Bridging Practice and Process Research to Study Transient Manifestations of Strategy

webfull — Mon, 23 Oct 2017 16:25:44 +0000

Authors: Laurent Mirabeau, Steve Maguire and Cynthia Hardy

Publication: Strategic Management Journal, Vol. 39, No. 3 (SI), March 2018

Abstract:

At the intersection of Strategy Process (SP) and Strategy-as-Practice (SAP) research lies the focal phenomenon they share – strategy, which manifests itself in a variety of ways: intended, realized, deliberate, emergent, unrealized, and ephemeral strategy.

We present a methodology comprised of three stages that, when integrated in the manner we suggest, permit a rich operationalization and tracking of strategy content for all manifestations. We illustrate the utility of our methodology for bridging SP and SAP research by theorizing practices that are more likely to give rise to unrealized and ephemeral strategy, identifying their likely consequences, and presenting a research agenda for studying these transient manifestations.

Published: 23 October 2017

Acquisition Motives and the Distribution of Acquisition Performance

webfull — Thu, 28 Sep 2017 14:26:03 +0000

Author: MaryJane Rabier

Publication: Strategic Management Journal, Vol. 38, No. 13, 2017

Abstract:

Research summary:

I examine how acquisition motives relate to the distribution of post-acquisition performance. I argue that acquisitions motivated by operating synergies have the potential to experience greater gains than acquisitions driven by financial synergies but are harder to value and implement, making them more uncertain. Using SEC filings, conference calls and press releases to capture acquisition motives, I find that acquirers pursuing operating synergies are more likely to experience highly positive and highly negative long-term returns than acquirers pursuing financial synergies.

I also find that acquisition experience and geographic proximity to targets soften acquirers' extreme downside outcomes in operating synergy acquisitions. My theory and results suggest that approaches that emphasize average outcomes for acquirers and use industry classifications to capture acquisition motives may be incomplete.

Managerial summary:

Managers engage in acquisitions for various reasons. In this study, I find that reasons related to operating synergies (e.g., revenue growth through new product offerings or cost savings through economies of scale) are more likely to result in extreme high and low performance outcomes for the acquiring firm compared to reasons related to financial synergies (e.g., diversification of cash flow streams).

In addition, I find that the acquirer's prior acquisition experience and the geographic proximity between the target and acquirer help soften the extreme low performance outcomes related to operating synergies.

Read full article: Strategic Management Journal

Published: 28 September 2017

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Bridging Practice and Process Research to Study Transient Manifestations of Strategy

Acquisition Motives and the Distribution of Acquisition Performance