Integration of Non‐market and Market Activities in Cross‐border Mergers and Acquisitions

Abstract

Drawing on resource dependence theory and the resource‐based view, we investigate the interactions between market and non‐market activities of firms in the context of the post‐merger integration phase in cross‐border mergers and acquisitions (M&As). Based on a cross‐country survey of 111 M&A practitioners who were personally involved in cross‐border M&As around the world, we test seven hypotheses on various market and non‐market aspects of post‐merger integration. We find a positive correlation between buffering strategies and adaptive capabilities in the non‐market environment and between bridging and adaptive capabilities in the market environment. However, we could not find any significant correlation between buffering and adaptive capabilities in the market environment and bridging and adaptive capabilities in the non‐market environment. We also find that adaptability in the non‐market environment is positively correlated with adaptability in the market environment, and in turn adaptability in the market environment leads to positive organizational performance of a cross‐border M&A. These results provide further support for the value of the alignment between market and non‐market activities and help to fill a gap in the literature on the market−non‐market interactions in post‐merger integration.

Big Data Analytics Capabilities and Innovation: The Mediating Role of Dynamic Capabilities and Moderating Effect of the Environment

“…It is considered that PLS-SEM is an appropriate methodology for this study, since it permits the simultaneous estimation of multiple relationships between one or more independent variables and one or more dependent variables (Hair, Ringle and Sarstedt, 2011); PLS-SEM is a soft modelling technique and is variance-based, with the advantage of allowing (i) flexibility with respect to the assumptions on multivariate normality, (ii) usage of both reflective and formative constructs, (iii) the ability to analyse complex models using smaller samples, and (iv) potential use as a predictive tool for theory-building (Nair et al, 2018). It is widely used in analysing data for the estimation of complex relationships between constructs in many subject areas, including in business and management research (Ahammad et al, 2017;West et al, 2016). In addition, PLS-SEM enables the analysis of indirect and total effects, making it possible not only simultaneously to assess the relationships between multi-item constructs, but also to reduce the overall error associated with the model (Astrachan, Patel and Wanzenried, 2014).…”

Non‐market Social and Political Strategies – New Integrative Approaches and Interdisciplinary Borrowings

“…The papers by Liedong, Mellahi and Rajwani (2017) and Ahammad, Tarba, Frynas and Scola (2017) provide some novel insights on the integration of social and political strategies and the integration of market and non-market strategies. But they have practical implications too.…”

The interplay of corporate social responsibility and corporate political activity in emerging markets: The role of strategic flexibility in non‐market strategies

“…Corporate social responsibility (CSR) and corporate political activities were considered as separate practices with no linkage whatsoever (Ahammad, Tarba, Frynas, & Scola, ; Anastasiadis, ; Frynas, Child, & Tarba, ; Mellahi, Frynas, Sun, & Siegel, ). However, a new stream of non‐market research suggests that the interaction between corporate social responsibility and corporate political activities leads to better economic performance because of their complementary nature (Anastasiadis, Moon, & Humphreys, ; Boddewyn & Buckley, ; den Hond, Rehbein, de Bakker, & Lankveld, ; Fooks, Gilmore, Collin, Holden, & Lee, ; Liedong, Rajwani, & Mellahi, ; Rodrigo, Duran, & Arenas, ; Singer, ).…”

“…Frynas et al () who articulate the need for an integration of corporate social responsibility and corporate political activities in non‐market studies state that “the lack of integration of the political and social domains of non‐market strategy research manifests itself inter alia in the failure to understand the substitution effects between company political and social strategies” (p. 560). Yet, the non‐market strategy literature is mainly silent about which mechanisms (e.g., strategic flexibility) firms can use to exploit the complementary effects of corporate social responsibility and corporate political activities (Ahammad et al, ; Liedong et al, ; Mellahi et al, ; Sirmon, Hitt, Ireland, & Gilbert, ).…”