Abstract:Mergers and acquisitions (M&A) research has principally focused on attributes of the acquiring firm and post-acquisition outcomes. To extend our knowledge, we focus on external factors, in particular rival responses, and explore when and how rivals respond to their competitor's acquisitions. Leveraging the awareness-motivation-capability (AMC) framework, we predict and find evidence that a rival's dependence on markets in common with the acquirer, resourse similarity between rival and acquirer, and a rival's o… Show more
“…Future research could consider mobility in industries that have different roles for professionals and labour market dynamics. For instance, research scientists in the pharmaceutical industry have more specificity with high value non‐human assets, leading to more intense rivalries with competitors and potentially predatory poaching behaviours (Gardner, ; Uhlenbruck et al, ). Alternatively, turnover may benefit both the hiring and exited firms when there is repeated hiring of alumni from collaborating suppliers (Brymer et al, ; Carnahan and Somaya, ).…”
Context-emergent turnover theory (CETT) focuses on the contextual factors that influence the turnover-firm performance relationship, yet to date, has not investigated how particular firms weather the detrimental effects of loss more effectively than others. We build on the CETT literature by theorizing that different human resource bundling strategies are central contextual factors that impact the effects of human resource exit. Specifically, we argue that bundling human resources prior to exit in greater concentrations deflects some harmful effects of turnover. Pre-exit bundling ensures that remaining professionals post-exit retain both the capacity necessary to meet job demands and the critical tacit knowledge of firm routines that maintain effectiveness. Our study examines the loss of professionals in a panel of the largest U.S.-based law firms. We find general support for our theory. Results show that losing professionals when the pre-exit bundling had produced greater service-, hiring-, and geographic-concentration lessens the negative effects of loss.
“…Future research could consider mobility in industries that have different roles for professionals and labour market dynamics. For instance, research scientists in the pharmaceutical industry have more specificity with high value non‐human assets, leading to more intense rivalries with competitors and potentially predatory poaching behaviours (Gardner, ; Uhlenbruck et al, ). Alternatively, turnover may benefit both the hiring and exited firms when there is repeated hiring of alumni from collaborating suppliers (Brymer et al, ; Carnahan and Somaya, ).…”
Context-emergent turnover theory (CETT) focuses on the contextual factors that influence the turnover-firm performance relationship, yet to date, has not investigated how particular firms weather the detrimental effects of loss more effectively than others. We build on the CETT literature by theorizing that different human resource bundling strategies are central contextual factors that impact the effects of human resource exit. Specifically, we argue that bundling human resources prior to exit in greater concentrations deflects some harmful effects of turnover. Pre-exit bundling ensures that remaining professionals post-exit retain both the capacity necessary to meet job demands and the critical tacit knowledge of firm routines that maintain effectiveness. Our study examines the loss of professionals in a panel of the largest U.S.-based law firms. We find general support for our theory. Results show that losing professionals when the pre-exit bundling had produced greater service-, hiring-, and geographic-concentration lessens the negative effects of loss.
“…Three streams of literature are related to the subject. First, competitive dynamics literature examines rivals' responses to M&As completed by their competitors, but the reason the studies in this field choose to focus on rivals' responses is to explain acquiring firms' approximately zero or slight positive returns from M&As [21]. Second, quite a few studies explore the spillover effects of international M&As at the industry level in emerging markets (EMs).…”
Section: Literature Review and Hypothesesmentioning
International mergers and acquisitions (M&As) have been increasingly used by emerging market enterprises (EMEs) as a springboard for strategic assets to overcome latecomer disadvantages and build sustainable competitive advantages. While current literature only focuses on the M&As’ impacts on acquirers, little is known about the impacts of EMEs’ international M&As on their external stakeholders, such as rival firms. Based on the longitudinal data covering 325 large international M&As completed by Chinese public manufacturing firms during 2009–2015, empirical results show that international M&As at the industry level have significant negative influence on the sustainable performance of acquirers’ rivals, and these negative relationship will be accentuated when the international M&As are horizontal M&As, when rivals are carrying out cost leadership strategy, and when those M&As are completed in the high-tech industry. This study enriches the literature of international M&As and the economic pillar of sustainability by pushing current research toward rival’s perspective and denotes that firms need to consider the potential negative impact on the sustainability of their outside stakeholders (e.g., other firms and whole industry). It also generates practical implications for firms to actively deal with potential negative effects of competitors’ international M&As on their sustainable performance, especially those players in the high-tech industry.
Resilience has received increasing attention in organisational research; however, it has remained understudied in the context of acquisitions. This is surprising given acquisitions involve challenging events that would benefit from a consideration of organisational resilience. We outline how flexibility and redundancy, as dimensions of organisational resilience, influence acquisition outcomes. We find flexibility can lower negative impacts of competitor retaliation and employee resistance during acquisition integration, but this depends on a decentralised approach to managing integration. Additionally, it appears developing organisational resilience depends on acquisition experience.
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