HiQ International Company: A Case Study of Operational Effectiveness post Merger and Acquisition

Abstract

Mergers and acquisitions occur in a dynamic process in which resource allocation and organization structures are restructured in response to new challenges. Analyzing mergers and acquisitions in the technology sector using the empirical case of HiQ International Ab shows that management efficiency post merger and acquisition requires the reallocation of resources where traditions and culture are broken resulting in numerous side effects of change. In addition, the management morale in the business world may significant differ from what was assumed in the traditional literature on this subject matter. As a matter of fact, if profit maximization is one of the key motives of the acquirer firm, this is often driven by differing incentives that, nevertheless, govern the dynamic process of M&A. Consequently, the benefits of M&A may be greatly reduced due to the management conflicts between the acquiring and the target firm. In this study, we analyze successful acquisitions based on little asset divestiture even in the case of high strategic similarity. We propose an alternative business framework to view M&A given the nature of consulting-based software companies. Consequently, the difference of product-based software companies, as opposed to consulting-based software companies, may employ contrary attitude towards the integration of the target firm. Our study also opens future research opportunities for mergers and acquisitions of international companies in the technology sector.