Hostname: page-component-cd9895bd7-hc48f Total loading time: 0 Render date: 2024-12-22T18:04:57.143Z Has data issue: false hasContentIssue false
  • English
  • Français

Human resources retention and knowledge transfer in mergers and acquisitions

Published online by Cambridge University Press:  28 November 2013

Carmen Castro-Casal ,
Edelmira Neira-Fontela  and
M. Dolores Álvarez-Pérez
Carmen Castro-Casal*
Affiliation:
Department of Business Administration, University of Santiago de Compostela, Santiago de Compostela, Spain
Edelmira Neira-Fontela
Affiliation:
Department of Business Administration, University of Santiago de Compostela, Santiago de Compostela, Spain
M. Dolores Álvarez-Pérez
Affiliation:
Department of Business Administration, University of Santiago de Compostela, Santiago de Compostela, Spain
*
Corresponding author: [email protected]
Get access Rights & Permissions [Opens in a new window]

Abstract

Mergers and acquisitions can be a mechanism used by firms to access innovative knowledge, including intellectual property, and to strengthen and expand their core capabilities. In the mergers and acquisition context, the creation of value depends on the transfer of capabilities and knowledge being carried out successfully during the post-acquisition integration process. The paper adopts this view. It examines the role of the top management and personnel who hold knowledge and skills linked to the capability of the acquired firm considered most valuable by the acquiring firm in the transfer of knowledge from the acquired firm to the acquiring firm. The paper also examines whether the impact of the retention of the acquired firm's high-value human resources (HVHR) on knowledge transfer is moderated by the degree of embeddedness of the knowledge to be transferred. Furthermore, the study identifies the factors that influence the retention of the acquired firm's HVHR. We tested the model using data from a sample of 57 domestic, related, friendly Spanish mergers and acquisitions belonging to a wide variety of industries. The results support the notion that the more embedded the knowledge, the greater the impact of the acquired firm's HVHR retention on the knowledge transfer. They also show that the autonomy granted to the acquired firm, the frequency of use of rich media among the personnel of both firms, and the acquired firm's pre-acquisition profitability are factors encouraging the acquired firm's HVHR to remain. The study contributes to the literature on knowledge transfer in mergers and acquisitions by highlighting the relevance of retention of the acquired firm's HVHR for knowledge transfer, as well as demonstrating the importance of taking into consideration the nature of the knowledge to be transferred. It also contributes to the literature on the implementation process in mergers and acquisitions by identifying factors available to managers to favor HVHR continuity in the acquiring firm or the one resulting from the merger.

Keywords

Mergers and acquisitionsKnowledge transferHuman resourcesRetentionPost-acquisition implementation
Type
Research Article
Information
Journal of Management & Organization , Volume 19 , Issue 2 , March 2013 , pp. 188 - 209
Copyright
Copyright © Cambridge University Press and Australian and New Zealand Academy of Management 2013 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Aguinis, H., Gottfredson, R. K. (2010). Best-practice recommendations for estimating interaction effects using moderated multiple regression. Journal of Organizational Behavior, 31(6), 776–786.CrossRefGoogle Scholar
Ahammad, M. F., Glaister, K. W. (2011). Postacquisition management and performance of cross-border acquisitions. International Studies of Management and Organization, 41(3), 59–75.CrossRefGoogle Scholar
Aiken, L. S., West, S. G. (1991). Multiple regression: Testing and interpreting interactions. Newbury Park, CA: Sage Publication.Google Scholar
Al-Laham, A., Schweiger, L., Amburguey, T. L. (2010). Dating before marriage? Analyzing the influence of pre-acquisition experience and target familiarity on acquisition success in the ‘M&A as R&D’ type of acquisition. Scandinavian Journal of Management, 26, 25–37.Google Scholar
Appelbaum, S. H., Lefrancois, F., Tonna, R., Shapir, B. T. (2007). Mergers 101 (part two): Training managers for culture, stress, and change challenges. Industrial and Commercial Training, 39(4), 191–200.Google Scholar
Argote, L. (1999). Organizational learning: Creating, retaining, and transferring knowledge. Norwell, MA: Kluwer Academic.Google Scholar
Badaracco, J. L. (1991). The knowledge link: How firms compete through strategic alliances. Boston, MA: Harvard Business Press.Google Scholar
Barkema, H. G., Schijven, M. (2008). Toward unlocking the full potential of acquisitions: The role of organizational restructuring. Academy of Management Journal, 51(4), 696–722.Google Scholar
Barney, J. (1991). Firm resources and sustained competitive advantage. Journal of Management, 17(1), 99–120.Google Scholar
Bergh, D. (2001). Executive retention and acquisition outcomes: A test of opposing views on the influence of organizational tenure. Journal of Management, 27(5), 603–622.Google Scholar
Berman, S. L., Down, J., Hill, C. W. L. (2002). Tacit knowledge as a source of competitive advantage in the National Basketball Association. Academy of Management Journal, 45(1), 13–31.Google Scholar
Björkman, I., Stahl, G. K., Vaara, E. (2007). Cultural differences and capability transfer in cross-border acquisitions: The mediating roles of capability complementarity, absorptive capacity, and social integration. Journal of International Business Studies, 38(4), 658–672.Google Scholar
Bresman, H., Birkinshaw, J., Nobel, R. (1999). Knowledge transfer in international acquisitions. Journal of International Business Studies, 30(3), 439–462.Google Scholar
Brown, J., Duguid, P. (1991). Organizational learning and communities of practice: Toward a unified view of working, learning and innovation. Organization Science, 2(1), 40–57.Google Scholar
Buono, A. F., Bowditch, J. L. (1989). The human side of mergers and acquisitions: Managing collisions between people, cultures and organizations. San Francisco, CA: Jossey-Bass.Google Scholar
Butler, F. C., Perryman, A. A., Ranft, A. L. (2012). Examining the effects of acquired top management team turnover on firm performance post-acquisition: A meta-analysis. Journal of Managerial Issues, XXIV(1), 47–60.Google Scholar
Cannella, A. A., Hambrick, D. C. (1993). Effects of executive departures on the performance of acquired firms. Strategic Management Journal, 14(4), 137–152.Google Scholar
Capron, L. (1999). The long-term performance of horizontal acquisitions. Strategic Management Journal, 20, 987–1018.Google Scholar
Capron, L., Pistre, N. (2002). When do acquirers earn abnormal returns? Strategic Management Journal, 23, 781–794.Google Scholar
Castro, C., Neira, E. (2005). Knowledge transfer. Analysis of three internet acquisitions. The International Journal of Human Resource Management, 16(1), 120–135.Google Scholar
Chaudhuri, S. (2005). Managing human resources to capture capabilities: Case studies in high-technology acquisitions. In G. K. Stahl & M. Mendenhall (Eds.), Mergers and acquisitions: Managing culture and human resources (pp. 277–301). Stanford, CA: Stanford Business Press.CrossRefGoogle Scholar
Coff, R. (2002). Acquisitions human capital, shared expertise, and the likelihood of impasse in corporate. Journal of Management, 28(1), 107–128.Google Scholar
Coff, R., Kryscynski, D. (2011). Invited editorial: Drilling for micro-foundations of human capital-based competitive advantages. Journal of Management, 37(5), 1429–1443.Google Scholar
Colombo, G., Conca, V., Buongiorno, M., Gnan, L. (2007). Integrating cross-border acquisitions. A process-oriented approach. Long Range Planning, 40, 202–222.Google Scholar
Cording, M., Christmann, P., King, D. R. (2008). Reducing causal ambiguity in acquisition integration. Intermediate goals as mediators of integration decisions and acquisition performance. Academy of Management Journal, 51(4), 744–767.Google Scholar
Daft, R. L., Lengel, R. H. (1986). Organizational information requirements. Media richness and structural design. Management Science, 32(5), 554–571.Google Scholar
Daft, R. L., Lengel, R. H.Trevino, L. K. (1987). Message equivocality, media selection, and manager performance: Implications for information systems. MIS Quarterly, 11(3), 335–366.Google Scholar
Datta, D. K., Grant, J. H. (1990). Relationships between type of acquisition, the autonomy given to the acquired firm, and acquisition success: An empirical analysis. Journal of Management, 16, 29–44.Google Scholar
Dewhurst, M., Guthridge, M., Mohr, E. (2010). Motivating people: Getting beyond money. McKinsey Quarterly, 1, 12–15.Google Scholar
Ellis, K. M., Reus, T. H., Lamont, B. T. (2009). The effects of procedural and informational justice in the integration of related acquisitions. Strategic Management Journal, 30, 137–161.Google Scholar
Ernst, H., Vitt, J. (2000). The influence of corporate acquisitions on the behavior of key inventors. R&D Management, 30(2), 105–119.Google Scholar
Geletkanycz, M. (1997). The salience of ‘culture's consequences’: The effects of cultural values on top executive commitment to the status quo. Strategic Management Journal, 18(8), 615–634.3.0.CO;2-I>CrossRefGoogle Scholar
Graebner, M. E. (2004). Momentum and serendipity in acquisition implementation. Strategic Management Journal, 25(8/9), 751–777.Google Scholar
Grunig, L., Grunig, J., Dozier, D. (2002). Excellent public relations and effective organizations: A study of communication management in three countries. Hillsdale, NJ: Lawrence Erlbaum.Google Scholar
Haleblian, J., Devers, C. E., McNamara, G., Carpenter, M. A., Davison, R. B. (2009). Taking stock of what we know about mergers and acquisitions: A review and research agenda. Journal of Management, 35(3), 469–502.Google Scholar
Haleblian, J., Finkelstein, S. (1999). The influence of organizational acquisition experience on acquisition performance: A behavioural learning perspective. Administrative Science Quarterly, 44, 29–56.Google Scholar
Hall, R. (1992). The strategic analysis of intangible resources. Strategic Management Journal, 13(2), 135–144.Google Scholar
Hambrick, D. C., Cannella, A. A. (1993). Relative standing: A framework for understanding departures of acquired executives. Academy of Management Journal, 36(4), 733–762.Google Scholar
Haspeslagh, P. C., Jemison, D. B. (1991). Managing acquisitions: Creating value through corporate renewal. New York, NY: Free Press.Google Scholar
Hofstede, G. (2001). Culture's consequences: Comparing values, behaviors, institutions and organizations across nations (2nd ed). Thousand Oaks, CA: Sage Publications.Google Scholar
Homburg, C., Bucerius, M. (2005). A marketing perspective on mergers and acquisitions: How marketing integration affects postmerger performance. Journal of Marketing, 69, 95–113.Google Scholar
Husted, K., Michailova, S. (2002). Diagnosing and fighting knowledge-sharing hostility. Organizational Dynamics, 31(1), 60–73.Google Scholar
Junni, P. (2011). Knowledge transfer in acquisitions: Fear of exploitation and contamination. Scandinavian Journal of Management, 27, 307–321.Google Scholar
Junni, P., Sarala, R. M. (2011). Causal ambiguity, cultural integration and partner attractiveness as determinants of knowledge transfer: Evidence of Finnish acquisitions. European Journal of International Management, 5(4), 346–372.Google Scholar
Kapoor, R., Lim, K. (2007). The impact of acquisitions on the productivity of inventors at semiconductor firms: A synthesis of knowledge-based and incentive-based perspectives. Academy of Management Journal, 50(5), 1133–1155.Google Scholar
Kiefer, T. (2005). Feeling bad: Antecedents and consequences of negative emotions in ongoing change. Journal of Organizational Behavior, 26, 875–897.Google Scholar
King, D. R., Dalton, D. R., Daily, C. M., Covin, J. G. (2004). Meta-analyses of post-acquisition performance: Indications of unidentified moderators. Strategic Management Journal, 25, 187–200.Google Scholar
King, D. R., Slotegraaf, R. J., Kesner, I. (2008). Performance implications of firm resource interactions in the acquisition of R&D-intensive firms. Organization Science, 19(2), 327–340.Google Scholar
Klendauer, R., Deller, J. (2009). Organizational justice and managerial commitment in corporate mergers. Journal of Managerial Psychology, 24(1), 29–45.Google Scholar
Krishnan, H. A., Miller, A., Judge, W. Q. (1997). Diversification and top management team complementarity: Is performance improved by merger similar or dissimilar teams? Strategic Management Journal, 18(5), 361–374.3.0.CO;2-L>CrossRefGoogle Scholar
Krug, J. A., Hegarty, W. H. (1997). Postacquisition turnover among U.S. top management teams: An analysis of the effects of foreign vs. domestic acquisitions of U.S. targets. Strategic Management Journal, 18(8), 667–675.Google Scholar
Kumer, C. (2008). Motivation and retention of key people in mergers and acquisitions. Strategic HR Review, 7(6), 5–10.Google Scholar
Kupritz, V. W., Cowell, E. (2011). Productive management communication. Journal of Business Communication, 48(1), 54–82.Google Scholar
Lubatkin, M., Schweiger, D., Weber, Y. (1999). Top management turnover in related M&A's: An additional test of the theory of relative standing. Journal of Management, 25(1), 55–73.Google Scholar
Mahoney, J. T., Pandian, J. R. (1992). The resource-based view within the conversation of strategic management. Strategic Management Journal, 13(5), 369–380.CrossRefGoogle Scholar
Marks, M. L. (2007). A framework for facilitating adaptation to organizational transition. Journal of Organizational Change Management, 20(5), 721–739.Google Scholar
Marks, M. L., Mirvis, P. H. (2001). Making mergers and acquisitions work: Strategic and psychological preparation. Academy of Management Executive, 15(2), 80–92.Google Scholar
Meyer, C. B. (2008). Value leakages in mergers and acquisitions. Long Range Planning, 41(2), 197–224.Google Scholar
Moeller, S. B., Schlingemann, F. P., Stulz, R. M. (2005). Wealth destruction on a massive scale: A study of acquiring firm returns in merger wave of the late 1990s. Journal of Finance, 60(2), 757–782.Google Scholar
Nelson, R. R., Winter, S. G. (1982). An evolutionary theory of economic change. Cambridge, MA: Harvard University Press.Google Scholar
Neter, J., Kutner, N., Nachtsheim, C., Wasserman, W. (1996). Applied linear statistical models (4th ed). Boston, MA: Irwin.Google Scholar
Ou, W. M., Wang, H. D. (2007). Controllability as a moderator of the effect of salaries on performance: An empirical study. International Journal of Management, 24(4), 657–666.Google Scholar
Paruchuri, S., Nerkar, A., Hambrick, D. (2006). Acquisition integration and productivity losses in the technical core: Disruption of inventors in acquired companies. Organization Science, 17(5), 545–562.Google Scholar
Podsakoff, P. M., MacKenzie, S. B., Lee, J. Y., Podsakoff, N. P. (2003). Common method biases in behavioral research: A critical review of the literature and recommended remedies. Journal of Applied Psychology, 88, 879–903.Google Scholar
Puranam, P., Singh, H., Zollo, M. (2006). Organizing for innovation: Managing the coordination-autonomy dilemma in technology acquisitions. Academy of Management Journal, 49(2), 263–280.CrossRefGoogle Scholar
Puranam, P., Srikanth, K. (2007). What they know vs. what they do: How acquirers leverage technology acquisitions. Strategic Management Journal, 28(8), 805–825.Google Scholar
Purdy, J. M., Nye, P. (2000). The impact of communication media on negotiation outcomes. The International Journal of Conflict Management, 11(2), 162–187.Google Scholar
Rafferty, A. E., Restubog, S. L. D. (2010). The impact of change process and context on change reactions and turnover during a merger. Journal of Management, 36(5), 1309–1338.Google Scholar
Ranft, A.L. 1997. Preserving and transferring knowledge-based resources during post-acquisitions implementation. PhD dissertation. UMI Dissertation Services, University of North Carolina, Chapel Hill, NC.Google Scholar
Ranft, A. L., Lord, M. D. (2000). Acquiring new knowledge: The role of retaining human capital in acquisitions of high-tech firms. Journal of High Technology Management Research, 11(2), 295–319.Google Scholar
Ranft, A. L., Lord, M. D. (2002). Acquiring new technologies and capabilities: A grounded model of acquisition implementation. Organization Science, 13(4), 420–441.Google Scholar
Reus, T. H., Lamont, B. T. (2009). The double-edge sword of cultural distance in international acquisitions. Journal of International Business Studies, 40, 1298–1316.Google Scholar
Rhodes-Kropf, M., Robinson, D. T. (2008). The market for mergers and the boundaries of the firm. Journal of Finance, 63(3), 1169–1211.Google Scholar
Rice, R. E. (1992). Task analyzability, use of new media, and effectiveness a multi-site exploration of media richness. Organization Science, 3(4), 475–500.Google Scholar
Roberts, E. B., Mizouchi, R. (1989). Inter-firm technological collaboration: The case of Japanese biotechnology. International Journal of Technology Management, 4(1), 43–61.Google Scholar
Sarala, R. M. (2010). The impact of cultural differences and acculturation factors on post-acquisition conflict. Scandinavian Journal of Management, 26(1), 38–56.CrossRefGoogle Scholar
Sarala, R. M., Vaara, E. (2010). Cultural differences, convergence, and crossvergence as explanations of knowledge transfer in international acquisitions. Journal of International Business Studies, 41(8), 1365–1390.Google Scholar
Saxton, T., Dollinger, M. (2004). Target reputation and appropriability: Picking and deploying resources in acquisitions. Journal of Management, 30(1), 123–147.Google Scholar
Schoenberg, R. (2006). Measuring the performance of corporate acquisitions: An empirical comparison of alternative metrics. British Journal of Management, 17(4), 361–370.Google Scholar
Schwab, D. P. (1999). Research methods for organizational studies. Mahwah, NJ: Lawrence Erlbaum.Google Scholar
Seth, A. (1990). Sources of value creation in acquisitions: An empirical investigation. Strategic Management Journal, 11, 431–446.Google Scholar
Shaw, J., Duffy, M. K., Johnson, J. L., Lockhart, D. E. (2005). Turnover, social capital losses, and performance. Academy of Management Journal, 48, 594–596.Google Scholar
Spender, J. C. (1996). Making knowledge the basis of a dynamic theory of the firm. Strategic Management Journal, 17, 45–62.Google Scholar
Stahl, G. K., Voigt, A. (2008). Do cultural differences matter in mergers and acquisitions? A tentative model and examination. Organization Science, 19(1), 160–176.Google Scholar
Stahl, G. K., Larsson, R., Kremershof, I., Sitkin, S. B. (2011). Trust dynamics in acquisitions: A case survey. Human Resource Management, 50(5), 575–603.Google Scholar
Teerikangas, S., Very, P. (2006). The culture–performance relationship in M&A: From yes/no to how. British Journal of Management, 17, S31–S48.Google Scholar
Trautwein, F. (1990). Mergers motives and mergers prescriptions. Strategic Management Journal, 11, 283–295.Google Scholar
Uhlenbruck, K., Hitt, M., Semadeni, M. (2006). Market value effects of acquisitions involving internet firms: A resource-based analysis. Strategic Management Journal, 27, 899–913.Google Scholar
Walsh, J. P., Ellwood, J. W. (1991). Mergers, acquisitions and the pruning of managerial deadwood. Strategic Management Journal, 12, 201–217.Google Scholar
Walter, G. A., Barney, J. B. (1990). Management objectives in mergers and acquisitions. Strategic Management Journal, 11, 79–86.Google Scholar
Werner, S. G., Ward, S. (2004). Recent compensation research: An eclectic review. Human Resource Management Review, 14(2), 201–228.Google Scholar
Wickramasinghe, V., Karunaratne, C. (2009). People management in mergers and acquisitions in Sri Lanka: Employee perceptions. The International Journal of Human Resource Management, 20(3), 694–715.Google Scholar
Zaheer, A., Castañer, X., Souder, D. (2013). Synergy sources, target autonomy and integration in acquisitions, Journal of Management, 39(3), 604–632.Google Scholar
Zander, U., Zander, L. (2010). Opening the grey box: Social communities knowledge and culture in acquisitions. Journal of International Business Studies, 41, 27–37.Google Scholar
Zhao, X. (2009). Technological innovation and acquisitions. Management Science, 55(7), 1170–1183.Google Scholar
Zollo, M., Singh, H. (2004). Deliberate learning in corporate acquisitions: Post-acquisition strategies and integration capability in U.S. bank mergers. Strategic Management Journal, 25(13), 1233–1256.Google Scholar