Hybridization: Understanding the microdynamics of a postacquisition integration process

• Author: Rebeca Alves Chu,Thomaz Wood
• DOI: http://doi.org/10.1002/tie.21982
• Published date: 01 March 2019
• Date: 01 March 2019

INTERNATIONAL BUSINESS THEORY AND APPLICATION

Hybridization: Understanding the microdynamics

of a postacquisition integration process

Rebeca Alves Chu

1

| Thomaz Wood Jr.

2

1

Management Department, Business School

São Paulo, São Paulo, Brazil

2

Operations Management Department, FGV-

EAESP, São Paulo, Brazil

Correspondence

Thomaz Wood Jr., FGV-EAESP, Avenida Nove

de Julho, 2029, 01313-902 São Paulo, SP,

Brazil.

Email: thomaz.wood@fgv.br

There is no shortage of theoretical or empirical research on mergers and acquisitions (M&A).

Knowledge on the subject has grown substantially in recent decades. However, the integration

of firms involved in M&A remains a challenging and often unsuccessful process. In addition,

there is a scarcity of research on temporal dynamics within integration projects. This article

reports on the postacquisition integration of a business school into a university using the con-

cept of organizational hybridization as a theoretical lens. The aim was to identify the micrody-

namics that occurred during integration. We conducted an inductive case study, interviewing

professionals involved in the integration process, analyzing a wide range of documents, and

conducting participant observation over 6 years. Field research revealed that different organi-

zational components underwent distinct hybridization processes that were characterized by dif-

ferent degrees of conflict. This study contributes to the understanding of the microdynamics

that occur in postmerger or postacquisition integration processes, focusing on the complex

adjustments inherent in these developments.

KEYWORDS

case study, mergers and acquisitions, microhybridization, organizational hybridization,

postacquisition integration

1|MEETING OF THE WATERS

Tourists traveling to the Brazilian Amazon often visit the “meeting

of the waters,”which is the confluence of two rivers: the Negro

River, with its dark black water, and the Solimões River, with its

muddy brownish water. Instead of mixing, the waters of the two

rivers run along the same bed for almost four miles but remain

separate because of differences in their temperatures, densities,

and velocities. The “meeting of the waters”is a suitable metaphor

for many mergers and acquisitions (M&A), in which integration

processes can take months or even years—or may never be fully

completed.

M&A are undertaken to (supposedly) increase the value of the

combined companies, strengthen strategic positioning, access new

markets, and achieve economies of scale and synergy (Haspeslagh &

Jemison, 1993; Hitt, Harrison, & Ireland, 2001). However, some stud-

ies show that approximately 50% of M&A fail (e.g., Datta, 1991; Lu,

2014). Other studies suggest that value creation may be related to

the ability to integrate the operations of the companies involved

(e.g., Epstein, 2005; Jap, Gould, & Liu, 2017; Larsson & Finkelstein,

1999; Schweiger, 2002; Steigenberger, 2017).

Critical success factors for a merger or acquisition can be classi-

fied into two groups (see Gomes, Angwin, Weber, & Tarba, 2013).

The first group includes factors that precede a merger or acquisition,

such as the choice and evaluation of the strategic partner (Boyle &

Winter, 2010), the payment of the right price (Hayward, 2002), and

communication (Light, 2001). The second group includes factors that

follow the merger or acquisition, such as integration strategies

(Angwin & Meadows, 2015), postacquisition leadership (Nemanich &

Vera, 2009), communication during implementation (Papadakis,

2005), and management of cultural differences (Liu & Woywode,

2013; Viegas-Pires, 2013).

Although this second group of factors is essential for the success

of a merger or acquisition, few empirical studies examine integration

(Daniliuc, Bilson, & Shailer, 2014). In fact, there is still a dearth of in-

depth empirical studies that show how a postmerger or postacquisi-

tion integration process occurs in practice (Almor, Tarba, & Benjamini,

2009; Burgelman & Mckinney, 2006; Rottig, Schappert, & Starkman,

DOI: 10.1002/tie.21982

Thunderbird Int. Bus. Rev. 2019;61:353–362. wileyonlinelibrary.com/journal/tie © 2018 Wiley Periodicals, Inc. 353