Organizational Identity and Value Creation in Post-Acquisition Integration: The Spiralling Interaction of the Target's Contributive and the Acquirer's Absorptive Capacities
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Through a longitudinal case study of five acquisitions made by the same acquirer, I explore the relationship between organizational identity, post-acquisition integration and acquisition outcomes. The concept of organizational identity has received a substantial amount of attention over the last decades. Even so, knowledge of the consequences of organizational identity in organizations, and the mechanisms through which identity dynamics generate organizational outcomes is lacking. This thesis aims to contribute to our knowledge of the implications of organizational identity in post-acquisition integration processes, and through this, how value is created in acquisitions. Prior literature on acquisition integration has to a great extent focused on the actions of managers from the acquiring firm, and not attended to the target as an active party. This study argues that to understand the complex processes involved in acquisition integration, the managerial perspective traditionally taken by strategy researchers needs to be complemented with a perspective that takes into account the interaction of target and acquiring firms’ capabilities, competencies and organizational identities. My data shows that characteristics of both the target and the acquiring firm interact in the integration process to create expected and serendipitous value. The concept of contributive capacity is introduced, referring to the target firm’s active role in the creation of value in post-acquisition integration. Contributive capacity is theorized from the target performing mitigating and mobilizing actions, the development of cross-organizational roles and perceptions of individual decision power. Furthermore, my data shows that these actions are triggered by perceived threat to the target’s organizational identity.
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