The Evolving Role of Mergers and Acquisitions in Competitive Strategy Research

Arturo Capasso
University of Sannio – Department of Economic and Social Systems Analysis; European Corporate Governance Institute (ECGI)

Olimpia Meglio
University of Sannio

September 20, 2007

Abstract:

This chapter intends to investigate the role of strategic mergers and acquisitions (hereinafter M&As), traditionally viewed as a corporate strategy option, in sustaining competitive strategy, offering a description of the whole acquisition process and discussing the main and conflicting results produced by the abundant empirical research on this topic.

The established business literature considers M&As as a corporate strategy tool by which sustain and implement growth. Following Haspeslagh and Jemison (1991) we contend, however, that acquisitions can bring into a company capabilities it finds hard to develop internally and provide the opportunity to leverage the existing ones; under this regard, they contribute to gain or renew sustainable competitive advantages. Despite the huge number of empirical researches carried out so far, the evaluation of M&As performance for the acquiring firm is still an open issue. We adopt a process approach to M&A and suggest that acquisition performance is the outcomes of all sub-processes in which can ideally be split the whole acquisition process, each of which is alone necessary, although not sufficient, to grant overall acquisition success. Integration features are discussed in details, with a particular emphasis on acquisition performance metrics.

The Evolving Role of Mergers and Acquisitions in Competitive Strategy Research

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