Stakeholder orientation and acquisition performance

Emanuele Luca Maria Bettinazzi and Maurizio Zollo
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Emanuele Luca Maria Bettinazzi: EM - EMLyon Business School
Maurizio Zollo: Università Bocconi

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Abstract: Research summary: In this paper, we study how a firm's stakeholder orientation affects the performance of its corporate acquisitions. We depart from prior literature and suggest that orientations towards employees, customers, suppliers and local communities will affect long-term acquisition performance both directly and through its interactions with process characteristics, such as pre- acquisition relatedness and post-acquisition integration. Analyses of data on a sample of 1,884 acquisitions show overall a positive association between acquirers' stakeholder orientation and acquisition performance. In addition, we find support for a positive moderation of business relatedness on the performance impacts of stakeholder orientation. Structural integration has a similarly positive moderation effect only for some of the stakeholder categories. Managerial summary: Does collaboration with stakeholders during an acquisition pay off in terms of performance? The results of this research show that it is worth engaging stakeholders during the M&A process, but that the efficacy of involvement practices may depend on the type of stakeholders and the characteristics of the acquisition. While acquiring firms that take account of suppliers and local communities consistently over-perform in their acquisitions, the inclusion of employees might be not beneficial (and even harmful) when the target firm operates in a dissimilar business or when managers do not plan to maintain it as a separate entity.

Keywords: Stakeholder Orientation; M&A Process; Acquisition Performance; Stakeholder Relations; Relational capital (search for similar items in EconPapers)
Date: 2017-12-01
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Citations: View citations in EconPapers (30)

Published in Strategic Management Journal, 2017, 38 (12), 2465-2485 p. ⟨10.1002/smj.2672⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02312007

DOI: 10.1002/smj.2672

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