M&A Open Innovation, and Its Obstacle: A Case Study on GCC Region

Abstract

Considering the effective growth in challenges and an urge in establishment for sustainable business, companies trading globally are inclined towards the implementation of highly efficient cross-border reallocations of revolving capital. The prominent objective of this research paper is therefore the clear identification of the active key attributes and specifications of all strategic measures for efficient sustainable cross-border mergers and acquisitions (M&As) of the Islamic companies in the Gulf region that are keen to engage with the non-Islamic companies across the globe. This paper also explores the paradigm of culture, in its different manifestations, it was and still is a primary factor of creativity. This study also focuses on building some better understanding of the role of "Culture for Open Innovation Dynamics." Initially, since the need to interpret community, that can also influence the dynamics of open innovation, has sharply increased, the research addresses open innovation dynamics and its significant concerns related to cross border mergers and cross culture ventures of firms and organizations. The researcher purposively selected 15 financial institutions from the selected Gulf Cooperation Council (GCC) countries. Semi-structured interviews were conducted with 40 key individuals including Board of Directors (BOD) members, lawyers and the Shariah scholars involved with three Islamic banks and two Islamic insurance companies in GCC. The findings indicate a consensus among the respondents regarding how the Shariah corporate governance principles can present barriers for cross-border M&As. Key obstacles to the success of cross-border M&As between the Islamic and the non-Islamic companies include the Shariah compliance, weak systems of disclosure, dependency, corruption in compliance, having family members on the Board, weakened communication with external auditors, different interpretations of Shariah by different scholars and a lack of alternative Islamic financial instruments. The comprehensive research in this paper fills the research gap by specifying the key attributes of considering the future implementation and management of M&As in broader scopes.

Influence of Open Innovation Variables on the Competitive Edge of Small and Medium Enterprises

“…According to [119], the culture of the dynamics of open innovation is cyclical and follows a quadruple helix, composed of actors from industry, government, society, and university. The results presented in Table 8 show exactly open innovation variables that are directly related to one or more agents of the micro and macro dynamics of the quadruple helix.…”

Does religion impact corporate innovation in developing countries?

“…Cultural and religious norms have been found to be the primary factors in influencing consumer spending and, in turn, product development. Moreover, Bindabel (2020) investigated the importance of culture as a paradigm in fostering open innovation in the Gulf Cooperation Council countries. The results showed that the respondents generally agreed on how the Shariah compliance company decided on matters of innovation and M&A.…”

Worldwide Innovation and Technology Environments: Research and Future Trends Involving Open Innovation

“…Thus, during this study of different types of innovation, the process of open innovation emerges and is adapted according to companies' needs [26]. Open innovation is cyclical and follows a quadruple helix, composed of actors from the industry, government, universities, and society [27]. A critical part of the open innovation process involves the knowledge management required to achieve higher levels of industrial performance through the correct use of technologies [8].…”

“…Innovation is a cutting-edge goal for companies interested in expanding their businesses, involves different types of change and depends on an organization's resources, capabilities, strategies, and requirements [25]. As a result, customer attraction and company performance are influenced by innovative strategies and activities [27]. For [8], the dynamics of innovation are cyclical and follow a quadruple helix, composed of actors from the industry, government, and universities, and could be leveraged in innovation environments.…”