Mitigating Cross-border Acquisition Uncertainties: The Role of Organizational Slack and Acquisition Experience
Advances in Mergers and Acquisitions
ISBN: 978-1-80071-720-6, eISBN: 978-1-80071-719-0
Publication date: 29 September 2021
Abstract
Organizational and cultural misfits have been among the most vital factors associated with Mergers and Acquisitions (M&A) failure. Admittedly, in a foreign environment, such problems can be further amplified due to the liability of foreignness, increased information asymmetries and additional transaction costs, further hampering the success of the deal. Considering that, in 2019 alone, the value of cross-border acquisitions (CBAs) exceeded $1.2 trillion (out of $3.9 trillion of the total global M&A value), deciphering the “black box” of CBA success comes at the forefront of the academic and managerial interest. In this chapter, the authors examine a missing link on the post-acquisition performance for cross-border deals, the role of organizational slack. The authors particularly theorize that slack may benefit foreign acquirers, by sheltering them against liability of foreignness and acculturation costs; yet this benefit will be conditional upon the type of slack and the acquirer’s prior CBA experience.
Keywords
Citation
Bozos, K., Bamiatzi, V. and Cavusgil, T. (2021), "Mitigating Cross-border Acquisition Uncertainties: The Role of Organizational Slack and Acquisition Experience", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 20), Emerald Publishing Limited, Leeds, pp. 13-24. https://doi.org/10.1108/S1479-361X20210000020002
Publisher
:Emerald Publishing Limited
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