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A Bird in the Hand or Two in the Bush?: Integration Trade-offs in Technology-grafting Acquisitions

Author

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  • Puranam, Phanish
  • Singh, Harbir
  • Zollo, Maurizio

Abstract

Technology-grafting acquisitions are the acquisitions of technology-based entrepreneurial firms by established firms. They are often motivated by the need to bring products speedily to market, as well as develop future product pipelines. We argue that these are conflicting objectives; a trade-off between short and long-term performance arises because acquisition integration has opposite effects on the strength of the organizational linkages between target and acquirer, and on the continued innovative capacity of the target firm.

Suggested Citation

  • Puranam, Phanish & Singh, Harbir & Zollo, Maurizio, 2003. "A Bird in the Hand or Two in the Bush?: Integration Trade-offs in Technology-grafting Acquisitions," European Management Journal, Elsevier, vol. 21(2), pages 179-184, April.
  • Handle: RePEc:eee:eurman:v:21:y:2003:i:2:p:179-184
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    Citations

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    Cited by:

    1. Feiqiong Chen & Yao Chen & Fangfang Zhong, 0. "Integration decision-making in technology-sourcing cross-border M&As: a mathematical model," Computational and Mathematical Organization Theory, Springer, vol. 0, pages 1-22.
    2. Boris Groysberg & Linda-Eling Lee & Ashish Nanda, 2008. "Can They Take It With Them? The Portability of Star Knowledge Workers' Performance," Management Science, INFORMS, vol. 54(7), pages 1213-1230, July.
    3. Ye Jin Lee & Kwangsoo Shin & Eungdo Kim, 2019. "The Influence of a Firm’s Capability and Dyadic Relationship of the Knowledge Base on Ambidextrous Innovation in Biopharmaceutical M&As," Sustainability, MDPI, Open Access Journal, vol. 11(18), pages 1-17, September.
    4. Tamar Almor & Shlomo Y. Tarba & Avital Margalit, 2014. "Maturing, Technology-Based, Born-Global Companies: Surviving Through Mergers and Acquisitions," Management International Review, Springer, vol. 54(4), pages 421-444, August.
    5. Nima Amiryany & Marleen Huysman & Ard-Pieter de Man & Myriam Cloodt, 2011. "Serial Acquirers’ Reconfiguration Capability: Moving Beyond Existing Knowledge Boundaries," Chapters, in: Killian J. McCarthy & Maya Fiolet & Wilfred Dolfsma (ed.), The Nature of the New Firm, chapter 6, Edward Elgar Publishing.
    6. Wagner, Marcus, 2011. "To explore or to exploit? An empirical investigation of acquisitions by large incumbents," Research Policy, Elsevier, vol. 40(9), pages 1217-1225.
    7. Shainaaz MOOSA MUSTAFFA, 2017. "Success and Failures of Acquisitions: A Case Study for a Chemical Company," Expert Journal of Finance, Sprint Investify, vol. 5(1), pages 21-30.
    8. Feiqiong Chen & Yin Wang, 2014. "Integration risk in cross-border M&A based on internal and external resource: empirical evidence from China," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(1), pages 281-295, January.
    9. Shainaaz MOOSA MUSTAFFA, 2017. "Success and Failures of Acquisitions: A Case Study for a Chemical Company," Expert Journal of Finance, Sprint Investify, vol. 5, pages 21-30.
    10. Phanish Puranam & Harbir Singh & Saikat Chaudhuri, 2009. "Integrating Acquired Capabilities: When Structural Integration Is (Un)necessary," Organization Science, INFORMS, vol. 20(2), pages 313-328, April.
    11. Srikanth Paruchuri & Atul Nerkar & Donald C. Hambrick, 2006. "Acquisition Integration and Productivity Losses in the Technical Core: Disruption of Inventors in Acquired Companies," Organization Science, INFORMS, vol. 17(5), pages 545-562, October.
    12. Ramin Vandaie & Akbar Zaheer, 2015. "Alliance Partners and Firm Capability: Evidence from the Motion Picture Industry," Organization Science, INFORMS, vol. 26(1), pages 22-36, February.
    13. Marcus Wagner, 2008. "Technology sourcing by large incumbents through acquisition of small firms," SFB 649 Discussion Papers SFB649DP2008-055, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
    14. Brueller, Nir N. & Ellis, Shmuel & Segev, Eli & Carmeli, Abraham, 2015. "Knowing when to acquire: The case of multinational technology firms," International Business Review, Elsevier, vol. 24(1), pages 1-10.
    15. Wei, Tian & Clegg, Jeremy, 2017. "Exploring sources of value destruction in international acquisitions: A synthesized theoretical lens," International Business Review, Elsevier, vol. 26(5), pages 927-941.
    16. John Hagedoorn & Myriam Cloodt, 2012. "Mergers and Acquisitions and Firm Performance," Chapters, in: Michael Dietrich & Jackie Krafft (ed.), Handbook on the Economics and Theory of the Firm, chapter 28, Edward Elgar Publishing.
    17. Yu Yu & Nita Umashankar & Vithala R. Rao, 2016. "Choosing the right target: Relative preferences for resource similarity and complementarity in acquisition choice," Strategic Management Journal, Wiley Blackwell, vol. 37(8), pages 1808-1825, August.
    18. Larsen, Michael Holm, 2006. "Value Creation through ICT Integration in Merger & Acquisition Processes," Working Papers 2005-8, Copenhagen Business School, Department of Informatics.
    19. Feiqiong Chen & Yao Chen & Fangfang Zhong, 2017. "Integration decision-making in technology-sourcing cross-border M&As: a mathematical model," Computational and Mathematical Organization Theory, Springer, vol. 23(4), pages 524-545, December.
    20. Katrin Hussinger, 2012. "Absorptive capacity and post-acquisition inventor productivity," The Journal of Technology Transfer, Springer, vol. 37(4), pages 490-507, August.
    21. Anna Cabigiosu & Francesco Zirpoli & Markus Becker, 2014. "Developing shared product platforms during a merger: The Fiat-Chrysler case," Working Papers 11, Department of Management, Università Ca' Foscari Venezia.

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