Context Sensitivity of Post-Acquisition Restructuring: An Evolutionary Perspective

CEES Working Paper No. 36

34 Pages Posted: 11 Oct 2000

See all articles by Klaus E. Meyer

Klaus E. Meyer

China Europe International Business School (CEIBS); Copenhagen Business School - Center for East European Studies (CEES)

Enese E. Lieb-Doczy

N.E.R.A.

Date Written: June 2000

Abstract

The transformation and integration of acquired businesses is subject to tensions between radical change to match the strategy and corporate culture of the acquirer, and promoting what is valuable in resources and cultural attributes in the acquired organization. Analysts' disagreement, even within the tradition of the resource-based view of the firm, arises from different conceptualizations of the nature of resources. We present an evolutionary perspective that shows not only the merits of competitive selection, but of retaining and developing context sensitivity and diversity.

Our case evidence shows that a defensive focus on short-term efficiency, i.e. downsizing, may destroy valuable human capital and employee motivation, and thus fail to realize the long-term potential of the organization. Investor determined strategies increased allocative efficiency in terms of productivity and profitability more rapidly. However, even in this case, acquirers providing more autonomy to local decision-makers and research units have been able to realize more of the potential contributions of the acquired assets, thus increasing dynamic efficiency.

Our empirical analysis of the tension between change and continuity is based on 20 original case studies in Hungary and East Germany. Foreign investors acquired these firms in the privatization wave of the early 1990's.

JEL Classification: G34, L33

Suggested Citation

Meyer, Klaus E. and Lieb-Doczy, Enese E., Context Sensitivity of Post-Acquisition Restructuring: An Evolutionary Perspective (June 2000). CEES Working Paper No. 36. Available at SSRN: https://ssrn.com/abstract=237157 or http://dx.doi.org/10.2139/ssrn.237157

Klaus E. Meyer (Contact Author)

China Europe International Business School (CEIBS) ( email )

Shanghai-Hongfeng Road
Shanghai 201206
Shanghai 201206
China

HOME PAGE: http://www.ceibs.edu/faculty/facultylist/09/100132.shtml

Copenhagen Business School - Center for East European Studies (CEES) ( email )

Porcelanshaven 24
2000 Frederiksberg
Denmark

HOME PAGE: http://www.klausmeyer.co.uk

Enese E. Lieb-Doczy

N.E.R.A.

15 Stratford Place
London, W1N9AF
United Kingdom

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