Post-Acquisition Integration: A Two-Level Framework Lessons from Integration Management of Cross-Border Acquisitions in the Global Automobile Industry

Abstract

This paper explores what differentiates success from failure in post-acquisition integration. It seeks to overcome some of the limitations of previous research by adopting a more holistic and dynamic examination of the process and by focusing on aspects that can be readily applied in practice. Four cases of mergers and acquisitions (M&A) in the global automobile industry are examined using secondary data and taking a grounded theory approach. The four cases comprise two pairs of successes and two pairs of failures. Two of the pairs comprise established multinational companies, while two others comprise emerging multinational companies’ acquisitions of Korean automakers; in each case, there was one successful M&A and one failure. It is inducted that what differentiates the successful cases from the failures is their different approaches to two common tensions in post-acquisition integration, namely, their approaches to integration strategy and people issues. A two-level framework is proposed in which post-integration is managed simultaneously and dynamically at the strategic and people levels. These inductive findings, if verified by a more broadly based empirical examination, will extend M&A theory by providing a more integrated and dynamic approach to post-acquisition integration, in which strategic and people perspectives are jointly taken into account and interact with each other, thereby creating value for both acquiring and acquired firms.

Citation

Zhang, X.(. and Stening, B.W. (2014), "Post-Acquisition Integration: A Two-Level Framework Lessons from Integration Management of Cross-Border Acquisitions in the Global Automobile Industry", Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 12), Emerald Group Publishing Limited, Leeds, pp. 75-111. https://doi.org/10.1108/S1479-361X(2013)0000012007