Bittersweet aftertaste of M&A: Intertemporal coordination mechanisms to reduce indigestion problems

Abstract: M&A is a common method for companies to create rapid growth and several serial acquirers have developed acquisition programs as part of their corporate strategy. However, excessive acquisition intensity and neglected integration activities will over time lead to indigestion problems in complex and unmanageable organizations. Previous research describes different phases and dimensions of acquisitions separately, as they tend to be handled in such way by serial acquirers. Research about serial acquirers, acquisition programs and multiple integration processes is furthermore scarce. This research paper contributes to theories about serial acquirers' ability to manage their acquisition programs and organizational processes. The paper presents a qualitative single-case study of a serial acquirer and its radical changes of different organizational processes to handle indigestion problems. A framework is developed, where their activities are categorized as coordination mechanisms that are used to facilitate a balance by integrating different phases of the acquisition processes and consequently different dimensions of the acquisition programs. Three dimensions are seen to be especially critical to balance through this framework, which are acquisition pace, degree of integration and speed of integration. Serial acquirers are recommended to be proactive and develop coordination mechanisms early in their acquisition journey to prevent indigestion problems.