Creating Value in Cross-Border M&As through Strategic Network

Abstract

M&As provide unique opportunities for the acquirer to grow rapidly, to gain new capabilities which an organisation might otherwise find difficult to develop on its own, and to gain access to new markets (e.g. Haspeslagh and Jemison, 1991; Hitt et al., 2001). Recent trends indicate that cross-border mergers and acquisitions (M&As) keep increasing following the double-dip recession (World Investment Report, 2014). While M&As have become increasingly popular as a method of organisational growth and development, the acquisition success rate has remained mediocre at best. Accordingly, M&A success and value creation have been at the heart of M&A research and have been approached from various disciplines (cf. King et al., 2004; Cartwright and Schoenberg, 2006; Schoenberg, 2006; Degbey, 2015). A number of scholars have tried to explain cross-border M&A failure through external issues, such as national cultural differences, but the results have been inconclusive (cf. Teerikangas and Very, 2006; Stahl and Voigt, 2008), and it has been argued that the effect of culture on M&A performance is mediated by the post-acquisition integration strategy, the acquisition experience and integration capabilities of the acquirer, and the level of integration (e.g. Morosini and Singh, 1994; Slangen, 2006; Dikova and Sahib, 2013). However, a growing body of literature on post-acquisition integration has focused on internal issues, that is, the human side, and argues that M&A failure is largely down to socio-cultural challenges such as change resistance, acculturation stress and so forth (e.g. Buono and Bowditch, 1989; Datta, 1991; Cartwright and Cooper, 1993; Very et al., 1996; Birkinshaw et al., 2000; Stahl and Voigt, 2008).