Sustaining competitive advantages in mergers and acquisitions

Abstract

With company mergers and acquisitions from the 1980s, an emerging issue was to sustain competitive advantage through the use of IT. However, research in individual organisations has shown that sophisticated IT alone is not enough to sustain competitive advantage. Intangible resources such as organisational leadership, culture and business processes are also needed [(J.C. Henderson and N. Venkatraman, 1989), (S. Chatterjee, et al., 1992), (T.C. Powell and A. Dent-Micallef, 1997). This research investigates sustainable competitive advantage (SCA) in two case studies. The first case study focuses on Mobil Oil Australia (MOA) following the acquisition of Esso Australia Limited's marketing and refining assets. Results after the acquisition were poor and MOA reviewed its processes with financial, behavioural and cultural objectives. The second case study concerns a small logistics company that acquired the business next door, which led to senior management changes, development of new customer focused IT systems, further business acquisitions and geographic expansion into new markets. Our study of these two cases identified and confirmed the intangible SCA factors. However further research of both cases is needed to confirm the long term benefits of these SCA factors. A critical success framework for mergers/acquisitions can also be developed through research into more case studies.