Information Technology Implications in Corporate Mergers, Acquisitions, and Demergers Público

Abstract

Mergers, acquisition, and demergers are common elements of corporate restructuring and renewal. During this dynamic process, companies alter themselves by realigning resources. Corporate change requires changes in information technology (IT), like the set-up of new IT operating environments. Prior research has investigated IT integration following mergers or acquisitions. Little is known about the process of IT dis-integration in the context of corporate demergers. This initial study develops a process model of IT dis-integration centered on a representative in-depth case study, identifying three phases and the impediments that threaten successful outcomes. The initiation phase involves secrecy and limited experience; the closing phase involves time pressure, tension, and fear among employees; and the transition phase involves lack of urgency, loss of knowledge, and unforeseen uncertainties.
Corporate restructuring and renewal depend on access to external competitive resources, which commonly motivate mergers and acquisitions. This is especially true in the IT industry, where speed of innovation leads to rapid knowledge depreciation and successful acquisition of external knowledge is important. Knowledge within acquired firms can be codified and easily transferred; however, competitive advantage often lies in individual-level knowledge residing within employees from the acquired firms. Academic research has identified the importance of retaining these employees;nevertheless, it remains unclear what level of retention is associated with technology acquisition success. This study applies a computational simulation to identify the steepest increase in acquiring firms' knowledge within the first forty percent of retained employees from acquired firms, suggesting a decrease in marginal utility.
Retention level is, however, not only a decision for the acquiring firm. Employees can choose whether to stay or seek employment elsewhere. This study attempts to understand if and why employees from acquired firms stay after technology acquisitions. Analysis of archival data indicates that less than twenty-five percent of patent inventors from acquired firms remain with the acquiring firm. Using job embeddedness as a theoretical framework identifies that inventors are more likely to stay when the acquired and acquiring firms are similar in regard to ownership structure. However, hypothesized success due to prior relationships between firms and geographical proximity is not supported.

Table of Contents

Table of Contents

Overview...1
Essay 1: Corporate Demerger: A Process Perspective on Information Technology Dis-
integration...11
Introduction...11
Background: Demerger, IT Dis-integration, Process Theory...15
Demerger...15
IT Dis-integration in Demerger...17
Process Theory...19
Research Methodology...22
Research Context and Site Selection...23
Data Collection...24
Data Analysis...28
Case Analysis...31
Antecedents...34
Phase 1...35
Phase 2...43
Phase 3...49
Completion of IT Dis-integration in Three Waves...58
A Process Model of IT Dis-integration...62
Antecedent: Demerger Decision and Information Technology Environment...66
Phase 1 - Initiation...68
Phase 2 - Closing...72
Phase 3 - Transition...75

Completion of IT Dis-integration in Waves...80

Discussion...82
Implications...84
Limitations and Future Research...86
Conclusion...87
Essay 2: A Computational Modeling Approach to Understanding the Dynamics of
Knowledge Gain in Technology Acquisitions...89
Introduction...89
Theory...93
Knowledge...93
Organizational Learning...95
Technology Acquisitions...98
Model...103
March's Model of Organizational Learning...104
Knowledge-Acquisition-Model (KAM)...109
Computational Simulation and Results...115
Discussion...123
Limitations...125
Implications...126
Future Research...128
Conclusion...129
Essay 3: Knowledge as the Motive of Technology Acquisitions: Can Firms Retain the
Acquired Knowledge?...132
Introduction...132
Theory and Hypotheses...137
Technology Acquisitions...137

Knowledge and Knowledge-based View of the Firm...139

Human Resources in Mergers and Acquisitions...141
Innovators from Acquired Firms...143
Voluntary Turnover...144
Job Embeddedness - Links...145
Job Embeddedness - Fit...146
Job Embeddedness - Sacrifice...147
Methods and Data...149
Empirical Context...149
Sample Data...150
Measures...151
Model Specification..158
Results...160
Descriptive Statistics...160
Hypothesis Testing...163
Robustness...167
Discussion...168
Implications for Theory...172
Implications for Practice...173
Limitations and Future Research...174
Conclusion...175
Appendix...176
References...178

About this Dissertation

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School	Laney Graduate School
Department	Business
Degree	PhD
Submission	Dissertation
Language	English
Research Field	Business Administration, Management Business Administration, General
Palavra-chave	IT Separation IT Project Management IT Human Capital IT Management Technology Acquisitions Non-routine projects in IT Acquisition of Innovation IT in Mergers and Acquisitions Acquisition of Knowledge IT Process Management IT Dis-integration IT in Demergers or Divestitures
Committee Chair / Thesis Advisor	Konsynski, Benn, Emory University
Committee Members	Bharadwaj, Anandhi, Emory University Prietula, Michael J, Emory University

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