in the evolution of CPSFs is examined. The findings are based on an analysis of the growth patterns of the top 25 CPSFs in the United Kingdom between 1988 and 2013. Since the 1990s, the increase in merger and acquisition activity has shaped the size, international presence, and multidisciplinary reach of the major CPSFs. However, CPSFs differ with respect to the intensity with which mergers and acquisitions are pursued. Whilst large, public limited companies are active acquirers, smaller and/or privately owned firms succeed in growing with a more selective acquisitive strategy, as they tend to rely more on organic growth. The findings call construction economists to attend to how acquisitions are radically changing the construction landscape and its main players. As the competitive advantage of firms is increasingly human capital-based, the example of the privately owned CPSFs that rely on organic modes of growth prompts a critical rethink of the role of mergers and acquisitions in firm growth.