Abstract
This article discusses post-merger integration (PMI) and the trade-off between the economic benefits and costs that arise when organizations merge under a new organizational structure and reconfigure their businesses and resources. To reconfiguration scholars, PMI is a crucial tool for firms to reconfigure resources, product lines, and business units to adjust to internal and external environment needs. Other scholars focus on organization design, shedding light on structural integration following an acquisition and exploring key trade-offs of this process. We integrate reconfiguration and organization design aspects on choices of what and how to integrate after mergers and acquisitions, questions that have often been treated separately. We then outline how to design and conduct empirical research on PMI. We conclude by offering ideas for future research.
Highlights
This article discusses post-merger integration (PMI) and the trade-off between the economic benefits and costs that arise when organizations merge under a new organizational structure and reconfigure their businesses and resources
Bodner and Capron Journal of Organization Design (2018) 7:3. Both academics and practitioners stress the crucial role played by PMI in the success of mergers and acquisitions (M&A) (Zollo and Meier 2008)
Research questions As mentioned previously, the existing literature on PMI generally seeks to answer one of the following questions: Which resources or units do merging firms reconfigure post-acquisition? What level of structural integration do merging firms pursue postacquisition? And what is the outcome of the PMI activities? Interesting new research questions could stem from integrating the fragmented fields of research on PMI
Summary
This article discusses post-merger integration (PMI) and the trade-off between the economic benefits and costs that arise when organizations merge under a new organizational structure and reconfigure their businesses and resources. M&As provide a strong basis for a firm’s growth and survival They enable merging firms to reconfigure their businesses, by which we mean adding, redeploying, recombining, or divesting assets and resources with the goal of strengthening the resource base (Karim and Capron 2016). Acquisitions are a crude means of obtaining specific resources in pursuit of growth They often come with unneeded resources that the acquiring firm is obliged to restructure and divest during the post-merger integration (PMI) phase. We define post-merger integration as the process that unfolds in the aftermath of the deal closure to reconfigure merging firms by redeploying, adding, or divesting resources, lines of products or entire businesses, in order to achieve the expected combination benefits
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