The double-edged sword of cultural distance in international acquisitions

Reus, Taco H.; Lamont, Bruce T.

doi:10.1057/jibs.2009.25

Cited by 348 publications

(282 citation statements)

References 73 publications

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“…Reus, Lamont and Ellis measured "functional integration" 9 with six survey items gauging "the extent to which key functional areas of the acquired firm were integrated with those of the acquirer" (2016: 938). However, they found no direct effect on performance, using the same composite performance measure as Reus and Lamont (2009).…”

Section: Interaction and Communication Studies Focusing On Interactimentioning

confidence: 93%

The Process of Postmerger Integration: A Review and Agenda for Future Research

Graebner¹,

Heimeriks

Huy

et al. 2017

ANNALS

279

354

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Mergers and acquisitions continue to be prevalent despite frequently yielding disappointing outcomes. Post-merger integration plays a critical role in M&A success, yet many questions about M&A implementation remain unanswered. In this article, we review research on post-merger integration, which we organize around strategic integration, sociocultural integration, and experience and learning. We then lay out a research agenda that centers on expanding our understanding of processual dynamics in post-merger integration. We focus on opportunities related to temporality; decision-making; practices and tools; and emotionality.

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Section: Interaction and Communication Studies Focusing On Interactimentioning

confidence: 93%

The Process of Postmerger Integration: A Review and Agenda for Future Research

Graebner¹,

Heimeriks

Huy

et al. 2017

ANNALS

279

354

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“…Consistent with this line of reasoning, several studies have found evidence that MNEs may obtain better performance in distant markets (e.g., Evans & Mavondo, 2002;Magnusson, Schuster, & Taras, 2014). These and other studies suggest that cultural differences, which tend to be more salient in business transactions across greater distances, may lead the individuals, groups and organizations involved in these transactions to pay greater attention to cultural sensitivities and be better prepared to navigate the cultural quagmires in the context of cross-border mergers and acquisitions (Björkman, Stahl, & Vaara, 2007;Reus & Lamont, 2009;Stahl & Voigt, 2008). A study by Schomaker and Zaheer (2014) found that knowledge understanding was higher across units in more linguistically distant locations.…”

Section: Introductionmentioning

confidence: 95%

Widening the lens: Rethinking distance, diversity, and foreignness in international business research through positive organizational scholarship

et al. 2016

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The point of departure for the special issue is that current theory and research in international business (IB) may have overly emphasized a negative view on foreignness, distance, and differences of all kinds (national, cultural, organizational, and institutional), with an emphasis on liabilities and adverse outcomes associated with such differences. While existing research is certainly valuable, we argue that focusing on mostly negative processes and outcomes has hindered our understanding of the dynamics, processes, and conditions that enable organizations to benefit from diversity in a wide range of IB contexts. The goal of this special issue is to promote research that is in line with a Positive Organizational Scholarship perspective, which encourages scholars to look at commonly considered phenomena in new ways, as well as to explicitly consider positive phenomena in IB research. We then introduce the three articles included in the special issue and highlight how they help IB scholars better understand when and how foreignness, distance, and diversity can enhance organizational effectiveness and performance at multiple levels.

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“…Competition among multiple potential control buyers can generate a high premium for the stocks of the acquiree (Capron & Pistre, 2002), management inefficiency concerning companies' post-acquisition context (Reus & Lamont, 2009), and, finally, the different metrics used to assess performance could be one of the explanations for these disagreements (Zollo & Meier, 2008).…”

Section: Financial Performance In Mergers and Acquisitionsmentioning

confidence: 99%

“…Over the years, the focus moved to the resource-based view and the organizational learning perspective (Barkema & Vermeulen, 1998). Institutional-and sociocultural-based theories, which analyze the impact of cultural distance, regulatory differences, and institutional contingencies on corporate restructuring events, are increasingly numerous nowadays (Dikova, Sahib, & Witteloostuijn, 2010;Gubbi, Aulakh, Ray, Sarkar, & Chittoor, 2010;Lin, Peng, Yang, & Sun, 2009;Nadolska & Barkema, 2007;Reus & Lamont, 2009), as more traditional analyses focusing on financial-economic and market aspects have proved insufficient to apprehend the entire complexity inherent to a cross-border acquisition (King, Dalton, Daily, & Covin, 2004).…”

Section: Introductionmentioning

confidence: 99%

Desempenho de fusões e aquisições cross border: análise empírica do caso brasileiro

Bortoluzzo

Garcia²,

Boehe

et al. 2014

Rev. adm. empres.

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Desempenho de fusões e aquisições cross border: análise empírica do caso brasileiro Desempeño de fusiones y adquisiciones cross border: análisis empírico del caso brasileño ABSTRACTThe purpose of this article is to investigate whether the cross-border acquisitions made by Brazilian companies over the past 15 years have improved their financial performance. Drawing on institutional, sociocultural, and organizational learning theories, this study develops and empirically tests several hypotheses on the determinants of M&A performance. The results demonstrate that the cross-border acquisition moves by Brazilian companies actually improve their financial performance. Financial performance tends to be positive when the cultural distance between the countries of the acquiring and acquired companies is low to medium and when the institutional context of the acquired company is a developed one. We also found an inverted-U shape relationship between acquiring companies' previous international M&A experience and the performance of a new cross-border operation. These findings suggest that research on international M&As should include acquirers' M&A experience as well as the institutional characteristics of their target countries. KEYWORDS | Cross-border M&A, internationalization, financial performance, institutional theory, organizational learning. RESUMO Este artigo tem como objetivo investigar se as aquisições realizadas por empresas brasileiras fora do País nos últimos 15 anos têm aumentado o desempenho financeiro dessas empresas. Além disso, é realizada uma análise empírica dos fatores determinantes desse sucesso, com base nas teorias institucional, sociocultural e de aprendizagem organizacional. Os resultados indicam que, de fato, as investidas cross border de companhias do Brasil melhoram o desempenho, que é positivamente impactado quando a distância cultural entre os países da adquirida e da adquirente é baixa ou média e quando o ambiente institucional no qual a empresa-alvo se encontra é desenvolvido. Já a relação entre as experiências anteriores das brasileiras em fusões ou aquisições internacionais e o desempenho de uma nova aquisição fora do País segue o formato de U invertido, enfatizando a relevância de se considerar a experiência com fusões e aquisições da empresa compradora além das características institucionais dos seus países-alvo. PALAVRAS-CHAVE | Fusões e aquisições cross border, internacionalização, desempenho financeiro, teoria institucional, aprendizagem organizacional. RESUMEN Este artículo tiene como objetivo investigar si las adquisiciones realizadas por empresas brasileñas fuera del País en los últimos RAE-Revista de Administração de Empresas | FGV-EAESP

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The double-edged sword of cultural distance in international acquisitions

Cited by 348 publications

References 73 publications

The Process of Postmerger Integration: A Review and Agenda for Future Research

The Process of Postmerger Integration: A Review and Agenda for Future Research

Widening the lens: Rethinking distance, diversity, and foreignness in international business research through positive organizational scholarship

Desempenho de fusões e aquisições cross border: análise empírica do caso brasileiro

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