How to improve acquisition performance: The role of a dedicated M&A function, M&A learning process, and M&A capability

DOIhttp://doi.org/10.1002/smj.2364
AuthorAnja Trichterborn,Lars Schweizer,Dodo Zu Knyphausen‐Aufseß
Published date01 April 2016
Date01 April 2016
Strategic Management Journal
Strat. Mgmt. J.,37: 763–773 (2016)
Published online EarlyView 19 February 2015 in WileyOnline Library (wileyonlinelibrary.com) DOI: 10.1002/smj.2364
Received 21 January 2011;Final revisionreceived 24 December 2014
HOW TO IMPROVE ACQUISITION PERFORMANCE:
THE ROLE OF A DEDICATED M&A FUNCTION, M&A
LEARNING PROCESS, AND M&A CAPABILITY
ANJA TRICHTERBORN,1DODO ZU KNYPHAUSEN-AUFSEß,2*and LARS
SCHWEIZER3
1Faculty of Economics and Management, Technische Universität Berlin, Berlin,
Germany
2Chair of Strategic Leadership and Global Management, Technische Universität
Berlin, Berlin, Germany
3Department of Management and Microeconomics, UBS Endowed Chair of
Strategic Management, Goethe University Frankfurt, Frankfurt am Main, Germany
How to improve the performance of mergers& acquisitions (M&A) continues to be a confounding
issue. We show that a dedicated M&A function is a new phenomenon that is positively related to
a rm’s M&A performance and M&A learning process. Moreover, we nd that an M&A learning
process (involvingarticulation, codication, sharing, and internalization) helps build up an M&A
capability, which in turn is positively relatedto a rm’s overall M&A performance. We use survey
data from a sample drawn from the M&A activities of German rms to test our arguments. Ltd.
Copyright © 2015 John Wiley & Sons, Ltd.
INTRODUCTION
Extant research on mergers and acquisitions
(M&A) has made two important observations: (1)
M&A are conducted with multiple motives in mind
(Schweizer, 2005), and the M&A process is very
complex (Larsson and Finkelstein, 1999), calling
for a more detailed and differentiated analysis of the
M&A activities and its organizational antecedents
(Haleblian et al., 2009); (2) most acquisitions
create little or no value (e.g., Aktas, de Bodt, and
Roll, 2009, 2011; King et al., 2004), and the value
gains and losses are unevenly distributed between
bidder and target (Moeller, Schlingemann, and
Stulz, 2004, 2005). Given the highly complex
Keywords: M&A function; M&A capability; M&A expe-
rience; M&A performance; structural equation model
*Correspondence to: Dodo zu Knyphausen-Aufseß, Chair of
Strategic Leadership and Global Management, Technische Uni-
versität Berlin, Strasse des 17. Juni 135/H92, 10623 Berlin,
Germany. E-mail: knyphausen@strategie.tu-berlin.de
Copyright © 2015 John Wiley & Sons, Ltd.
nature of M&A, no common way of measuring
M&A success has been identied so far (Javidan
et al., 2004).
Superior M&A performance may be explained
by prior M&A experience. Since studies analyzing
this do not present consistent results (Al-Laham,
Schweizer, and Amburgey, 2010; Hayward, 2002),
the question arises how rms can manage M&A
to increase the probability of M&A success. In
the alliance context, Kale and Singh (2007: 981)
assume that “[f]irms with greater alliance success
are presumed to have alliance capability.”We argue
that the development of an M&A capability (Laa-
manen and Keil, 2008) and the existence of a dedi-
cated M&A function as a new phenomenon have a
positive impact on M&A performance. So far, there
are no studies stating what exactly constitutes an
M&A function (or how it is built).
This study contributes to M&A research in sev-
eral ways. First, our paper analyzes the relationship
between an M&A function, M&A capability, and

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