The Role of Human Resource Management in Cross-Border Technological Acquisitions

Abstract

To analyze the effectiveness of HRM strategies as a mechanism for achieving synergies, we incorporate the post-acquisition resource flows and the need for structural integration into Aguilera and Dencker’s (2004) framework that considers both national institutional environments and the strategic fit between the acquisition rationale and the human resource management (HRM) strategy. By taking into account the post-acquisition resource flows, we can identify which acquisitions will require greater levels of interdependence between the resources of the acquirer and the target. We also discuss whether and to what degree the acquisition should entail integration since acquirers should implement different HRM strategies contingent on whether structural integration occurs. While Aguilera and Dencker (2004) address acquisitions in a broader sense, here we focus exclusively on technological acquisitions for three primary reasons: 1) unique to technological acquisitions, their success depends on the retention of the target firm’s employees and the acquirer’s ability to not disrupt the routines of the target during integration, 2) HRM strategies play a significant role in the acquirer, both retaining target employees and successfully integrating the target, and 3) technological acquisitions are a newer phenomenon for which there has been little analysis involving HRM strategies.

Keywords: mergers, acquisitions, HRM, institutions, HRM