Social capital is not for sale: a supply network perspective on mergers and acquisitions
ISSN: 1359-8546
Article publication date: 14 August 2018
Issue publication date: 17 October 2018
Abstract
Purpose
Mergers and acquisitions (M&As) often lead to significant changes in the focal supply networks, hence disrupting firm-level relationships. Little is known about the supply network implications of M&As, which can be a major issue, especially for firms acquiring competitors that share suppliers, customers and associated resources. Using social capital as a theoretical lens, this research aims to investigate the implications of an acquisition on supply network relationships.
Design/methodology/approach
The acquisition of a large truck manufacturer by its competitor is investigated using an exploratory case study methodology. A total of 24 interviews were conducted across ten companies in the focal supply network with an analysis of financial data.
Findings
The findings from the study provide evidence that firms seeking to acquire such relationships cannot directly buy the social capital embedded within those relationships. They identify pre-acquisition characteristics and post-integration factors to understand how the supply network as a whole draws on the structural, cognitive and relational dimensions of social capital to address discrepancies in the merging network.
Originality/value
This study depicts an empirically grounded, theory-based account of a post-acquisition supply network integration process, showing how an M&A can drastically impact customer and supplier network relationships. The main contribution of this paper lies in extending our understanding of how social capital cannot be simply transferred from one organisation to another during an M&A. Rather, this work illustrates how social capital in supply networks is transformed by considering the pre- and post-acquisition social capital dynamics of the merging networks.
Keywords
Acknowledgements
The authors would like to thank the four anonymous reviewers and the editor for their insightful comments in helping us develop the paper. The authors are particularly grateful to Lauren Pflueger for her support with the paper.
Citation
Chakkol, M., Finne, M., Raja, J.Z. and Johnson, M. (2018), "Social capital is not for sale: a supply network perspective on mergers and acquisitions", Supply Chain Management, Vol. 23 No. 5, pp. 377-395. https://doi.org/10.1108/SCM-02-2017-0052
Publisher
:Emerald Publishing Limited
Copyright © 2018, Emerald Publishing Limited