The role of product lines in determining the degree and speed of integration : evidence from the pharmaceutical MNCs in cross-border acquisitions | |
| Author | Rashid, Robina |
| Call Number | AIT Diss. no.SM-21-06 |
| Subject(s) | Consolidation and merger of corporations Pharmaceutical industry |
| Note | A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy in Management |
| Publisher | Asian Institute of Technology |
| Abstract | Despite the growing number of acquisitions of business units (BUs) by multinational companies (MNCs), international business literature is limited to the investigation of post-acquisition integration at the level of firms. This research aims to address this gap by investigating the acquirer MNCs' strategic motivation in acquiring BUs and how they manage post-acquisition integration at the BU level. The main focus is studying the pivotal role of an acquired BU's product lines in order to determine the degree and speed of integration. This dissertation adopts the multiple case study method. Based on three in-depth cases of cross-border acquisitions, the research focuses primarily on the experience of the acquisition of BUs by pharmaceutical MNCs that exemplify and develop the post acquisition integration framework. Analysis of the cases reveals three key findings. Firstly, the acquired BU's product lines are the key strategic motive for the acquiring MNC, and they become significant in the decisions taken during post-acquisition integration. Secondly, the three phases of the acquired product lines, namely the marketed, upcoming, and Research and Development (R&D) pipelines, can set the speed of integration to be either fast or slow. Thirdly, based on the similarity and complementarity dimensions, the market relatedness of the acquired product lines determines the degree of integration between the acquirer and the acquired BU. The dissertation advances the ongoing conversation on the interplay between the resource-based view (RBV) and cross-border acquisition literature, by investigating the association of the speed and degree of integration with the acquired BU's product lines. The theoretical contribution addresses the call for empirical research on the disaggregation of the acquired resources that narrow the focus and develop a deeper insight into the role of a specific acquired resource (the acquired BU's product lines) during the post-acquisition integration. More importantly, this research extends the literature on post-acquisition integration, as prior research on acquired BUs was limited to determining their innovation performance (Karim and Mitchell, 2004), and post acquisition integration was investigated primarily at the firm level. The investigation of post-acquisition integration between BUs corroborates the study by Bauer, Rothermel, Tarba, Arslan, and Uzelac (2020) that suggests exploring "rather under-investigated" empirical contexts in acquisition literature. In addition to these main contributions, the dissertation presents a set of contributions to the acquisition literature. Firstly, this research addresses the speed of integration by associating it with the phase of the acquired product lines. Also, it depicts a different perspective on where to focus first after an acquisition by highlighting the quality, price, and service concerns of the customers, employees, competitors, and stakeholders scattered across the world. Keeping these concerns in view, this research proposes the rapid integration of the acquired marketed product lines to achieve cross-border acquisition success. The finding that integration speed hinges on the phase of the product lines, and varies for each phase, validates the studies that question conducting all the integration aspects with a similar speed (Bauer, Strobl, & Matzler, 2016; Ranft & Lord, 2002). Secondly, this research contributes to the limited literature on market relatedness (Bauer et al., 2020; Sinkovics, Sinkovics, Lew, Jedin, & Zagelmeyer, 2015), by highlighting the role of market relatedness of product lines in their integration, and this influences the decision of displacement or retention of other acquired resources. This different perspective addresses the gap in previous studies (Homburg and Bucerius, 2005), which investigates similarity or complementarity of all the acquired resources, but consequently failed to develop the relative importance of a specific acquired resource vis-à-vis other acquired resources (Haleblian, Devers, McNamara, Carpenter, & Davison, 2009). Thirdly, previous research mainly asserts the presence of a single dimension in one acquisition deal (Homburg & Bucerius, 2005; Kim & Finkelstein, 2009), yet the findings of this research suggest that an acquisition deal may entail similarity and complementarity dimensions of market relatedness "both, alone, or neither." Fourthly, the multiple case studies in this research help decide between the complete to the minimal degree of integration for managerial practice implications. Finally, the research findings enrich the managerial understanding of various integration activities, such as reconfiguration, retention, elimination, the consolidation of resources, and how they are happening in the BUs. |
| Year | 2021 |
| Type | Dissertation |
| School | School of Management (SOM) |
| Department | Other Field of Studies (No Department) |
| Academic Program/FoS | Doctor of Philosophy in Management (Publication code = SM) |
| Chairperson(s) | Badir, Yuosre F. M. |
| Examination Committee(s) | Ransom, Lakeesha K.;Salin, Krishna R. |
| Scholarship Donor(s) | Higher Education Commission, Pakistan;Asian Institute of Technology, Thailand |
| Degree | Thesis (Ph.D.) - Asian Institute of Technology, 2021 |