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Towards unlocking the full potential of acquisitions, the role of organizational restructuring

Barkema, Harry G. and Schijven, Mario (2008) Towards unlocking the full potential of acquisitions, the role of organizational restructuring. Academy of Management Journal, 51 (4). pp. 697-722. ISSN 0001-4273

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Abstract

Building on behavioral theory, we study when and how firms unlock synergy from acquisitions over extended periods of time. We argue that initial integration is inevitably suboptimal and that, as a result, acquisitive growth decreases an acquirer's performance, eventually forcing it to engage in organizational restructuring to more fully unlock the synergistic potential. Hence, we conceptualize organizational restructuring as a second stage in the integration process. Moreover, we theorize about how acquisition-restructuring cycles evolve as firms gain acquisition and restructuring experience. We tested our theory using panel data on firms undertaking almost 1,600 acquisitions over four decades.

Item Type: Article
Official URL: http://journals.aomonline.org/amj/
Additional Information: © 2011 AOM
Library of Congress subject classification: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HF Commerce
Journal of Economic Literature Classification System: G - Financial Economics > G3 - Corporate Finance and Governance > G34 - Mergers; Acquisitions; Restructuring; Corporate Governance
L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L23 - Organization of Production
Sets: Departments > Management
Collections > Economists Online
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 29 Jun 2011 11:37
URL: http://eprints.lse.ac.uk/37028/

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