Synergy Sources, Target Autonomy, and Integration in Acquisitions

Akbar Zaheer, Xavier Castañer, David Souder

Research output: Contribution to journalArticle

  • 41 Citations

Abstract

Determining the appropriate level of integration is crucial to realizing value from acquisitions. Most prior research assumes that higher integration implies the removal of autonomy from target managers, which in turn undermines the functioning of the target firm if it entails unfamiliar elements for the acquirer. Using a survey of 86 acquisitions to obtain the richness of detail necessary to distinguish integration from autonomy, the authors argue and find that integration and autonomy are not the opposite ends of a single continuum. Certain conditions (e.g., when complementarity rather than similarity is the primary source of synergy) lead to high levels of both integration and autonomy. In addition, similarity negatively moderates the relationship between complementarity and autonomy when the target offers both synergy sources. In contrast, similarity does not moderate the link between complementarity and integration. The authors' findings advance scholarly understanding about the drivers of implementation strategy and in particular the different implementation strategies acquiring managers deploy when they attempt to leverage complementarities, similarities, or both.

Original languageEnglish (US)
Pages (from-to)604-632
Number of pages29
JournalJournal of Management
Volume39
Issue number3
DOIs
StatePublished - Mar 2013

Fingerprint

Complementarity
Synergy
Managers

Keywords

  • autonomy
  • complementarity
  • integration
  • mergers and acquisitions (M&As)
  • similarity

ASJC Scopus subject areas

  • Strategy and Management
  • Finance

Cite this

Synergy Sources, Target Autonomy, and Integration in Acquisitions. / Zaheer, Akbar; Castañer, Xavier; Souder, David.

In: Journal of Management, Vol. 39, No. 3, 03.2013, p. 604-632.

Research output: Contribution to journalArticle

Zaheer, Akbar; Castañer, Xavier; Souder, David / Synergy Sources, Target Autonomy, and Integration in Acquisitions.

In: Journal of Management, Vol. 39, No. 3, 03.2013, p. 604-632.

Research output: Contribution to journalArticle

@article{d6d564147ad54f0693c6089830fc8846,
title = "Synergy Sources, Target Autonomy, and Integration in Acquisitions",
abstract = "Determining the appropriate level of integration is crucial to realizing value from acquisitions. Most prior research assumes that higher integration implies the removal of autonomy from target managers, which in turn undermines the functioning of the target firm if it entails unfamiliar elements for the acquirer. Using a survey of 86 acquisitions to obtain the richness of detail necessary to distinguish integration from autonomy, the authors argue and find that integration and autonomy are not the opposite ends of a single continuum. Certain conditions (e.g., when complementarity rather than similarity is the primary source of synergy) lead to high levels of both integration and autonomy. In addition, similarity negatively moderates the relationship between complementarity and autonomy when the target offers both synergy sources. In contrast, similarity does not moderate the link between complementarity and integration. The authors' findings advance scholarly understanding about the drivers of implementation strategy and in particular the different implementation strategies acquiring managers deploy when they attempt to leverage complementarities, similarities, or both.",
keywords = "autonomy, complementarity, integration, mergers and acquisitions (M&As), similarity",
author = "Akbar Zaheer and Xavier Castañer and David Souder",
year = "2013",
month = "3",
doi = "10.1177/0149206311403152",
volume = "39",
pages = "604--632",
journal = "Journal of Management",
issn = "0149-2063",
publisher = "SAGE Publications Inc.",
number = "3",

}

TY - JOUR

T1 - Synergy Sources, Target Autonomy, and Integration in Acquisitions

AU - Zaheer,Akbar

AU - Castañer,Xavier

AU - Souder,David

PY - 2013/3

Y1 - 2013/3

N2 - Determining the appropriate level of integration is crucial to realizing value from acquisitions. Most prior research assumes that higher integration implies the removal of autonomy from target managers, which in turn undermines the functioning of the target firm if it entails unfamiliar elements for the acquirer. Using a survey of 86 acquisitions to obtain the richness of detail necessary to distinguish integration from autonomy, the authors argue and find that integration and autonomy are not the opposite ends of a single continuum. Certain conditions (e.g., when complementarity rather than similarity is the primary source of synergy) lead to high levels of both integration and autonomy. In addition, similarity negatively moderates the relationship between complementarity and autonomy when the target offers both synergy sources. In contrast, similarity does not moderate the link between complementarity and integration. The authors' findings advance scholarly understanding about the drivers of implementation strategy and in particular the different implementation strategies acquiring managers deploy when they attempt to leverage complementarities, similarities, or both.

AB - Determining the appropriate level of integration is crucial to realizing value from acquisitions. Most prior research assumes that higher integration implies the removal of autonomy from target managers, which in turn undermines the functioning of the target firm if it entails unfamiliar elements for the acquirer. Using a survey of 86 acquisitions to obtain the richness of detail necessary to distinguish integration from autonomy, the authors argue and find that integration and autonomy are not the opposite ends of a single continuum. Certain conditions (e.g., when complementarity rather than similarity is the primary source of synergy) lead to high levels of both integration and autonomy. In addition, similarity negatively moderates the relationship between complementarity and autonomy when the target offers both synergy sources. In contrast, similarity does not moderate the link between complementarity and integration. The authors' findings advance scholarly understanding about the drivers of implementation strategy and in particular the different implementation strategies acquiring managers deploy when they attempt to leverage complementarities, similarities, or both.

KW - autonomy

KW - complementarity

KW - integration

KW - mergers and acquisitions (M&As)

KW - similarity

UR - http://www.scopus.com/inward/record.url?scp=84874489646&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84874489646&partnerID=8YFLogxK

U2 - 10.1177/0149206311403152

DO - 10.1177/0149206311403152

M3 - Article

VL - 39

SP - 604

EP - 632

JO - Journal of Management

T2 - Journal of Management

JF - Journal of Management

SN - 0149-2063

IS - 3

ER -