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The Role of Acquisitions in Reshaping Business Capabilities in the International Telecommunications Industry

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  • Capron, Laurence
  • Mitchell, Will

Abstract

This paper focuses on the relationships between observed processes of post-acquisition activities within four cross-border horizontal acquisitions that occurred in the telecommunications equipment manufacturing sector between 1988 and 1992. We discuss the desirability of such acquisitions from a corporate and social welfare standpoint. We report a detailed survey of the context, post-acquisition activities and outcomes of the four acquisitions. The acquisition context includes industry characteristics, target characteristics, target strengths and acquisition motives. Post-acquisition activities include several dimensions of business restructuring, resource redeployment and creation of integration mechanisms. Acquisition outcomes include impact on business capabilities, financial performance and judgments of overall success. We conclude that the results provide stronger support for strategic reconfiguration and productive efficiency explanations for horizontal acquisitions than they do for market power, target mismanagement or resource appropriation explanations. Copyright 1998 by Oxford University Press.

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  • Capron, Laurence & Mitchell, Will, 1998. "The Role of Acquisitions in Reshaping Business Capabilities in the International Telecommunications Industry," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 7(4), pages 715-730, December.
    • Handle: RePEc:oup:indcch:v:7:y:1998:i:4:p:715-30
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    Cited by:

    1. Philipp Meyer‐Doyle & Sunkee Lee & Constance E. Helfat, 2019. "Disentangling the microfoundations of acquisition behavior and performance," Strategic Management Journal, Wiley Blackwell, vol. 40(11), pages 1733-1756, November.
    2. Lougui, Monia & Broström, Anders, 2016. "New firm formation in the wake of mergers and acquisitions: Are employees pushed or pulled into entrepreneurship?," Working Paper Series in Economics and Institutions of Innovation 427, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    3. Bernad, Cristina & Fuentelsaz, Lucio & Gómez, Jaime, 2010. "The effect of mergers and acquisitions on productivity: An empirical application to Spanish banking," Omega, Elsevier, vol. 38(5), pages 283-293, October.
    4. Nicholas S. Argyres & Todd R. Zenger, 2012. "Capabilities, Transaction Costs, and Firm Boundaries," Organization Science, INFORMS, vol. 23(6), pages 1643-1657, December.
    5. Monia Lougui & Anders Broström, 2021. "New firm formation in the wake of mergers and acquisitions: An exploration of push and pull factors," Journal of Evolutionary Economics, Springer, vol. 31(1), pages 65-89, January.
    6. Sumit K. Majumdar & Rabih Moussawi & Ulku Yaylacicegi, 2018. "Capital Structure and Mergers: Retrospective Evidence from a Natural Experiment," Journal of Industry, Competition and Trade, Springer, vol. 18(4), pages 449-472, December.
    7. Abdelillah Hamdouch & Esther Samuelides, 2000. "Innovation and Competition in IT Service Industries," Cahiers de la Maison des Sciences Economiques r00044, Université Panthéon-Sorbonne (Paris 1).
    8. Grigoriev, A. & Uetz, M.J., 2005. "Scheduling parallel jobs with linear speedup," Research Memorandum 015, Maastricht University, Maastricht Research School of Economics of Technology and Organization (METEOR).
    9. Lucia Piscitello & Larissa Rabbiosi, 2005. "The impact of inward FDI on local companies' labour productivity: evidence from the Italian case," International Journal of the Economics of Business, Taylor & Francis Journals, vol. 12(1), pages 35-51.

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