Covering the globe by cross-border acquisitions : what is the impact of previous cross-border acquisition experiences on the acquisition implementatino regarding the acquired firm's autonomy, communication, retention and knowledge transfer?

Diepenmaat, B.A. (2012) Covering the globe by cross-border acquisitions : what is the impact of previous cross-border acquisition experiences on the acquisition implementatino regarding the acquired firm's autonomy, communication, retention and knowledge transfer?

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Abstract:Over the years, many companies have been taken over by competitors both nationally and internationally. Globalization is one of the causes that acquisitions are not taken place only in the home country but also abroad. Due to the removal of trade barriers, taxes and other impediments that suppresses trade, it has become much more interesting for companies to look outside their national borders for expansion, cost reduction and other strategies. One way to achieve this is by acquiring another business (acquisition). The implementation of an acquisition raises questions, for example: how to preserve valuable knowledge of the acquired firm and how to integrate these resources? If an acquisition is not implemented correctly, it will cost time and money and therefore it is important to understand how to implement an acquisition properly and if experience with acquisitions can help with that. According to several studies, 60-70 per cent of the acquisitions fail to reach their goals. Many studies have been executed to study the effect of acquisition experience on acquisition performance. In this study, the effect of acquisition experience on the implementation process in subsequent cross-border acquisitions will be described. What is the impact of previous cross-border acquisition experiences on the acquisition implementation regarding the acquired firm’s autonomy, communication, retention and knowledge transfer? Six cases have been thoroughly examined to give indications about the positive or negative effects of cross-border acquisition experience on the impact on the implementation process. Results will show managers use their gained experience in the subsequent acquisitions. They use their experience to mitigate both internal and external negative factors, know better how to avoid or manage crucial negative events, know how to use the four major determinants more properly, and in the end know how to implement an acquisition more properly and smoothly. Clear communication appears to be one of the most important factors, while implementing a cross border acquisitions. Communication strategies have changed from providing little information to setting up communication programs to enhance the success of the implementation. Results also indicate that due to cross-border experiences in the past, the level of granted autonomy has been changed. The culture of both the target company and the target country also impacts the implementation. Experiences have changed the way of implementation due to the differences in culture. The implementation of knowledge transfer appears to be heavily reliable on the implementation of the other three factors. Therefore, results indicate that cross-border acquisition experience will help acquirers to implement an acquisition more successfully.
Item Type:Essay (Master)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:Business Administration MSc (60644)
Link to this item:http://purl.utwente.nl/essays/61506
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