Motive Archetypes in Mergers and Acquisitions (M&A): The Implications of a Configurational Approach to Performance

Why do managers continue to transact merger & acquisition (M&A) deals, in massive number and dollar terms, when so many are deemed to fail? This paradox is central to the study of M&A. Despite considerable research effort being devoted to refining and redefining assessments of M&A performance the consensus of opinion remains that most M&A fail. Certain of the high percentage of M&A failure, performance academics infer that the continued massive levels of transactions can only be explained as misguided actions by managers. This chapter believes that the performance paradox can begin to unravel if we move beyond simple inference of managerial intentions and observe what actually takes place in practice. For instance the underlying assumptions of performance academics, that; 1) each M&A must create greater value for acquiring shareholders; 2) no other reasons for an M&A are legitimate, are not adequate for capturing ‘legitimate’ managerial action in practice. This suggests that part of the reason for so many M&A appearing to be failures is a result of the ‘myopia’ of performance studies themselves, where assumed and simplified motives have resulted in crude categorisations and confounded data. These limitations in the M&A performance literature are addressed in this chapter by; 1) demonstrating a broader set of motivations for M&A; 2) establishing their legitimacy; 3) showing that motivations may not be singular in nature but intertwined and complex; 4) presenting a way in which this greater complexity may be conceived in order for more sensitive empirical tests to be performed

Strategic Practice during a hostile takeover process: the bid for Blue Circle PLC

This Blue Circle case gives a rare inside view into the strategic practice of target top management responding to a hostile bid. It allows for informed discussion around the strategic reasons for such a bid, the choice of defence strategies open to the target firm and the issues and tensions facing the target firm’s top manager as the bid evolves. The case traces the manoeuvrings of the target firm top management and illustrates how their actions and practices, across a wide range of issues and contexts, can influence strategic outcome. As such this case illustrates that strategic manoeuvrings can materially affect outcome. The focus of the case upon the target top manager also raises questions around whether he was acting in i) his own self-interest, ii) the interests of Blue Circle’s shareholders iii) the best interests of the firm. These questions are core to agency and stewardship perspectives on top management motivation. As the hostile bid process unfolds, and the activities and actions of the target CEO are revealed, answering these questions allows debate on whether the target CEO is agent, agency problem or steward

Signaling strategic commitment for organizational transition: how to manage potential M&As through voluntary disclosures

To ‘transit or not’ often depends upon winning over investor opinion to large strategic initiatives. M&A is one such major realignment of an organization and yet once a bid for a company has been announced there is a period of uncertainty when the bid may not be completed. This depends on share price movements determined more by investor perceptions than fundamental values. This paper investigates whether these perceptions may be influenced by ‘voluntary’ corporate communications and so link managerial practices to strategic outcomes. Drawing upon two very large M&A data sets (USA and UK) (57,000 deals; 30,000 communications) we argue managerial practice (signaling strategic commitment) shapes market response and demonstrate communication characteristics, and the use of high-reputation intermediaries, play an important role in determining share price reaction

Voluntary disclosures as a form of impression management to reduce evaluative uncertainty during M&A

This study develops and tests a set of hypotheses on how to manage investors’ evaluative uncertainty during M&A through a specific form of impression management, namely, interim news events. We suggest that voluntary disclosures are key in influencing investors’ reactions during M&A. Empirical support for our theoretical arguments is shown in a sample of 36,376 deals and 163,023 associated interim news events carried out by NYSE and NSDQ listed organizations over 10 years. Our research contributes to literature on voluntary disclosures, impression management, and managing M&A

Why good things don’t happen:the micro-foundations of routines in the M&A process

Why do organizations reject favorable opportunities - why don't good things happen? To address this question, we examine companies that fail to proceed with major opportunities for strategic renewal. By focusing upon routines in 28 cases of reverse mergers and acquisitions decisions across three continents, the research uncovers the centrality of a hitherto overlooked process, the authorization routine. The characteristics of this routine, and its nested nature, are shown to be critical to whether favorable opportunities are progressed. These findings contribute to the mergers and acquisition literature by extending prior process models and to the routines literature by showing how links and interactions between different layers of routines, and the nature of the routine enactment itself, are important in affecting strategic outcomes

Wiley encyclopedia of management

Definition of turnaround strategy as included in the Wiley Encyclopedia of Management.peer-reviewe

Lost but found: bringing strategy practice back into strategy teaching

In this paper, we contend that what may have been lost in strategy teaching, through over emphasis on theory and plunging-in biases, is an attention to the ‘practices’ of strategy. Many of the critiques of strategy teaching, and the current demands upon practitioners, can be addressed by more explicit recourse to a practice perspective on strategy teaching. Through identifying five core practice concepts and using an abductive method, we report on a longitudinal comparative video graphic analysis of two outstanding masters level strategy modules, to identify strategy practices in use. Each strategy module teaches very similar strategy content and with similar stated objectives, but comparison reveals that core strategy practice pillars are deployed very differently to very different effects. In addition, additional practices are identified (immersed repetition and professionalization) that extend the pillars of strategy practice. These findings show how a practice perspective can go a long way to advance the theory and practice of strategic management teaching

Recasting the dynamics of post-acquisition integration:an embeddedness perspective

M&A scholars have generally assumed that post-acquisition integration is a self-contained process. However this ignores that this process rarely unfolds as the only ongoing initiative in an organization. We contend that post-acquisition integration is not detached from other simultaneous change processes in the organizational context and this has important implications for our understanding of how integration dynamics actually evolve. To further understand this embeddedness we examine the unfolding of a post-acquisition integration process in a company faced with an unanticipated drop in demand due to the global economic crisis. Through a qualitative, longitudinal study conducted over three years, we carried out 151 interviews to uncover the unfolding of the post-acquisition process. We find that post-acquisition integration is embedded in a set of co-evolving processes. We highlight four mechanisms (coordination, cohesion, disconnection, alienation) that arise from the co-evolution of processes that either facilitate or impede integration. Our findings contribute to our understanding of post-acquisition integration dynamics by recasting the integration process as embedded in a set of co-evolving processes that shape its unfolding

Multidexterity : combining competing business models in transforming economies

In an attempt to respond to recent calls for better understanding the coexistence of multiple business models, we develop the concept of ‘multidexterity’— the ability to develop, nurture, and execute several distinctive BM strategies simultaneously across different levels and functions of the MNC and its host markets. To illustrate this approach, we describe a European healthcare firm entering the rapidly transforming economy of China and facing regulatory constraints and ambiguities in the application of industry standards. This situation is a generic challenge for MNCs entering rapidly transforming economies, which they help in turn to substantially alter and develop. We argue multidextrous business models are effective entry strategies for MNCs. They also help resolve two conceptual limitations in the BMI literature: (1) the problem of environmental contingencies and (2) the interrelatedness of factors at the macro, meso and micro levels. We address these problems from a practice approach. We provide some implications for the concept of multidexterity and business models, and address managerial challenges and prospects in developing multidextrous organizations

Problematizing Strategic Alliance Research: Challenges, Issues and Paradoxes in the New Era

Strategic alliances have attracted substantial attention from industry and academia over the past three decades. However, due to rapid technological evolution, saturated marketplaces, globalisation of businesses on the one hand and de-globalisation of the market on the other (as marked by Brexit and the trade war between US and China, COVID-19 pandemic and the Ukraine war), the strategic environment of businesses is changing quickly. Fundamental and rapid changes in the wider environment necessitate the review of theoretical and practical insights of earlier and emerging studies - to examine the new challenges, issues and paradoxes of strategic alliances. This special issue attempts to provide a forum to allow researchers to question the assumptions underlying existing theory a little further beyond just “gap-spotting” or “gap-filling”. This special issue includes four very interesting literature review pieces, which venture deeper into the phenomenon, and explore the opportunities, issues and paradoxes of strategic alliances while adopting alternative theoretical perspectives, methodological approaches and interpretations to address issues of managing strategic alliances and maximising returns from them in the new strategic context