Browsing by Subject "merger"

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  • Vaara, Eero; Monin, Philippe (Organizational Science, pp. 1–20, 2008)
    This paper challenges the predominant view that legitimation is merely a specific phase in merger or acquisition processes. We argue that a better understanding of postmerger organizational dynamics calls for conceptualization of discursive legitimation as an inherent part of unfolding merger processes. In particular, we focus on the recursive relationship between legitimation and organizational action. We have two objectives: to outline a theoretical model that helps one to understand the dynamics of discursive legitimation and organizational action in postmerger organizations, and to examine a revealing case to distinguish the inherent risks and problems in discursive legitimation. Our case analysis focuses on the merger between the French pharmaceutical companies BioMérieux and Pierre Fabre. We adopt a critical multimethod approach and distinguish specific discursive dynamics and pathological tendencies in this case. The analysis highlights the unintended consequences of discursive legitimation, the central role of sensegiving and sensehiding in discursive legitimation, the inherently political nature of legitimation and the risks associated with politicization, the special problems associated with fashionable discourses and the role of the media, the use of specific discursive strategies for legitimation and delegitimation, and the crucial role of actual integration results. This analysis adds to the existing research on mergers and acquisitions by treating discursive legitimation as part of the merger dynamics. In particular, our case analysis provides a new explanation for merger failure. We also believe that the recursive model connecting discursive legitimation and delegitimation strategies to concrete organizational action makes a more general contribution to our understanding of organizational legitimation.
  • Vaara, Eero; Monin, Philippe (Institute for Operations Research and Management Sciences, 2010)
    This paper challenges the predominant view that legitimation is merely a specific phase in merger or acquisition processes. We argue that a better understanding of postmerger organizational dynamics calls for conceptualization of discursive legitimation as an inherent part of unfolding merger processes. In particular, we focus on the recursive relationship between legitimation and organizational action. We have two objectives: to outline a theoretical model that helps one to understand the dynamics of discursive legitimation and organizational action in postmerger organizations, and to examine a revealing case to distinguish the inherent risks and problems in discursive legitimation. Our case analysis focuses on the merger between the French pharmaceutical companies BioMérieux and Pierre Fabre. We adopt a critical multimethod approach and distinguish specific discursive dynamics and pathological tendencies in this case. The analysis highlights the unintended consequences of discursive legitimation, the central role of sensegiving and sensehiding in discursive legitimation, the inherently political nature of legitimation and the risks associated with politicization, the special problems associated with fashionable discourses and the role of the media, the use of specific discursive strategies for legitimation and delegitimation, and the crucial role of actual integration results. This analysis adds to the existing research on mergers and acquisitions by treating discursive legitimation as part of the merger dynamics. In particular, our case analysis provides a new explanation for merger failure. We also believe that the recursive model connecting discursive legitimation and delegitimation strategies to concrete organizational action makes a more general contribution to our understanding of organizational legitimation.
  • Vaara, Eero; Junni, Paulina; Sarala, Riikka M; Ehrnrooth, Mats; Koveshnikov, Alexei (Hanken School of Economics, 2013)
    This paper focuses on managers’ attributions of M&A performance. Our analysis indicates that there is a linear association between performance and attributions to cultural differences, which is moderated by prior experience. Furthermore, our results suggest that there is a curvilinear association between performance and attributions to managers’ actions, but we found no support for the moderating effect of experience for this association. By substantiating these attributional tendencies, our results contribute to research on M&As and studies on attribution more generally. In particular, our study helps to put cultural differences in perspective and cautions researchers and practitioners alike to avoid simplistic explanations of M&A performance.
  • Vaara, Eero; Tienari, Janne; Björkman, Ingmar (Nordic Organization Studies, 2012)
    We argue in this article that an ‘essentialist’ conception of knowledge has prevented both researchers and practitioners from understanding some of the fundamental reasons for the problems and disappointments often encountered in knowledge transfer processes in the context of mergers and acquisitions. As a step towards developing alternative approaches, we outline in this article a sensemaking perspective on the transfer of knowledge. We focus on a particularly revealing empirical case – the creation of the pan-Nordic financial services group called Nordea – to uncover sensemaking processes and patterns that are likely to characterize post-merger knowledge transfer. In our analysis, we identify four specific sensemaking processes around the transfer of ‘best practices’: identification, evaluation, (re)contextualization, and (re)configuration. We in particular highlight how these processes are characterized by inherent complexity, ambiguity and politics that are often bypassed in more ‘essentialist’ analyses.
  • Tienari, Janne; Søderberg, Anne-Marie; Holgersson, Charlotte; Vaara, Eero (Gender, Work and Organization. Vol. 12 No. 3 May 2005, 2005)
    In this article we explore ways in which vertical gender inequality is accomplished in discourse in the context of a recent chain of cross-border mergers and acquisitions that resulted in the formation of a multinational Nordic company. We analyse social interactions of ‘doing’ gender in interviews with male senior executives from Denmark, Finland and Sweden. We argue that their explanations for the absence of women in the top echelons of the company serve to distance vertical gender inequality. The main contribution of the article is an analysis of how national identities are discursively (re)constructed in such distancing. New insights are offered to studying gender in multinationals with a cross-cultural team of researchers. Our study sheds light on how gender intersects with nationality in shaping the multinational organization and the identities of male executives in globalizing business.
  • Angwin, Duncan; Vaara, Eero (Organization Studies, 2012)
    This editorial provides an introduction to the themes of this special issue on ‘connectivity’ in merging organizations. The growing impact of mergers and acquisitions on organizations, industries and economies has generated substantial research interest in the ensuing change processes from strategic, human resource and cultural perspectives. However, this research has focused on certain perspectives and failed to interrogate others. In the case of the cultural perspective, researchers have tended to focus on cultural differences between merging firms and how these differences may be bridged. This focus has provided important insights into the dynamics of these processes, but at the same time has constrained our appreciation of the richness of connectivity between organizations and their contexts as well as clouded our efforts in developing new concepts and angles for research. Through the focus of the special issue on connectivity, the strengths and limitations of the cultural paradigm in M&A research will be debated and a research agenda for the future suggested.
  • Junni, Paulina (Svenska handelshögskolan, 2012)
    Economics and Society – 241
    Acquisitions are among the most important growth and internationalization strategies for firms. Nevertheless, many acquisitions fail to create financial value for acquirers. An emerging body of literature that takes a knowledge-based view points to post-acquisition knowledge transfer as a key value creation mechanism in acquisitions. This stream of research has tended to view synergies as the result of either accessing new and unique knowledge from the partner firm, exploiting superior knowledge in the partner firm that makes it more effective, or by combining the knowledge of the acquisition partners in new ways. Whilst previous research has shed light on post-acquisition knowledge transfer, there are a number of gaps in our understanding of the factors that influence it. First, few studies have examined the relative impact of different knowledge transfer determinants. More specifically, socio-cultural and political factors have received less attention. Whilst case studies have included more variables, the small sample size of the studies limits their generalizability. Second, indirect relationships such as moderating variables and antecedents to independent variables have been explored less. Third, few larger-scale studies have examined knowledge transfer both from the acquiring firm to the target and from the target firm to the acquirer. The aim of this thesis is therefore to examine how socio-cultural factors, political factors and knowledge characteristics influence post-acquisition knowledge transfer in different directions: from the acquiring firm to the target and from the target firm to the acquirer. The thesis consists of four essays: one conceptual and three quantitative. These essays examine post-acquisition knowledge transfer from different theoretical perspectives. The empirical essays draw on unique datasets based on surveys that cover acquisitions by Finnish firms in Finland and abroad between 2001 and 2010. More specifically, Essay 1, which is a conceptual paper, develops an integrative model of post-acquisition knowledge transfer, emphasizing the dynamic aspects of the process. Essay 2 focuses on socio-political aspects of post-acquisition knowledge transfer, highlighting the negative effects of the ‘fear of exploitation’ on the part of the sender and the ‘fear of contamination’ on the part of the receiver on the process. Essay 3 connects the cultural and knowledge transfer discourses in acquisitions by examining how the causal ambiguity of the sender’s knowledge, cultural integration and partner attractiveness impact post-acquisition knowledge transfer both directly and indirectly. Finally, Essay 4 develops a multi-level model of post-acquisition knowledge transfer determinants and their antecedents. It examines the indirect effects of knowledge complementarity and complexity and of the target’s cultural acceptance and preservation on post-acquisition knowledge transfer through their influence on cultural learning and collective teaching initiatives on the part of the acquiring and target firms. This thesis offers three main contributions. First, by drawing on different management theories, this thesis shows the relative impact of socio-cultural and political factors and of knowledge characteristics on post-acquisition knowledge transfer. Second, the study highlights differences between how the factors mentioned above influence knowledge transfer, depending on the direction – from the acquirer to the target or vice versa. Third, by examining moderating relationships and antecedents to independent variables, the study sheds light on the more complex and indirect relationships between knowledge transfer determinants.
  • Risberg, Annette; Tienari, Janne; Vaara, Eero (Informa plc, 2010)
    In this study of symbolic power relations in a transnational merger, we suggest that the popular media can provide a significant arena for (re)constructing national identities and power in this kind of dramatic industrial restructuring, and are an under-utilized source of empirical data in research studies. Focusing on the press coverage of a recent Swedish-Finnish merger, we specify and illustrate a particular feature of discursive (re)construction of asymmetric power relations; superior (Swedish) and inferior (Finnish) national identities, which, we argue, are embedded in the history of colonization and domination between the two nations. The findings of the present study lead us to suggest that a lens taken from post-colonial theory is particularly useful in understanding the wider symbolic power implications of international industrial restructuring.
  • Vaara, Eero (Sage Publications, 2010)
    This article concentrates on the discursive constmction of success and failure in narratives of post-merger integration. Drawing on extensive interview material from eight Finnish-Swedish mergers and acquisitions, the empirical analysis leads to distinguishing four types of discourse — 'rationalistic', 'cultural', 'role-bound' and 'individualistic' — that narrators employ in recounting their experiences. In particular, the empirical material illustrates how the discursive frameworks enable specific (di.scursive) strategies and moves for (re)framing the success/failure, justification/legitimization of one's own actions, and (re)constniction of responsibility when dealing with socio-psychological pressures associated with success/failtire. The analysis also suggests that, as a result of making use of these discursive strategies and moves, success stories are likely to lead to overly optimistic or, in the case of failure stories, overly pessimistic views on the management's ability to control these change processes. Tliese findings imply that we should take the discursive elements that both constrain our descriptions and explanations seriously, and provide opportunities for more or less intentional (re)interpretations of postmerger integration or other organizational change processes.
  • Vaara, Eero; Tienari, Janne (2010)
    Although extant research has highlighted the role of discourse in the cultural construction of organizations, there is a need to elucidate the use of narratives as central discursive resources in unfolding organizational change. Hence, the objective of this article is to develop a new kind of antenarrative approach for the cultural analysis of organizational change. We use merging multinational corporations (MNCs) as a case in point. Our empirical analysis focuses on a revelatory case: the financial services group Nordea, which was built by combining Swedish, Finnish, Danish, and Norwegian corporations. We distinguish three types of antenarrative that provided alternatives for making sense of the merger: globalist, nationalist, and regionalist (Nordic) antenarratives. We focus on how these antenarratives were mobilized in intentional organizational storytelling to legitimate or resist change: globalist storytelling as a means to legitimate the merger and to create MNC identity, nationalist storytelling to relegitimate national identities and interests, Nordic storytelling to create regional identity, and the critical use of the globalist storytelling to challenge the Nordic identity. We conclude that organizational storytelling is characterized by polyphonic, stylistic, chronotopic, and architectonic dialogisms and by a dynamic between centering and decentering forces. This paper contributes to discourse-cultural studies of organizations by explaining how narrative constructions of identities and interests are used to legitimate or resist change. Furthermore, this analysis elucidates the dialogical dynamics of organizational storytelling and thereby opens up new avenues for the cultural analysis of organizations.
  • Vaara, Eero (Scandinavian Journal of Management, 2012)
    Real-life experiences of corporate mergers often tell of disappointment in terms of the synergistic benefits that fail to appear, or the severe organisational problems that arise. Although many studies have provided empirical material on internal divisions among actors coming from the previously separate organisations, we still know little about the sociopolitical forces at work in the upper echelons of corporate hierarchies. It is suggested in this paper that an examination of the emergent role identities in the upper echelons of a new corporate hierarchy can help us to understand the nature of these sociopolitical forces. The empirical analysis concentrates on a revealing merger case where Finnish Ovako and Swedish SKF Steel first joined forces, but where their organisational marriage broke down five years later. This analysis illustrates how behaviour consistent with the enacted role identities can create contradictory sociopolitical forces, and how this can lead to increasing tension and severe open conflict. The analysis suggests that a favourable turn in the business cycle is a condition that can easily hide such divisions with dramatic consequences later on.
  • Sarala, Riikka (Svenska handelshögskolan, 2008)
    Economics and Society
    Acquisitions are a central component of corporate strategy. They contribute to competitive advantage by offering possibilities for both cost reductions and for revenue enhancements. However, many acquisition benefits cannot be realized without a successful integration of the acquiring and the acquired firms. Previous research shows that national and organizational culture can play a major role in determining the integration outcomes. Therefore, the overall aim of the thesis is to map out and illustrate the impact mechanisms of cultural factors in post-acquisition integration in order to explain the cultural aspects of acquisitions. This study has three main contributions. First, the study shows that international and domestic acquisitions differ concerning both strategic and cultural fit. Second, the findings highlight the importance of acculturation and cultural integration in determining post-acquisition outcomes. Finally, the study uncovers several impact mechanisms that shed light to the contradictory results related to cultural differences in previous research.
  • Vaara, Eero; Tienari, Janne; Säntti, Risto (Sage Publications, 2010)
    This article focuses on cultural identity-building in the cross-border merger context. To provide an alternative to the dominant essentialist analyses of cultures and cultural differences, cultural identitybuilding is conceptualized as a metaphoric process. The focus is on two processes inherent in the cross-border merger context: construction of images of Us and Them and construction of images of a Common Future. Based on an analysis of a special metaphor exercise carried out in a recent Finnish–Swedish merger, the article illustrates how the metaphoric perspective reveals specific cognitive, emotional and political aspects of cultural identity-building that easily remain ‘hidden’ in the case of more traditional approaches.
  • Riad, Sally; Vaara, Eero (John Wiley & Sons, Inc, 2010)
    International mergers and acquisitions (M&As) often invoke national identification and national cultural differences. We argue that metonymy is a central linguistic resource through which national cultural identities and differences are reproduced in media accounts of international M&As. In this paper, we focus on two revealing cases: the acquisition of American IBM Personal Computer Division (PCD) by the Chinese company Lenovo and the acquisition of American Anheuser-Busch (A-B) by the Belgian-Brazilian company InBev. First, we identify the forms, functions and frequencies of national metonymy in media accounts of these cases. We present a typology that classifies varieties of national metonymy in international M&As. Second, we demonstrate how these metonyms combine with metaphor to generate evocative imagery, engaging wit, and subversive irony. Our findings show that national metonymy contributes to the construction of emotive frames, stereotypes, ideological differences, and threats. Combinations of national metonymy with metaphor also provide powerful means to construct cultural differences. However, combinations of metonymy with wit and irony enable the play on meanings that overturns and resists national and cultural stereotypes. This is the first study to unpack the deployment of metonymy in accounts of international M&As. In doing so, it also opens up new avenues for research into international management and the analysis of tropes in management and organization.