Strategic resources: a missing role in understanding integration speed in international acquisition

• DOI: http://doi.org/10.1002/tie.21891
• Author: Tian Wei,Jeremy Clegg
• Date: 01 May 2018
• Published date: 01 May 2018

411

Published online in Wiley Online Library (wileyonlinelibrary.com)

© 2017 Wiley Periodicals, Inc. • DOI: 10.1002/tie.21891

Correspondence to: Tian Wei, Department of Business Administration, School of Management, Fudan University, Siyuan Building, 670 Guoshun Road,

Shanghai 200433, P. R. China, +86 (0)21 25011125 (phone), +86 (0)21 65643920 (fax), weitian@fudan.edu.cn

Strategic Resources:

A Missing Role in

Understanding

Integration Speed

in International

Acquisition

By

Tian Wei

Jeremy Clegg

It has long been debated whether integration speed positively or negatively contributes to acquisition

performance. Drawing on the resource-based view, this study addresses this controversy in the litera-

ture by investigating how integration speed for speci c categories of strategic resources affects the

integration process by capturing the expected value of an acquisition. With six in-depth case studies,

it concludes that the relationship between integration speed and acquisition performance cannot be

understood quantitatively; instead, the focus should be on the interaction between integration speed

and three broad groups of strategic resources (managerial, customer-oriented, and supplier-oriented)

post acquisition. The study further  nds that the understanding of integration speed should not be

RESEARCH ARTICLE

412

RESEARCH ARTICLE

Thunderbird International Business Review Vol. 60, No. 3 May/June 2018 DOI: 10.1002/tie

from a stand-alone viewpoint but rather from a dynamic perspective—a viewpoint combined with time

of integration. The  ndings of this study also complement the existing understanding of integration by

extending the knowledge of task integration and its interaction with human integration. © 2017 Wiley

Periodicals, Inc.

Introduction

C ounterintuitively, integration speed, which has

been considered a potential success factor for

international acquisition performance by a

number of management consulting firms (e.g., Fujitsu

Consulting, 2001 ; Mercer Management Consulting, 1997 ;

PricewaterhouseCoopers, 2000 ) and scholars (Angwin,

2004 ; Bauer & Matzler, 2014 ; Gomes, Angwin, & Weber,

2013 ; Homburg & Bucerius, 2006 ; Uzelac, Bauer, Mat-

zler, & Waschak, 2015 ), has only been addressed by a

handful of academic studies (Angwin, 2004 ; Homburg &

Bucerius, 2005, 2006 ; Inkpen, McClelland, & Rockwood,

2000 ; Ranft & Lord, 2002 ; Stahl et al., 2013 ). Even in this

limited academic work, the role of integration speed in

value creation in international acquisition remains con-

troversial. It has been argued that faster integration leads

to less uncertainty, lower resistance among employees,

effective value creation realization, and the inability of

competitors to profit from the internal organizational

change phase (Angwin, 2004 ; Cannella & Hambrick,

1993 ; Cording, Christmann, & King, 2008 ; Gomes et al.,

2013 ; Homburg & Bucerius, 2005). Conversely, a slow

integration process has been identified as appropriate

for minimizing conflicts and building trust between

the acquirer and the target firm (Olie, 1994 ; Ranft &

Lord, 2002 ), particularly for sociocultural integration in

international acquisitions (Stahl et al., 2013 ). Therefore,

whether an acquiring firm should seek a fast or slow inte-

gration speed is under debate.

From a resource-based view, the long-term competi-

tive advantage and superior performance of acquisitions

rely on the acquired strategically valuable resources and

on owned resources exploited by the acquirer (Graeb-

ner, Eisenhardt, & Roundy, 2010 ). Through the acquisi-

tion, the acquirer absorbs and redeploys the strategic

resources to enhance their performance (Capron, 1999 ;

Capron, Dussauge, & Mitchell, 1998 ; Capron & Pistre,

2002 ) and exploits their own existing resources to target

firms to create value from operating efficiency (Bauer

& Matzler, 2014 ; Meyer & Altenborg, 2008 ). For exam-

ple, acquirers can reserve complementary resources but

remove duplicated ones to achieve competitive advan-

tages (Buckley & Carter, 2004 ; Lane & Lubatkin, 1998).

Th ey can also exploit their own existing resources and

capabilities to target firms to create value for acquisition

(Caves, 1996 ; Dunning, 1981 , 1993 ). Regardless of which

approach is adopted, due to their distinct natures, differ-

ent types of strategic resources should not have the same

effects on post-acquisition integration. Successful value

creation therefore should rely on appropriate integration

approaches related to managing the strategic resources in

both the acquirers and target firms post acquisition.

Various researchers have attempted to understand

integration post acquisition from the strategic resources

it manipulates. For example, integration has been identi-

fied as consisting of three types: physical, procedural, and

sociocultural (Haspeslagh & Jemison, 1991 ). Birkinshaw,

Bresman, and Håkanson ( 2000 ) suggest considering

post-acquisition integration from two aspects: “task inte-

gration” and “human integration.” Based on observations

from three foreign acquisitions made by Swedish multi-

nationals, the authors argue that task integration is usu-

ally slower than expected due to the bounded rationality

of employees who are responsible for post-acquisition

integration. They further state that human integration

cannot be fast because the effect of human integration on

acquisition success is more complex than is usually sug-

gested. These studies attempt to link strategic resources

to integration. However, they fail to present details on

how integration speed associated with specific strategic

resources varies post acquisition to achieve the expected

acquisition performance.

In this study, we argue that the effects of integration

speed on acquisition performance should be analyzed

by considering the manipulation of strategic resources

in the integration process. Various resources can have

their own appropriate integration speed post acquisition,

particularly for international acquisitions, in which the

manipulation of strategic resources becomes more dif-

ficult due to the complexity of the context. Our research

question then becomes, “How does the integration speed

of strategic resources affect the integration process in

international acquisitions?” To provide a comprehensive

insight, six cases have been selected from three major

industrial sectors in the medical technology (MT) indus-

try, which was chosen using the critical case sampling

approach.