This chapter uses insights from the broad literature of corporate organization and governance, including the roles of mergers and acquisitions, in order to cast a light on the current debates regarding the UK interregional economic systems and its relationship with the central–sub-central economic governance of the UK. These lines of organizational thinking, and especially those which focus on how the logic and behavior of the organizational fits with economic and technological environment in which the organization operates, are very useful in providing a methodological framing for discussing the priorities and challenges associated with reforming the UK central–sub-central governance system. In the UK, the governance system has become ever more mismatched and detached from the regional economic realities, and this chapter therefore uses the organizational logic associated with large multi-plant and multi-national firms in order to consider how to rectify this mismatch. Following this logic, the chapter demonstrates that while devolved decision-making is broadly desirable, the specific financial and fiscal details of devolved system are crucial in terms of determining whether the reformed system is likely to be effective, and that many of these details have barely, if at all, yet been sufficiently articulated.
Over the past decade, environmental, social, and governance (ESG) considerations have become increasingly integral to corporate strategic investment decision-making processes, with a particular emphasis on the relationship between ESG factors and mergers and acquisitions (M&As). As businesses face growing pressure to align with sustainability goals, ESG performance has become a key metric for assessing long-term value, fostering responsible business practices, and addressing the concerns of stakeholders. This shift has led corporate boards to reconsider the role of M&As in driving sustainable growth and creating value in a rapidly changing global market. The UK, as a prominent global financial hub, has been at the forefront of these developments, with UK-based firms often using M&A as a tool to enhance their ESG portfolios. In contrast, foreign investors view the UK not only as a gateway to European markets but also as a testing ground for integrating ESG principles within corporate strategies. A notable aspect of this is the UK’s regulatory framework for corporate ESG disclosure, which serves as an important attraction for international investors. A critical factor in driving ESG performance during M&As is the green governance structure, which acts as a pre-decision control mechanism, shaping the strategic direction of M&A deals. This chapter sheds light on the interdependencies between the above-stated constructs.
Despite its enduring popularity as a critical strategy for corporate growth and transformation, most mergers and acquisitions (M&As) fail to create value for firm stakeholders. While post-merger integration is widely recognized as the phase where value destruction often occurs, the pre-deal decision-making phase—characterized by commercially sensitive, confidential, and highly judgmental decisions—plays an equally pivotal role. Key decisions, such as selecting the target company and determining the purchase price, are fraught with complexity and ambiguity. Mistakes made during this phase inevitably surface in post-merger integration, fundamentally influencing the overall success or failure of the acquisition. Acquisitions are complex, ambiguous, and often controversial strategic decisions. The lack of theoretical insights and empirical evidence surrounding pre-deal decision-making hinders a comprehensive understanding of this critical stage. This chapter develops an integrative framework that contextualizes the pre-deal phase of M&A by integrating four key categories of contextual factors: top management team (TMT), firm characteristics, deal-specific characteristics, and environmental factors. By advancing the theoretical understanding of how these factors shape pre-deal decision-making, this chapter provides a contextualized explanation of the processes underpinning acquisition performance, offering valuable insights for both researchers and practitioners.
Planning is very salient to the practice of merger integration; however, it has been marginalized in recent organizational research. Moreover, whereas the literature on mergers has given little attention to planning, the latter is a central activity in public management. In this chapter, we examine the dynamics of merger planning, generally, and specifically in the context of the public sector. The study is positioned at the nexus of the literatures on merger integration, planning, and public management. It scrutinizes the dynamics of planning by focusing on the role of value judgments in shaping this activity. The analysis uses case-based material to outline and illustrate themes in merger integration that matter to planning and the public sector. The chapter offers two readings of integration planning in this case. The first shorter reading presents an overview of the dynamics unfolding in this study by juxtaposing them against respective themes in the literature on merger planning. The second, more detailed reading focuses on dynamics specific to the public sector. The analysis shows how contextual value judgments shape participants’ views on planning, specifically through the legacies of managerialism, public choice theory, and public participation. It identifies and illustrates three respective overarching themes that matter to public sector mergers: the planning ethic, the fear of capture, and the normativity of consultation. While these themes have constructive effects on merger integration, they also have constraining effects with implications for learning, (mis)trust and communication. The work concludes by outlining an agenda for future research.
Private equity (PE)-backed buy-and-build (B&B) strategies have emerged as a prominent avenue for creating value through inorganic growth. But while B&B strategies have gained popularity, the existing literature has primarily focused on specific facets, lacking a comprehensive understanding of the interplay between the “buy” and “build” components. Our systematic literature review bridges this gap by providing an integrated analysis of B&B strategies. In doing so, we follow an established framework, categorizing the B&B process into antecedents, outcomes, mediators, and moderators. The review underscores the unique characteristics of B&B strategies, amalgamating PE advantages with corporate mergers and acquisitions (M&As). By adopting a multidisciplinary perspective, we further synthesize and organize existing empirical findings. Our chapter finally serves as a robust foundation for future research, shedding light on the nuanced dynamics of B&B strategies and their impact on overall firm success.
The issue of rising societal inequality is at the forefront of global policy debates. Research in management science and related fields explores how firms and their agency enact existing societal inequalities, while sociologists go a step further and suggest that firms can exacerbate inequalities by, e.g., reproducing firm level inequalities across contexts. The key focus of the international business (IB) field is to study how firms operate abroad, yet we know very little about whether and how multinationals transfer/reproduce unequal firm practices to other countries. I contribute to this line of research by evaluating related existing knowledge and offering some future research directions. I focus on cross-border mergers and acquisitions (M&As), a key IB phenomena that involves gaining a significant level of equity and control of a firm abroad. As the theoretical lens in my data collection and content analysis, I use Acker’s model of firm inequality regimes, the most comprehensive framework of firm practices and processes that relate to inequality. Based on a sample of 79 studies extracted using Scopus, I find that existing research is in nascent stage and future research could: explore different bases of inequality as well as intersectionality; investigate the phenomena on different levels particularly micro and multilevel; fully unpack whether, how, under what conditions and, perhaps most importantly, evidence the consequences of transferring/reproducing inequality regimes in the cross-border M&A context.
This chapter begins with a brief inquiry and introduction followed by a review related to merger and acquisition (M&A) constructs which includes the process, definitions such as behavior due diligence (BDD), and added value. As the area of pre-merger M&As continues to be understudied and a significant factor in ultimately driving failure (or success), a review and update of the current state of affairs sets the stage for a quantitative Web of Science database search. After a brief presentation on database search directions a report of 20 pre-merger M&A topic searches, spanning two time periods (2000–2016 and 2017–2024) follows. Next, a brief literature review and synopsis of earlier work addressing M&A, BDD, and leaders and managers precedes a literature review on the “current state of affairs years later” which includes a number of areas that merit attention in the pre-M&A phase. This chapter will close with a conclusion and recommendations of “going forward.”
Often, strategically assertive mergers and acquisitions (M&As) fail to be consummated for valuation risk or for the inability of the buyer to mitigate such risk. Buying and selling businesses is complex. A witty deal structuring may help cover implied valuation risk embedded in the future free cash flows of the target firm. A buyer tends to undervalue a target due to a risk-induced outcome. When the buyer is apprehensive about the fair price of the target, he thinks of protection from valuation risk either by insuring a post-purchase performance guarantee given by the seller, known as representation and warranty insurance (RWI), or a deferred payoff called earn-out payment (EOP). In RWI, the buyer transfers a portion of the valuation risk to an insurance company, while in EOP, a part of the payment is withheld and subsequently paid depending upon the future financial performance level of the acquired business. There are circumstances when the degree of uncertainty about the target firm’s future cash flows is so high that it pushes both parties outside the likely agreement zone (LAZ). The study of RWI vis-à-vis EOP in M&A is randomly found in scholarly articles, and due to this reason, this chapter attempts to establish which tool is superior to the other for valuation correction.
We call the attention of management scholars to the methodological traps inherent to data collected using self-reported emotions experienced in the context of merger integration. In a systematic review, we identified fifteen peer-reviewed empirical articles where authors discuss the impact of emotions in post-merger situations based on interview data. We found that authors of twelve studies appear to have been unaware of the problems of the interview method; or implicitly accepted the inherent and unavoidable distortions and biases of self-reported emotions over time. We argue that these distortions and biases represent threats to data validity and reliability. In support of this position, we cite literature suggesting it is difficult for researchers to reconstruct emotions experienced based on interviews conducted a few weeks after the events, so that results based on this method may not be valid. The authors of these articles all relied on data collected several months or years after merger events, and then sought to assess the impact of emotions at the time of the merger. As a consequence, conclusions based on these data may be unreliable. We conclude with recommendations for overcoming this potential source of invalid data in post-merger integration studies. Keywords: Emotions, interview, merger, change process, delayed recall
The speed of integration has been a salient and longstanding topic in the literature on managing mergers and acquisitions. Yet over the decades, speed has also been the subject of extensive debate. While many have advocated for fast integration, others have recommended a more measured pace. In this chapter, the authors reflect on the discussion by canvasing the variety of views on the speed of integration. The work is positioned at the nexus of the literature on mergers with that on stakeholders, in particular its attention to urgency in stakeholder management. It approaches urgency in mergers and acquisitions as a “dilemma of stake,” a new lens on a well-established but challenging topic. The study draws on ethnographic research to examine accounts of speed of integration in a New Zealand public sector merger. The chapter juxtaposes varied views on the topic against the respective arguments within the merger literature. It examines the overarching themes of “go slow” and the “need for speed” by attending to the tensions between a prosocial service ethos on the one hand and a managerialist ethos on the other. The explication of the respective dilemmas of stake shows how participants articulate their views on urgency both in terms of its effects on their individual professional role, their own stake, as well as in terms of the effects on employees as internal stakeholders. The analysis also explores the role of internal and external context in shaping the views on urgency in merger integration. The work concludes by outlining an agenda for future research.
