How Industry Lifecycle Sets Boundary Conditions for M&A Integration

Florian Bauer, Mai Anh Dao, Kurt Matzler, Shlomo Y. Tarba

    Research output: Contribution to journalArticlepeer-review

    17 Citations (Scopus)

    Abstract

    Value creation in acquisitions is tightly connected with actions taken during integration. However, research on integration mainly concentrates on integration typologies or on the autonomy vs. absorption debate, each stream with empirical evidence for respective benefits. We argue and give empirical evidence that there is no “one size fits all” approach for integration but rather an interdependency of the suitability of integration related decisions with the industry lifecycle. We demonstrate that beneficial or detrimental effects of degree of integration, formal, and informal coordination mechanisms are context-specific and differ significantly in growing, mature, and declining industries. We show that the degree of integration only has a significant beneficial effect in mature industries, while no effect in cases of declining and fast growing industries is observable. Here we indicate that in acquisitions with buyers in declining industries, formal coordination mechanisms are most beneficial, while in growing industries only informal coordination mechanisms are valuable.

    Original languageEnglish
    Pages (from-to)501-517
    Number of pages17
    JournalLong Range Planning
    Volume50
    Issue number4
    DOIs
    Publication statusPublished - Aug 2017

    ASJC Scopus subject areas

    • Strategy and Management
    • Finance
    • Geography, Planning and Development

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