Business acquisition, resource redeployment, and asset divestiture are elements of a dynamic process in which firms change their businesses by recombining internal and external resources. Analyzing 253 horizontal acquisitions, we show that post-acquisition resource redeployment leads to asset divestiture from the business that receives the redeployed resources, but not from the business that contributes the new resources. Consistent with scale economies rationales, we find that strategic similarity also leads to greater asset divestiture from the target firms. Many theoretical perspectives are skeptical about the positive rationale for acquisitions and many of these believe that asset divestiture is evidence of acquisition failure. Our arguments and analysis help refine the accepted wisdom. In particular, the pattern of resource redeployment and asset divestiture in our analysis suggests that acquisitions provide a means of reconfiguring the structure of resources within firms and that asset divestiture is a logical consequence of this reconfiguration process. Copyright © 2001 John Wiley & Sons, Ltd. This study examines the causes of asset divestiture following horizontal acquisitions. Asset divestiture is the partial or complete sale or disposal

This paper examines the effects of resource complementarity and organizational compatibility on merger and acquisition (M&A) outcomes. We also explore the effect of firms ' previous M&A experiences. Our investigation focuses on two classes of events following M&As: organizational dissolution and involvement in subsequent M&As, with the firm continuance following the M&A as the “non-event. ” Using a multinomial logit model for repeated-event history analysis that reflects the dynamics of organizational evolution, we analyse 461 M&As in the history of the Dutch accounting industry. Our results show that compatibility is not associated with the dissolution rate but is strongly related with the probablity that a firm will engage in additional M&As. Resouce complementarity is negatively associated with the odds of dissolution and positively associated with the probability to engage in additional M&As. The results also indicate that previous M&A experience enhances both the dissolution rate and rate to engage in additional M&As. 2

Most research of post-acquisition integration examines integration of individual business units. The research pays less attention to corporate level integration processes, by which we mean the standardization of integration routines and synchronization of integration activities across a firm's business units. We argue that corporate level acquisition activities and post-acquisition integration processes strongly influence long term corporate performance, particularly as a firm which comprises interdependent business units becomes geographically diffuse. Acquisitions tend to increase system diversity and goal diversity across business units. Some goal diversity is beneficial, but excessive goal diversity and the existence of system diversity can reduce long run corporate performance by requiring greater managerial effort and increasing the opportunity cost of managerial efforts. The negative effects become stronger as a firm becomes geographically diffuse or if business units are interdependent. Firms that employ active corporate level integration processes – particularly firms that acquire frequently and have interdependent business units – can enhance the benefits and eliminate some of the problems of diversity. Many studies have examined post-acquisition integration. Questions include how acquiring firms

The implications of several strands of the spatial geography literature suggest that firms incur substantial costs when they implement geographically distant acquisitions, where implementation costs arise both from searching for potential targets and from undertaking post-acquisition integration. In turn, the prescriptive literature on acquisitions strategy often suggests that firms should seek geographically proximate targets, especially while they gain acquisition experience, in order to limit implementation costs that have the potential to crowd out gains from acquisitions. To date, however, we lack systematic research examining whether expected implementation costs lead acquirers to prefer nearby targets and, if so, how acquisition experience or other factors may reinforce or reduce any such tendency. Indeed, there is no assurance that desirable targets will be located near acquirers, while anecdotal evidence suggests that some firms, at least, undertake distant acquisitions, even early in their acquisition experience. This study examines how the distance between acquiring and target firms influences target selection, exploring conditions under which acquirers exhibit a greater preference for geographically proximate targets and when they seek more distant targets. The study examines 2,070 domestic U.S. acquisitions from 1980 to 2004 by 767 US chemical manufacturing firms founded after 1979. The core conclusion of the study is that distance has a strong and persistent effect on target selection

This paper offers a refined conceptualization of consensus formation and demonstrates in three organizations how this conceptualization enables us to uncover new patterns of consensus building. It describes a longitudinal study which investigated consensus formation in three organizations undergoing major strategic change. The study explored whether consensus building occurred during the strategic change, and if so, how. Initial participants of consensus were also investigated as well as changes in the scope of participants in consensus. Consensus building did occur, but contrary to some views, less through an increase in the strength of consensus and more through an increase in the scope of consensus. Additionally, initial consensus was not located among members of the top management team, but more within an interest group whose members benefited from the given direction of the change.

Abstract 1 Mergers and acquisitions are not only economic decisions but can also be understood as social processes. Acquisition researchers often have a financial argument to justify their research, no matter their research focus. Social processes are mostly studied to find out why the acquisition failed and to find a formula to avoid future failures. In the literature one will often find representations of acquiring managers rather than the whole organisation. One could therefore describe most acquisition research as single-voiced rather than multi-voiced. Another common focus in the literature is that of integration. Acquisition researchers often describe the acquisition process as a unifying process. They prescribe that managers should manage the integration process so that the merging companies should become one with a consensus culture. The focus of this review is to identify a gap, the lack of certain social processes and of multi-voiced representation in that acquisition literature; that is, statements of ambiguities and ambiguous situations. 1 This review is based on chapter two and three in Risberg (1999) Ambiguities Thereafter – An interpretive approach to

Drawing on research on the value drivers in mergers and acquisitions, as well as work on knowledge transfer in multinational corporations, we present an integrative model of the socio-cultural antecedents of strategic capability transfer in cross-border acquisitions. Its basic premise is that the impact of national cultural differences on the strategic capability transfer success in acquisitions is mediated by the degree of social integration, the ability of the acquired organization to absorb capabilities from the acquirer, and the existence of capability complementarities. Under this perspective, cultural differences can be viewed as enhancing the combination potential in acquisitions, as well as a source of social integration problems and difficulties in absorbing capabilities. Furthermore, the model proposes that the perceived attractiveness of the acquirer and the use of formal and informal integration mechanisms affect the capability transfer through their impact on the social integration of the combining organizations. It is argued that this model provides us with an overall framework through which one can better understand the linkages and causal relationships between national cultural differences and capability transfer. Future empirical work is encouraged to validate and/or refine the various testable propositions.

In this paper we apply the concept of inter-organizational fit to the use of global account management programs in multinational corporations. It is predicted that greater fit between vendor and customer on a variety of strategic as well as structural aspects will result in higher performance of the relationship. This is contrasted with a bargaining perspective approach to managing customer relationships. Support for the hypotheses is found using a survey of 106 global account managers in 16 multinationals. 2