TY - JOUR
T1 - Learning ‘from’ vs. learning ‘about’ partners in pre-acquisition strategic alliances
T2 - The role of familiarity
AU - Zhou, Yueling
AU - Gomes, Emanuel
AU - Vendrell-Herrero, Ferran
N1 - Funding Information:
The authors are grateful to Duncan Angwin and the anonymous reviewers for their insightful comments and suggestions during the review process. We would also like to thank Hemant Merchant, Sumit Kundu, Anupama Phene, Youtha Cuypers, Ilya Okhmatovskiy, Roberto Ragozzino, as well as participants at the 2021 AIB annual meeting and the European M&A Institute 2022 conference for their valuable and insightful comments on previous versions of this manuscript. This work was funded by Fundação para a Ciência e a Tecnologia ( UIDB/00124/2020 , UIDP/00124/2020 and Social Sciences DataLab - PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016).
Funding Information:
The relationship between pre-acquisition alliances and post-acquisition performance has been widely recognized, but there are differing explanations from existing theoretical perspectives. On the one hand, organizational learning emphasizes that prior strategic alliances allow the acquiring firm to learn from the target company, gaining new technological knowledge and skills. On the other hand, relational learning focuses on the acquiring firm's understanding of the target firm's working methods, culture, leadership styles, and overall organizational dynamics, i.e., learning about the target, facilitating the formation of psychological contracts and mutual understanding. To reconcile these perspectives, we explore the moderating role of familiarity. While recognizing the importance of acquiring new knowledge and skills in all alliances, we argue that building trust and understanding with the target firm is especially important in pre-acquisition alliances. As a result, post-acquisition performance will be largely influenced by the acquiring firm's familiarity with the partner's context, thereby enhancing the conditions for learning about the partner. We hypothesize that cultural and market familiarity positively moderate the relationship from pre-acquisition alliances and post-acquisition performance. Using data from SDC Platinum, EIKON, and ORBIS, covering 712 majority or full acquisitions, we find strong support for our hypotheses. Specifically, pre-acquisition alliances are most effective in domestic and industrially related acquisitions. Additionally, the benefit of previous strategic alliances diminishes as cultural distance increases. These findings hold up under various matching techniques and have substantial implications for both scholars and practitioners.The authors are grateful to Duncan Angwin and the anonymous reviewers for their insightful comments and suggestions during the review process. We would also like to thank Hemant Merchant, Sumit Kundu, Anupama Phene, Youtha Cuypers, Ilya Okhmatovskiy, Roberto Ragozzino, as well as participants at the 2021 AIB annual meeting and the European M&A Institute 2022 conference for their valuable and insightful comments on previous versions of this manuscript. This work was funded by Fundação para a Ciência e a Tecnologia (UIDB/00124/2020, UIDP/00124/2020 and Social Sciences DataLab - PINFRA/22209/2016), POR Lisboa and POR Norte (Social Sciences DataLab, PINFRA/22209/2016).
Publisher Copyright:
© 2023
PY - 2023/9/13
Y1 - 2023/9/13
N2 - The relationship between pre-acquisition alliances and post-acquisition performance has been widely recognized, but there are differing explanations from existing theoretical perspectives. On the one hand, organizational learning emphasizes that prior strategic alliances allow the acquiring firm to learn from the target company, gaining new technological knowledge and skills. On the other hand, relational learning focuses on the acquiring firm’s understanding of the target firm’s working methods, culture, leadership styles, and overall organizational dynamics, i.e., learning about the target,facilitating the formation of psychological contracts and mutual understanding. To reconcile these perspectives, we explore the moderating role of familiarity. While recognizing the importance of acquiring new knowledge and skills in all alliances, we argue that building trust and understanding with the target firm is especially importantin pre-acquisition alliances. As a result, post-acquisition performance will be largely influenced by the acquiring firm's familiarity with the partner’s context, thereby enhancing the conditions for learning about the partner. We hypothesize that cultural and market familiarity positively moderate the relationship from pre-acquisition alliances and post-acquisition performance. Using data from SDC Platinum, EIKON, and ORBIS, covering 712 majority or full acquisitions, we find strong support for our hypotheses. Specifically, pre-acquisition alliances are most effective in domestic and industrially related acquisitions. Additionally, the benefit of previous strategic alliances diminishes as cultural distance increases. These findings hold up under various matching techniques and have substantial implications for both scholars and practitioners.
AB - The relationship between pre-acquisition alliances and post-acquisition performance has been widely recognized, but there are differing explanations from existing theoretical perspectives. On the one hand, organizational learning emphasizes that prior strategic alliances allow the acquiring firm to learn from the target company, gaining new technological knowledge and skills. On the other hand, relational learning focuses on the acquiring firm’s understanding of the target firm’s working methods, culture, leadership styles, and overall organizational dynamics, i.e., learning about the target,facilitating the formation of psychological contracts and mutual understanding. To reconcile these perspectives, we explore the moderating role of familiarity. While recognizing the importance of acquiring new knowledge and skills in all alliances, we argue that building trust and understanding with the target firm is especially importantin pre-acquisition alliances. As a result, post-acquisition performance will be largely influenced by the acquiring firm's familiarity with the partner’s context, thereby enhancing the conditions for learning about the partner. We hypothesize that cultural and market familiarity positively moderate the relationship from pre-acquisition alliances and post-acquisition performance. Using data from SDC Platinum, EIKON, and ORBIS, covering 712 majority or full acquisitions, we find strong support for our hypotheses. Specifically, pre-acquisition alliances are most effective in domestic and industrially related acquisitions. Additionally, the benefit of previous strategic alliances diminishes as cultural distance increases. These findings hold up under various matching techniques and have substantial implications for both scholars and practitioners.
KW - mergers and acquisitions
KW - strategic alliances
KW - learning
KW - post-acquisition performance
KW - pre-acquisition alliance
U2 - 10.1016/j.lrp.2023.102386
DO - 10.1016/j.lrp.2023.102386
M3 - Article
SN - 0024-6301
SP - 1
EP - 18
JO - Long Range Planning
JF - Long Range Planning
M1 - 102386
ER -