Integration decisions are not isolated, as they are embedded in an organizational context. Using a multi-country sample (Nordics, German speaking Europe, and China) of small- and medium-sized acquirers, we explore the influence of firm strategic orientations on how managers conceptualize acquisitions, make integration decisions, and impact acquisition performance. Both market- and entrepreneurial-oriented firms coordinate activities following an acquisition, but they do so differently. Entrepreneurial-oriented acquirers use human integration to align target managers with common goals and reinforce their decision-making autonomy. In contrast, market-oriented acquirers strive for functional integration and use human integration to reduce target firm managers' decision-making autonomy. Thus, achieving coordination after an acquisition can follow different paths that are closely aligned with the strategic orientation of the acquirer. In other words, different strategic orientations guide managers' decisions, resulting in different paths to acquisition success.

The effects of acquisition experience on acquisition performance are inherently complex, and research results are mixed and highly debated. Prior research has found both positive, negative and on aggregated level insignificant effects of acquisition experience on acquirer performance. We develop and test how recent acquisition experience interacts with capabilities required during different phases of the acquisition process. Particularly, we focus on sensing in the pre-acquisition stage, seizing during deal completion, and transforming during integration. Using unique survey data from German mid-sized acquirers, our results show that recent acquisition experience interacts positively with capabilities that involve repetitive elements across different deals, such as deal completion and integration. However, it is detrimental during phases containing high degrees of novelty, such as sensing of opportunities. By identifying when recent acquisition experience is beneficial in combination with capabilities, our results reconcile conflicting research findings and demonstrate that the effect of acquisition experience is contextual.

When managers anticipate synergy gains from an acquisition, they may pay more for target firm assets than their fair value, creating goodwill on an acquiring firm’s balance sheet. If synergy is not subsequently realized and the fair value of goodwill falls below its book value, goodwill write-downs result from annual impairment tests. Managers and investors may be able to avoid value destroying acquisitions if goodwill write-downs can be predicted from information at acquisition completion. We use purchase price allocation information from SEC 10-K filings to evaluate goodwill write-downs of prior acquisitions. For a sample of 421 U.S. acquisitions with a subset of 49 that experienced deal-specific goodwill write-downs, we find that firms acquiring target firms with larger relative size are more likely to experience goodwill write-downs. However, this effect is mitigated when a target firm’s value resides in identifiable intangible assets (e.g., brands and patents), suggesting acquirers may have private information about intangible asset combinations. Implications for management research and practice, as well as government policy are discussed.

Continued use of acquisitions despite evidence that they do not improve firm performance suggests that challenges associated with acquisitions may be underestimated by managers. We examine how employee resistance is influenced by acquisition integration and how it results in lower acquisition performance. Specifically, we examine different impacts of task and human integration on employee resistance in a sample of 92 Nordic mid-size firms. Task integration focuses on achieving synergies from increased efficiency; however, it can increase employee resistance, leading to lower acquisition performance, which is exacerbated by slow integration. Meanwhile, human integration can reduce employee resistance, and this effect is stronger for experienced acquirers. Our results support the importance of considering both task and human integration, as their influence on employee resistance varies. Additional implications for management research and practice are identified.

Research suggests that M&A performance improves through routinization and/or codified experience. Traditionally, acquisition research has drawn a direct link between the two knowledge accumulation mechanisms and acquisition performance. Yet, how lessons learned are captured and applied in subsequent events remains largely unanswered. We argue that routinization and codification may both result in standardized acquisition integration approaches that promise greater efficiency. Our results show that experience can be captured and applied through standardized acquisition integration approaches. Importantly, our findings show that a strategic M&A intent influences the relationships between routinization and codified experience, and standardized acquisition integration approaches. We find that a strong strategic M&A intent strengthens the relationship between codification and standardization, but it weakens the relationship between routinization and standardization. We test our hypotheses with a combination of primary survey and secondary data to offer managerial and research insights. By combining three pertinent M&A literature streams – acquisition experience, acquisition integration and acquisition intent – we shed light on the importance of organizational learning and strategic direction on acquisition performance.

The high level of acquisition activity justifies continued research into improving its outcomes. Still, this requires an appreciation for what is known. We outline summarize existing research, and then go on to identify research needs with a focus on introducing topics covered in the book. The intent behind the collection of chapters is that asking new questions can advance a research agenda for mergers and acquisitions. We summarize chapters re-thinking constructs and contexts for acquisition research, as well as options for pursuing novel perspectives.

Research has yet to explain how firms with acquisition experience can improve their success with acquisitions. With a multi-national sample, we study how acquisition experience can lead to integration capabilities that impact acquisition outcomes. We argue that different types of knowledge (tacit or explicit) and organizational designs (more centralized vs. less centralized) influence the development of integration capabilities. We demonstrate that tacit and explicit knowledge provide multiple paths to acquisition success for acquiring firms, and this can explain conflicting findings in existing research. More specifically, less centralized organizational designs lower the effectiveness of tacit knowledge in developing an integration capability, but centralization is effective for explicit knowledge. Additional implications for management research and practice are provided.

Environmental, social, and governance (ESG) expectations from stakeholders affect firm decisions. We investigate ESG acquisitions with a focus on how a pre-deal ESG gap influences how acquirers' structure ESG deals strategically and their outcomes in terms of combined ESG performance post-acquisition. Drawing on relative capabilities and signaling research, with an international sample of 340 ESG deals, we find that acquirers with a higher ESG score relative to the target (i.e., low-ESG acquisitions) are more likely to target smaller firms, use cash as method of payment, and complete deals faster. We also show that low-ESG deals lead to an average increase in the combined entity's ESG performance in the 3 years after the acquisition, thus indicating ESG corrective acquisitions as an opportunity for ESG capabilities transfer and improvement. However, effects are influenced by an acquirer's embeddedness in the European institutional context where ESG stakeholder expectations are more developed.

A contrast of comparable programs involving fighter aircraft and unmanned aircraft vehicle (UAV) programs within the United States and Israel highlights the need for strategic agility in defense procurement. We find that increased political oversight of defense procurement tends to increase cost and time required to field capability, creating a need to balance the benefits and cost of oversight. The comparison of acquisition programs offers additional policy recommendations in the design and implementation of defense procurement.

Purpose The authors propose and test a theoretical framework that develops and analyzes precursors to firm acquisitions to determine if acquirers differ from other firms. Design/methodology/approach The authors use longitudinal, archival data from a sample of the largest firms in the global pharmaceutical industry from 1991 to 2012 with 1,327 firm-year observations. Findings The authors integrate prior research to show that the firm characteristics involving (1) R&D investment, (2) prior experience and (3) network centrality influence the likelihood that a firm will complete an acquisition. Originality/value In contrast to research focusing on the performance of acquiring firms, the authors show that firm characteristics predict acquisition activity by highlighting that acquiring firms differ from other firms. The authors also develop how network synergies can be realized by acquirers that have information advantages from more central network positions.