The Impact of Organizational Culture Differences, Synergy Potential, and Autonomy Granted to the Acquired High-Tech Firms on the M&A Performance

Abstract

The aim of the article is to examine the factors influencing the overall acquisition performance of the companies acquiring the high-tech firms. The data were gathered during 2007-2009 via a cross-sectional survey using a questionnaire on a sample of Israeli high-tech firms that were engaged in acquisitions. Given its global leading role in the high-tech sector, Israel constitutes an important site for the study of mergers in this industrial domain. The findings indicate that synergy potential (similarities and complementarities) between high-tech merging firms, effectiveness of post-acquisition integration, and organizational cultural differences positively influence the overall acquisition performance merging high-tech firms. Moreover, our findings suggest that organizational cultural differences moderate the relationship between effectiveness of post-acquisition integration and overall acquisition performance as such that positive effect of effectiveness of post-acquisition integration is higher when organizational differences are higher. Our findings indicate that organizational cultural differences also positively moderate the relationship between autonomy granted and the overall acquisition performance. An important contribution of the present article is the development of a conceptual framework incorporating the direct and moderating effect of organizational cultural differences and autonomy granted on the overall performance of acquisition.

The Effect of Acquisition Synergy on Firm Perfomance moderated by Firm Reputation

“…Similar studies have been investigated by other researchers, such as (Cheny & Gayle, 2018;Hamza, Sghaier, & Thraya, 2016;Meier & Schier, 2016;Rabier, 2017;Tarba, Ahammad, Junni, Stokes, & Morag, 2017;Yaghoubi, Yaghoubi, Locke, & Gibb, 2016) who examine the synergy of operations as a goal of acquisition of company performance. Whereas (Duan, & Jin, 2019;Duan & Li, 2015;Erel, Jang, & Weisbach, 2015;Hamza et al, 2016;Yaghoubi et al, 2016) examine financial synergy as an acquisition goal to company performance but there is no research that uses firm reputation as a mediator.…”

“…It can also have the potential for adding new products (Hoberg & Phillips, 2010). Acquisitions in the same industry can also reduce competitors in the market, reduce choice in customers, increase negotiation power to customers which can increase the company's market share (Basmah & Rahatullah, 2014;Cheny & Gayle, 2018) and reduced the number of competitors in the market which will make the company focus more on market expansion (Hamza et al, 2016;Tarba et al, 2017) so that it can improve company performance directly.…”

Integration modes, global networks, and knowledge diffusion in overseas M&As by emerging market firms

“…Post-merger integration research has received significant attention in the M&A scholarly community (Weber and Tarba, 2009;Tarba et al, 2017). The post-merger integration stage may significantly impact post-merger technological innovation and knowledge diffusion in M&As (Paruchuri et al, 2006;Puranam et al, 2006).…”

Identifying and Managing Key Success Factors for Sino-Estonian Joint Ventures

“…Although organizational cultural differences are associated with post-acquisition implementation issues, it leads to higher acquisition performance [16]. While synergy potential and culture have received extensive attention in the study of international business and organizational behavior but so far there is a limited understanding of how and when synergy potential, autonomy, the effectiveness of postmerger integration, and organizational cultural differences affect merger performance [6]. According to Synergy potential, there are many factors that the Chinese company needs to take into consideration.…”