Exploration outcomes of M&A: the interplay between coordination mechanisms and acquisition experience

Abstract

Post‐acquisition exploration aims at triggering innovation outcomes through newly acquired resources and capabilities. To this end, formal and informal mechanisms contribute to coordinating such exploration goals. As the usefulness of such coordination mechanisms in merger and acquisition (M&A) depends upon transaction experience, we investigate how tacit and explicit acquisition experience influences the outcomes of formal and informal coordination mechanisms on post‐merger exploration. Based on a sample of 115 transactions of German, Austrian, and Swiss acquirers, our results demonstrate that exploration outcomes are fostered through informal coordination mechanisms. Yet the effect is dampened when previous M&A experiences are held tacit. Formal coordination mechanisms show positive influences on post‐acquisition exploration only when acquisition experience is made explicit. In combination with tacit M&A experience, formal coordination has a negative influence. Thus, we contribute to the extant literature by showing which coordination mechanisms can be utilized to foster post‐acquisition exploration and how explicit and tacit M&A experience can be deployed effectively.

Investigating employee and organizational performance in a cross‐border acquisition—A case of withdrawal behavior

“…In this vein, clear and effective communication throughout the M&A process has been found to yield enhanced employee commitment (e.g., Angwin, Mellahi, Gomes, & Peter, 2016). At the same time, it should be noted that, during post‐acquisition integration, communication is important in achieving what, in the literature, has been referred to as a “common ground” (e.g., Dao et al, 2016), which has further been linked to the emergence of the shared interests that strengthen cooperation at the organizational level (Cooke et al, 2020; Dao & Strobl, 2019). Moreover, such shared interests and the emergence of a common ground are expected to reduce acquired firm employee bias in regard to the acquirer, resulting in such employees providing some degree of cooperation during the integration process (Sarala, Vaara, & Junni, 2019).…”

How firms use coordination activities in university–industry collaboration: adjusting to or steering a research center?

“…Structured coordination activities also contribute to formalizing the tasks needed to achieve established goals (Mom et al, 2009). In sum, firms' engagement in structured coordination activities implicitly steers the respective research center's behavior and enables task completion (Dao & Strobl, 2019). Unstructured coordination activities involve ad hoc actions (Argote, 1982), such as unplanned meetings initiated by firm members (Arenas & Ayuso, 2016), unscheduled resource allocation (Geringer & Hebert, 1989), and informal knowledge sharing between actors (Claggett & Karahanna, 2018).…”

“…Unstructured coordination activities involve ad hoc actions (Argote, 1982), such as unplanned meetings initiated by firm members (Arenas & Ayuso, 2016), unscheduled resource allocation (Geringer & Hebert, 1989), and informal knowledge sharing between actors (Claggett & Karahanna, 2018). Engaging in unstructured coordination activities is often favorable when dealing with uncertainty (Morandi, 2013), such as explorative goals (Dao & Strobl, 2019). Indeed, when dealing with explorative goals, unstructured coordination activities contribute to knowledge creation, which facilitates decision making and goal achievement (Kim et al, 2003).…”

“…Indeed, when dealing with explorative goals, unstructured coordination activities contribute to knowledge creation, which facilitates decision making and goal achievement (Kim et al, 2003). In addition, unstructured coordination activities help align partners by establishing mutual understanding (Koçak et al, 2014) and facilitating mutual adjustments to develop the focal research center (Danese et al, 2004;Dao & Strobl, 2019). In sum, unstructured coordination activities contribute to firms' ability to collaboratively explore and advance new and radical ideas (Dao & Strobl, 2019;Morandi, 2013) by aligning with and adjusting to the focal research center's development (Danese et al, 2004).…”

Innovation management in collaborative partnerships

“…Based on a sample of 115 transactions of German, Austrian, and Swiss acquirers, the sixth paper by Dao and Strobl () investigates the post‐acquisition exploration aims at triggering innovation outcomes through newly acquired resources and capabilities, and shows that formal and informal coordination mechanisms can be utilized to foster post‐acquisition exploration and how explicit and tacit M&A experience can be deployed effectively.…”