IDEAS home Printed from https://ideas.repec.org/a/bla/stratm/v38y2017i12p2465-2485.html
   My bibliography  Save this article

Stakeholder Orientation and Acquisition Performance

Author

Listed:
  • Emanuele L. M. Bettinazzi
  • Maurizio Zollo

Abstract

Research summary: In this article, we study how a firm's stakeholder orientation affects the performance of its corporate acquisitions. We depart from prior literature and suggest that orientations toward employees, customers, suppliers, and local communities will affect long‐term acquisition performance both directly and through its interactions with process characteristics, such as preacquisition relatedness and postacquisition integration. Analyses of data on a sample of 1884 acquisitions show overall a positive association between acquirers' stakeholder orientation and acquisition performance. In addition, we find support for a positive moderation of business relatedness on the performance impacts of stakeholder orientation. Structural integration has a similarly positive moderation effect only for some of the stakeholder categories. Managerial summary: Does collaboration with stakeholders during an acquisition pay off in terms of performance? The results of this research show that it is worth engaging stakeholders during the M&A process, but that the efficacy of involvement practices may depend on the type of stakeholders and the characteristics of the acquisition. While acquiring firms that take account of suppliers and local communities consistently overperform in their acquisitions, the inclusion of employees might be not beneficial (and even harmful) when the target firm operates in a dissimilar business or when managers do not plan to maintain it as a separate entity. Copyright © 2017 John Wiley & Sons, Ltd.

Suggested Citation

  • Emanuele L. M. Bettinazzi & Maurizio Zollo, 2017. "Stakeholder Orientation and Acquisition Performance," Strategic Management Journal, Wiley Blackwell, vol. 38(12), pages 2465-2485, December.
    • Handle: RePEc:bla:stratm:v:38:y:2017:i:12:p:2465-2485
    DOI: 10.1002/smj.2672
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/smj.2672
    Download Restriction: no
    File URL: https://libkey.io/10.1002/smj.2672?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Jensen, Michael C. & Ruback, Richard S., 1983. "The market for corporate control : The scientific evidence," Journal of Financial Economics, Elsevier, vol. 11(1-4), pages 5-50, April.
    2. Marco Bigelli & Stefano Mengoli, 2004. "Sub-Optimal Acquisition Decisions under a Majority Shareholder System," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 8(4), pages 373-405, October.
    3. Sydney Finkelstein & Jerayr Haleblian, 2002. "Understanding Acquisition Performance: The Role of Transfer Effects," Organization Science, INFORMS, vol. 13(1), pages 36-47, February.
    4. Cohen, Michael D, et al, 1996. "Routines and Other Recurring Action Patterns of Organizations: Contemporary Research Issues," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 5(3), pages 653-698.
    5. Dunham, Laura & Freeman, R. Edward & Liedtka, Jeanne, 2006. "Enhancing Stakeholder Practice: A Particularized Exploration of Community," Business Ethics Quarterly, Cambridge University Press, vol. 16(1), pages 23-42, January.
    6. Laurence Capron & Jung‐Chin Shen, 2007. "Acquisitions of private vs. public firms: Private information, target selection, and acquirer returns," Strategic Management Journal, Wiley Blackwell, vol. 28(9), pages 891-911, September.
    7. Micah S. Officer & Annette B. Poulsen & Mike Stegemoller, 2009. "Target-firm information asymmetry and acquirer returns," Review of Finance, European Finance Association, vol. 13(3), pages 467-493.
    8. Annette L. Ranft & Michael D. Lord, 2002. "Acquiring New Technologies and Capabilities: A Grounded Model of Acquisition Implementation," Organization Science, INFORMS, vol. 13(4), pages 420-441, August.
    9. Demsetz, Harold, 1973. "Industry Structure, Market Rivalry, and Public Policy," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 1-9, April.
    10. Gautam Ahuja & Riitta Katila, 2001. "Technological acquisitions and the innovation performance of acquiring firms: a longitudinal study," Strategic Management Journal, Wiley Blackwell, vol. 22(3), pages 197-220, March.
    11. Koen H. Heimeriks & Mario Schijven & Stephen Gates, 2012. "Manifestations of Higher-Order Routines: The Underlying Mechanisms of Deliberate Learning in the Context of Postacquisition Integration," Post-Print hal-00859930, HAL.
    12. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    13. Udo Zander & Bruce Kogut, 1995. "Knowledge and the Speed of the Transfer and Imitation of Organizational Capabilities: An Empirical Test," Organization Science, INFORMS, vol. 6(1), pages 76-92, February.
    14. Robert G. Eccles & Ioannis Ioannou & George Serafeim, 2014. "The Impact of Corporate Sustainability on Organizational Processes and Performance," Management Science, INFORMS, vol. 60(11), pages 2835-2857, November.
    15. McCallum, B T, 1970. "Artificial Orthogonalization in Regression Analysis," The Review of Economics and Statistics, MIT Press, vol. 52(1), pages 110-113, February.
    16. Lang, Larry H. P. & Stulz, ReneM. & Walkling, Ralph A., 1989. "Managerial performance, Tobin's Q, and the gains from successful tender offers," Journal of Financial Economics, Elsevier, vol. 24(1), pages 137-154, September.
    17. C. Marlene Fiol, 1994. "Consensus, Diversity, and Learning in Organizations," Organization Science, INFORMS, vol. 5(3), pages 403-420, August.
    18. Russell W. Coff, 1999. "When Competitive Advantage Doesn't Lead to Performance: The Resource-Based View and Stakeholder Bargaining Power," Organization Science, INFORMS, vol. 10(2), pages 119-133, April.
    19. Marco Caliendo & Sabine Kopeinig, 2008. "Some Practical Guidance For The Implementation Of Propensity Score Matching," Journal of Economic Surveys, Wiley Blackwell, vol. 22(1), pages 31-72, February.
    20. Gramm, Marshall, 2003. "The Case for Regulatory Rent-Seeking: CRA Based Protests of Bank Mergers and Acquisitions," Public Choice, Springer, vol. 116(3-4), pages 367-379, September.
    21. Anju Seth, 1990. "Sources of value creation in acquisitions: An empirical investigation," Strategic Management Journal, Wiley Blackwell, vol. 11(6), pages 431-446, October.
    22. Michael A. Hitt & Beverly B. Tyler, 1991. "Strategic decision models: Integrating different perspectives," Strategic Management Journal, Wiley Blackwell, vol. 12(5), pages 327-351, July.
    23. Robert Gibbons & Rebecca Henderson, 2012. "Relational Contracts and Organizational Capabilities," Organization Science, INFORMS, vol. 23(5), pages 1350-1364, October.
    24. Royston Greenwood & C. R. Hinings & John Brown, 1994. "Merging Professional Service Firms," Organization Science, INFORMS, vol. 5(2), pages 239-257, May.
    25. Aleksandra Kacperczyk, 2009. "With greater power comes greater responsibility? takeover protection and corporate attention to stakeholders," Strategic Management Journal, Wiley Blackwell, vol. 30(3), pages 261-285, March.
    26. McNichols, Maureen F., 2000. "Research design issues in earnings management studies," Journal of Accounting and Public Policy, Elsevier, vol. 19(4-5), pages 313-345.
    27. Srikanth Paruchuri & Atul Nerkar & Donald C. Hambrick, 2006. "Acquisition Integration and Productivity Losses in the Technical Core: Disruption of Inventors in Acquired Companies," Organization Science, INFORMS, vol. 17(5), pages 545-562, October.
    28. Sanjay Sharma & Irene Henriques, 2005. "Stakeholder influences on sustainability practices in the Canadian forest products industry," Strategic Management Journal, Wiley Blackwell, vol. 26(2), pages 159-180, February.
    29. Gino Cattani, 2005. "Preadaptation, Firm Heterogeneity, and Technological Performance: A Study on the Evolution of Fiber Optics, 1970–1995," Organization Science, INFORMS, vol. 16(6), pages 563-580, December.
    30. Maurizio Zollo & Jeffrey J. Reuer, 2010. "Experience Spillovers Across Corporate Development Activities," Organization Science, INFORMS, vol. 21(6), pages 1195-1212, December.
    31. Jaideep Anand & Harbir Singh, 1997. "Asset Redeployment, Acquisitions And Corporate Strategy In Declining Industries," Strategic Management Journal, Wiley Blackwell, vol. 18(S1), pages 99-118, July.
    32. Harbir Singh & Cynthia A. Montgomery, 1987. "Corporate acquisition strategies and economic performance," Strategic Management Journal, Wiley Blackwell, vol. 8(4), pages 377-386, July.
    33. Balaji S. Chakravarthy, 1986. "Measuring strategic performance," Strategic Management Journal, Wiley Blackwell, vol. 7(5), pages 437-458, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Philipp Meyer‐Doyle & Sunkee Lee & Constance E. Helfat, 2019. "Disentangling the microfoundations of acquisition behavior and performance," Strategic Management Journal, Wiley Blackwell, vol. 40(11), pages 1733-1756, November.
    2. Aseem Kaul & Brian Wu, 2016. "A capabilities-based perspective on target selection in acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 37(7), pages 1220-1239, July.
    3. Stienstra, Miranda, 2020. "The determinants and performance implications of alliance partner acquisition," Other publications TiSEM 7fdee0c2-d4d2-4f5b-95e3-2, Tilburg University, School of Economics and Management.
    4. Phanish Puranam & Harbir Singh & Saikat Chaudhuri, 2009. "Integrating Acquired Capabilities: When Structural Integration Is (Un)necessary," Organization Science, INFORMS, vol. 20(2), pages 313-328, April.
    5. Uriel Stettner & Dovev Lavie, 2014. "Ambidexterity under scrutiny: Exploration and exploitation via internal organization, alliances, and acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 35(13), pages 1903-1929, December.
    6. Erik E. Lehmann & Manuel T. Schwerdtfeger, 2016. "Evaluation of IPO-firm takeovers: an event study," Small Business Economics, Springer, vol. 47(4), pages 921-938, December.
    7. Braun, Thorsten V. & Lehmann, Erik E. & Schwerdtfeger, Manuel T., 2011. "The stock market evaluation of IPO-firm takeovers," UO Working Papers 01-11, University of Augsburg, Chair of Management and Organization.
    8. Chondrakis, George, 2016. "Unique synergies in technology acquisitions," Research Policy, Elsevier, vol. 45(9), pages 1873-1889.
    9. Varshney, Mayank & Jain, Amit, 2023. "Technology acquisition following inventor exit in the biopharmaceutical industry," Technovation, Elsevier, vol. 126(C).
    10. Ye Jin Lee & Kwangsoo Shin & Eungdo Kim, 2019. "The Influence of a Firm’s Capability and Dyadic Relationship of the Knowledge Base on Ambidextrous Innovation in Biopharmaceutical M&As," Sustainability, MDPI, vol. 11(18), pages 1-17, September.
    11. Ilya R. P. Cuypers & Youtha Cuypers & Xavier Martin, 2017. "When the target may know better: Effects of experience and information asymmetries on value from mergers and acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 38(3), pages 609-625, March.
    12. Feiqiong Chen & Qiaoshuang Meng & Fei Li, 2017. "How resource information backgrounds trigger post-merger integration and technology innovation? A dynamic analysis of resource similarity and complementarity," Computational and Mathematical Organization Theory, Springer, vol. 23(2), pages 167-198, June.
    13. David Benson & Rosemarie H. Ziedonis, 2009. "Corporate Venture Capital as a Window on New Technologies: Implications for the Performance of Corporate Investors When Acquiring Startups," Organization Science, INFORMS, vol. 20(2), pages 329-351, April.
    14. Ralph Siebert & Zhili Tian, 2020. "Dynamic Mergers Effects on R&D Investments and Drug Development across Research Phases in the Pharmaceutical Industry," CESifo Working Paper Series 8303, CESifo.
    15. Namgyoo K. Park & Monica Youngshin Chun & Jeonghwan Lee, 2019. "How Do Mobility Direction and Human Assets of Mobile Engineers Affect Joint Knowledge Creation after M&As?," Sustainability, MDPI, vol. 11(16), pages 1-21, August.
    16. Kavusan, K., 2015. "Essays on capability development through alliances," Other publications TiSEM 8eb736a5-b217-4718-ac13-d, Tilburg University, School of Economics and Management.
    17. Mudde, Paul A. & Brush, Thomas, 2006. "Do Acquirer Capabilities Affect Acquisition Performance? Examining Strategic and Effectiveness Capabilities in Acquirers," Purdue University Economics Working Papers 1193, Purdue University, Department of Economics.
    18. Chengguang Li & Oded Shenkar & William E. Newburry & Yinuo Tang, 2021. "How Country Reputation Differentials Influence Market Reaction to International Acquisitions," Journal of Management Studies, Wiley Blackwell, vol. 58(6), pages 1609-1639, September.
    19. Martynova, M., 2006. "The market for corporate control and corporate governance regulation in Europe," Other publications TiSEM 8651e281-4914-41f2-ac14-1, Tilburg University, School of Economics and Management.
    20. Sears, Joshua B. & Hitt, Michael A., 2023. "Post-acquisition integrative invention and differences in the quality of target and acquirer technological capabilities," Journal of Business Research, Elsevier, vol. 156(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:stratm:v:38:y:2017:i:12:p:2465-2485. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/0143-2095 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.