You Wei and Wu Wei: Ambivalence of Chinese outbound mergers and acquisitions

China is assuming an increasingly prominent position in the world economy as the investment begins to flow from China to the world. Compared to the ‘West goes to China’, the institutional environment, the cultural roots and the corresponding managerial behaviours are quite distinct. These distinct characteristics may challenge the conventional wisdom in the dominant mainstream theories of international business and multinational strategy. Based on both quantitative study, multi-case studies and over 50 interviews with Chinese and Western professionals, this thesis reflected the ambivalence of the government and Chinese companies in outward M&As. While the Chinese government shows a You Wei attitude towards outward M&As, You Wei acts on outward M&As in an ambivalent manner. On the one hand, the You Wei government positively facilitates outward technology exploration as an essential part of the technology development in China’s high-speed rail industry; on the other hand, the You Wei government distorts the capital allocation for outward M&As between SOEs and POEs, and compensates for the loss by SOEs through low-cost debt financing. Similarly, Chinese companies behave ambivalently towards outward M&As. On the one hand, Chinese companies display a You Wei strategy, proactively coping with the various domestic stakeholders in the M&A legitimization process; on the other hand, they manifest a Wu Wei action, effortlessly dealing with post-acquisition integration in developed economies. Overall, the ambivalence of outward Chinese M&As is characterized by a typical Chinese "both/and" and interdependent opposites’ managerial paradigm

Factors affecting subsidiary level capability transfer in acquisitions

This research identifies the factors affecting capability transfer at the subsidiary level during acquisitions. Acquisitions provide acquiring firms with the opportunity to acquire new capabilities and to apply current capabilities in new settings and in doing so improve the firm’s competitiveness. Capability transfer, therefore, is critically important for acquisition performance. Limited subsidiary level analysis has been conducted on the factors affecting capability transfer during acquisition.The study identifies implementation factors, socio-cultural factors, management practices and absorptive capacity as the key factors affecting capability transfer. To exploit and enhance these factors, strong leadership is required to create the atmosphere necessary for capability transfer though the creation of a common vision and shared identity. Aligned performance measures channel the stakeholder behaviour towards capability transfer and the achievement of acquisition objectives. Training intervention and support facilitate the contribution of retained employees to the combined firm.Understanding the key factors affecting capability transfer allows managers to better approach capability transfer in acquisitions. Managers are then in a better position to formulate appropriate and comprehensive strategies to ensure successful transfer.Dissertation (MBA)--University of Pretoria, 2012.Gordon Institute of Business Science (GIBS)unrestricte

Triggering Innovation Through Mergers and Acquisitions:The Role of Shared Mental Models.

In this article, we analyze how shared team and task mental models, developed prior to an acquisition, affect exploration and exploitation activities in the postacquisition phase, and how these effects are dependent on relative size. With a sample of 101 transactions of acquirers from the German-speaking part of Europe, we provide empirical evidence that both shared team and task mental models positively influence exploitation activities following an acquisition, whereby only shared team mental models (TMMs) are beneficial for exploration. We provide empirical evidence that shared mental models in terms of task and team are an important informal source for enhancing exploration and exploitation innovation activities. However, this source of informal coordination is contextual. Although the relationships on exploitation are stable, the beneficial effect of TMMs on exploration is sensitive and devitalized by an increasing relative size. Implications for further research and management practice are given. [ABSTRACT FROM AUTHOR

Investigating the Impact of Target Firm Members’ Trust Antecedents on the Perofrmance of Cross-border Acquisition (CBA)

Cross-border acquisitions (CBAs), as organisational entities which are formed and controlled by foreign firms, are one of the most effective methods of expansion available to international firms. Cross-border acquisition is a highly complex and multi-faceted business model which presents several challenges for management. Over the past several years, CBA has become a more frequent target for research in business, and has received significant attention from academia and practitioners alike. The aim of this research is to investigate the factors that impact interorganizational trust and as an outcome, the performance of CBAs in Iraq and the United Arab Emirates (UAE). According Fadol and Sandhu, (2013), Abosag and Lee, (2012), there are few studies that focused on alliances in Middle Eastern countries and more studies on these areas are required. The empirical study is preceded by a review of the existing literature that led to the development of a conceptual framework for this research. The target population samples for this research were collected from four target firm’s employees in Iraq and the UAE, where those firms were identified as having acquired by firms from Western Europe and Asia. The research tool used to collect the necessary data was a survey questionnaire, and the data analysis was undertaken using SPSS and Structural Equation Modelling (SEM). The findings of this study identify that relationship history, inter-firm distance, and integration approach factors have a positive impact on the level of target firm members’ trust; while factors such as collaboration history, complementarity, and autonomy preservation were not found to have a positive and significantly related to the trust. Moreover, Country risk was found to have a negative and significant relationship with the trust. Religion was not found to be positive and significantly related to the trust. Furthermore, positive relationship between trust and performance and between commitment and performance were found. The results of this study offer a framework that identifies the key factors in the development of trust within CBAs and demonstrates that this trust and it’s antecedents have a significant impact on firm performance in Middle Eastern countries such as Iraq and UAE. The findings of this study offer us implications for meaningful managerial practice in selecting cross-border competitors as target firms

인수기업의 창의성은 더 나은 M&A 성과를 창출하는가? 기업수준 창의성의 측정과 조작화

학위논문 (석사) -- 서울대학교 대학원 : 경영대학 경영학과, 2020. 8. 박남규.This paper investigates the effects of an acquirers creativity on post-M&A knowledge creation by analyzing the contents of the press releases issued by the acquiring firms. I apply and advance the prior management researches on creativity, integrating fundamental constructs and perspectives of them. The main argument is that creative companies will produce better performance after the M&A than non-creative companies when the industry relatedness between the merging firms is low. My theoretical framework was examined empirically across a sample of 251 M&As for ten years from 2005 to 2014. The results show several notable findings. First, the industry relatedness of acquired firms to their acquirers has no statistically significant influence on knowledge creation after the M&A. Second, the creativity of the acquiring companies facilitates post-M&A knowledge creation by the targets. Third, the more prominent the differences in the industries of the merging firms, the more noticeable the positive impact of creativity on knowledge creation. These findings indicate that corporate creativity is not only a source of new ideas but also a core resource for dealing with demanding issues such as unrelated mergers and acquisitions.본 연구는 인수합병의 성패에 영향을 미치는 핵심 요인을 분석하기 위해, 인수기업의 창의성이 피인수기업의 지식창출에 미치는 영향을 분석한다. 특히 질적연구에 의존하던 창의성에 관한 기존연구에서 더 나아가, 2005년부터 10년간 발생했던 251건의 M&A 표본을 기초로 기업의 창의성 수준을 내용분석법(content analysis)을 통해 추론하고 회귀분석 하였다. 구체적으로, 피인수기업의 지식창출을 종속변수로 하여, M&A에 참여하는 기업들 간 산업 연관성과 인수기업의 창의성이 가지는 설명력을 확인한다. 본 연구의 결과는 다음과 같다. 첫째, 인수기업과 피인수기업의 산업연관성(industry relatedness)은 M&A 이후 피인수기업의 지식창출(knowledge creation)과 통계적으로 유의미한 관계를 가지지 않는다. 둘째, 인수기업의 창의성은 피인수기업의 지식창출을 촉진한다. 셋째, 유사한 산업에 속한 기업들이 M&A 하는 경우 창의성은 중요한 변수가 아니었으나, 서로 상이한 산업에 속한 기업들이 M&A 할 경우 인수기업이 창의적일수록 지식창출은 더욱 촉진되었다. 이러한 연구결과는 기업의 창의적 역량이 새로운 아이디어를 창출하는 원천일 뿐만 아니라 연관성이 낮은 M&A(unrelated M&A)와 같은 난제를 해결하는 핵심 자원이라는 사실을 입증한다.CHAPTER 1. INTRODUCTION 1 CHAPTER 2. THEORY AND HYPOTHESIS 4 2.1 INDUSTRY RELATEDNESS AND KNOWLEDGE CREATION 4 2.1.1 Knowledge creation 5 2.1.2 Industry relatedness 6 2.2 CREATIVITY AND KNOWLEDGE CREATION 9 2.2.1 Creativity from an Integrated perspective 10 2.2.2 The relationship between firm creativity and knowledge creation 12 2.2.3 The role of Acquirers creativity 15 2.3 THE MODERATING ROLE OF CREATIVITY 17 CHAPTER 3. METHOD 20 3.1 SAMPLE 20 3.2 MEASUREMENT AND DATA SOURCES 20 3.2.1 Independent Variables 20 3.2.2 Dependent Variable 24 3.2.3 Control Variables 25 CHAPTER 4. RESULTS 27 CHAPTER 5. DISCUSSION AND CONCLUSION 34 REFERENCES 37 국문초록 48Maste

Building Organizational (Dis-)Abilities: The impact of learning on the performance of mergers and acquisitions

As the number and size of merger and acquisition (M&A) deals increases globally, firms need to learn how to successfully execute M&As. There are three main ways in which this learning occurs. First, firms learn experientially, i.e., from their experience. Second, they learn contextually by deliberately observing the characteristics of the target firm and how the relationship with the target evolves over time before making consequential decisions. Third, they learn vicariously, i.e. by monitoring the behavior of third parties in order to draw relevant information on when, what, and how to acquire. \nIn the three studies that comprise this dissertation, I contribute to existing knowledge on the relation between learning and M&A performance by investigating learning dynamics that are unaddressed in the literature. In the first study, I analyze the impact of firms\xe2\x80\x99 domestic M&A experience on the performance of their cross-border acquisitions. In the second study, I examine how the response of an acquirer to a target\xe2\x80\x99s pre-deal performance affects the relation between the top management teams (TMTs) of the firms, reverberating, ultimately, on post-deal performance. In the third study, I investigate how the reactions of market participants, such as investors and financial analysts, to an acquisition announcement reduce information asymmetries between the acquirer and the target thereby influencing the acquirer\xe2\x80\x99s decision to proceed or abandon an initiated deal. Together, these studies present a more nuanced, counterintuitive perspective on the role of information and learning in the context of M&A

Effects of transformational leadership and TMT heterogeneity on M&A integration and performance in China

With the growth of mergers and acquisitions (M&As) in China, the role of leadership and organisational human resource factors in the integration and performance of these deals has been widely studied. In recent years, more and more articles are related to the merger integration, leadership and TMT factors affecting merger performance. However, there has not been sufficient research on combining them and developing a comprehensive model to understand their impact on M&A. Besides, the existing studies are mainly on the basis of the Western backgrounds, and the research on the emerging economies like China is insufficient. In order to bridge this gap, the purpose of this research is to explore how transformational leadership and TMT heterogeneity has an impact on understanding the performance of Chinese M&A transactions. A comprehensive review of the relevant literature is also provided to guide the related theoretical development. This study is guided by a total of three questions. Firstly, what is the impact of transformational leadership and TMT heterogeneity on M&A integration in China? Secondly, what is the relationship between M&A integration and performance in China? And thirdly, how do transformational leadership and TMT heterogeneity moderate the relationship between M&A integration and performance in China? The theoretical framework was tested with a sample of 295 respondents from six Chinese industries. The empirical results indicate the comprehensive support for the effect of transformational leadership on the M&A integration, whereas TMT heterogeneity is only positively associated with degree of integration, and insignificantly related to speed of integration. Also, the degree of integration is explored, indicating that it is directly proportional to staff satisfaction and engagement, TMT turnover and M&A success. However, the speed of integration is not statistically related to all of the dependent variables. At last, these findings indicate the partial support for the moderating effect of transformational leadership and TMT heterogeneity on M&A integration and post-M&A performance. In accordance with these results, implications for theory and practice are advanced by taking account into the unique organisational and managerial context of China

Alliance Networks Management: A Study of Global Automotive Industry

This dissertation studies the importance of alliance networks on firms’ behavior and performance outcomes in the context of the global automotive industry. The first essay examines the importance of alliance networks positions on the persistence of an innovation advantage for a firm. The results contribute to our understanding of network advantages and network structure persistence over time. Building upon network theory, I found that network prominence facilitates the persistence of an innovation advantage over time as network prominence supports a firm’s continuous innovation and can effectively impede imitation by competitors. Conversely, network density and brokerage are negatively associated with the persistence of an innovation advantage over time. Drawn upon organization learning, knowledge transfer, and network literature, the second essay aims to uncover different combinations of a firm’s internal and external knowledge creation capabilities and knowledge transfer capabilities that lead to a firm’s superior innovation performance within different environments. Specifically, using a fuzzy set Qualitative Comparative Analysis (fsQCA) technique, I identified three possible solutions to a firm’s superior innovation performance. Results from the global automotive industry highlight that the novel knowledge recognition capability, represented by alliance network diversity and structural holes, play a critical role for firms to achieve superior innovation. In the third essay, I explored how MNEs’ host country local network advantages can influence their subsequent entry strategies. Based on a study of 345 FDI entries in the U.S. market, I found that firms with a higher level of local network prominence are more likely to choose greenfield investments over acquisitions in their subsequent entries as local network prominence can facilitate firms’ local resource access and reduce the dependence on forming new cooperative modes in the host country. This study contributes to both the entry mode and network literature by showing the importance of firms’ network positions on their resource access and control in the process of internationalization. In sum, the findings of this dissertation contribute to our understanding of alliance networks and alliance management by providing empirical evidence of the influence of alliance networks on firms’ behavior and performance outcomes

From Chinese Local State-Owned Enterprise to Global MNE: a Mixed Methods Investigation into pre- and post- Strategic Asset Seeking OFDI in sub-national CMNEs

Over the last several decades, Chinese local state owned enterprises (LSOEs) have become significant forces in Chinese outward foreign direct investment (OFDI). I first show, using a quantitative regression model, how LSOEs have a comparatively stronger strategic asset seeking (SAS) orientation. Operating within a diversified external political economy, and possessing unique status and features following decentralization, LSOEs face particular challenges, to which SAS oriented OFDI has arguably been one response. I then investigate the case of China’s Northern Heavy Industries (NHI) Group from Liaoning Province. The group operates in the Tunnel Boring Machinery (TBM) industry and has become one of the world’s most successful TBM players. It has done so through several large foreign strategic asset related acquisitions (one in France and one in the US). I draw from interviews and hand-collected primary information from the parent firm in China, and the acquired subsidiaries in France, the United States and Germany. I explore in particular pre and post SAS related FDI decision making and integration strategies and behaviours. I identify: (1) Local state ownership as an important factor determining pre-OFDI strategic decision making and post-OFDI integration; (2) The Chinese institutional environment as a potential comparative advantage for LSOEs in negotiating with foreign investment targets or partners; (3) the challenges and responses to post FDI SAS integration for local state-owned Chinese businesses. To date we know relatively little in detail about the ways in which local Chinese MNEs have managed to catch-up with developed market counterparts. This research therefore contributes to our understanding of theories like Mathews’ (2006) ‘LLL’ model, the ‘springboard’ perspective of Luo and Tung (2007), and Chinese OFDI determination theory by Buckley et al. (2007). It also sheds important new light on the institutional perspective, particularly the role of local government in spurring Chinese MNEs (CMNE) OFDI related catch-up