Thesis (M.A.)--Georgia State University, 2006. / Typescript. Includes bibliographical references (leaves 151-158). Also available via the World Wide Web.

Bakgrund: Globalisering ger förutsättningar för tillväxt av internationella fusioner och förvärv. Vad gäller att de svenska företagens framkant inom IT-branschen drar till sig amerikanernas intresse för förvärvning av det svenska för att komma åt egenskapen som det svenska företaget innehar. Problemformulering: Vilka kommunikations- och styrningsfaktorer är viktiga vid internationella fusioner och förvärv? Syftet: Att skapa förståelse för internationella fusioner och förvärv genom att analysera och utvärdera kommunikation och styrningsprocessen, samt kulturens gestalt före och efter ett amerikanskt förvärv av ett svenskt företag. Metod: Undersökningen är en fallstudie med kvalitativ ansats och består av intervjuer med ledningen som har varit inblandade före och efter det internationella fusion och förvärvet. Slutsats: Det är viktigt att ta hänsyn till följande styrningsfaktorer: företagets storlek och hemmamarknad, organisationsstruktur och kärngrupp/ledaren samt kommunikationsfaktorerna: extern kommunikation, intern kommunikation och kommunikationens riktning, då dessa har en avgörande roll i integrationsprocessen av en internationell fusion och förvärv.

Acquisitions are considered to be the ultimate form of corporate growth in today’s increasingly complex and global business economy. There is a significant lack of research done in understanding the growth of I.T. SMEs by means of acquisitions. All previous research concerning acquisitions has focused mostly on large sized organizations, involved in cross national operations. SMEs do not compete in an international arena like multinational corporations, who have already inherited a culture of accommodating acquired firms and achieving synergy. Therefore the question here arises as to how SMEs pursue growth via acquisitions despite having limited resources and capabilities.   Purpose: The purpose of this thesis is to study acquisition growth strategy of two I.T. firms (SYSteam AB and Sigma AB) which have grown from SMEs to large firms by means of acquisitions.   Method: In order to fulfill the purpose of this study the authors conducted a qualitative case study of two I.T. firms. The authors used interview as the data collection method.   Results/conclusions: There are many different factors which lead a firm to pursue acquisitions. Increased market share, proximity to key customers and entrepreneurial nature of the founders were the main ones. Acquisition brings about numerous synergies and integration is a key to capitalizing upon these synergies. Acquisition induces entrepreneurial orientation and facilitates the emergence of acquisition capabilities within the acquiring firm.

Since it is a normal path for business to go for internationalization through merge and acquisition, there are always cases that end up with non expectable results. Therefore, there do exist huge risks in doing merge and acquisition. However, the probability of making a successful merge and acquisition could be improved by applying for appropriate strategic concerns. Finally, it is essential for managerial implications to find out the key factors of successful merge and acquisition. The thesis tried to find out factors that affect the process, and the outcome of merge and acquisition. By interviewing these key persons of W Company, we concluded with problems including culture, leadership, organization process, and human resources management that do have significant influence on the merge and acquisition progress. Furthermore, we try conclude and making hypotheses according to our interview. The purpose of our thesis was to discuss factors that affect the performance of merge and acquisition, such as corporate culture, leadership, operation process, and organization. According to the conclusions made from Narrative Method, it showed that these factors to some extent did have significant influence on the performance of post merge and acquisition. Therefore, anyone who wants to have splendid performance of merge and acquisition could not ignore these ones. According to the results, as we defined that whenever the performance ¡§turns from loss to profit,¡¨ it means that the merger is getting into success. Therefore, as the case is making huge profit many years after the action of merger, this is really a ¡§success¡¨ case. Therefore, the propositions and survey records are really precious and referral literatures for practical and academic.

Denna kandidatuppsats söker att förklara vilken typ av effekter en fusion kan ha på en organisationskultur. För att genomföra en analys av fusionens effekter krävs att organisationskulturen sonderas och därmed kan användas som grund. Vi har valt att arbeta med Fläkt Woods eftersom de genomgick en fusion 2002 då det svensk-brittiska företaget föd-des. Arbetet fullföljdes genom en kvalitativ vinkel i form av en fallstudie. Sex djupgående intervjuer genomfördes med chefer och chefsassistenter på Fläkt Woods enheter i Enköping, Jönköping och Växjö. För att kunna blottlägga paradigmen, och därigenom skapa en förståelse för de underliggande värderingar som utgör en kultur, användes Cultural Web. Vi valde sedan att applicera Results of Cultural Integration (RCI)-modellen för att vidare förklara effekterna av fusionen. Som stöd för dessa modeller har vi använt oss av teorier om den kulturella integrationsprocessen och hur man, genom tre instrument, stödjer denna process. Resultatet av vår undersökning av paradigmen, som är representativt för organisationskulturen, pekar mot en atmosfär som omfattar positiva attityder, demokratiska beslutsförfarande, framtidsfokus och trygghet. Fusionen påverkade organisationskulturen genom att starta en pågående transformationsprocess. Detta är synligt då Enköping, Jönköping och Växjö för tillfället befinner sig i olika faser i denna process. Växjö utövar mycket samarbete med den brittiska delen av företaget och upplever därför kulturen som mer enhetlig än vad Enköping gör, där samverkan med Colchester är närmast obefintlig. Enheten i Jönköping har nått ett mellanliggande stadium eftersom de dels håller kvar sin egen kultur, men genom den ökande interaktionen med Woods utsätts för nya aspekter av organisationskulturen. Vi tror att Fläkt Woods organisationskultur kommer att fortsätta att förändras till de olika enheterna är mer synkroniserade. Förvandlingen mot en ny Fläkt Woods-kultur kommer inte att avstanna förrän Enköping och Jönköping har nått det stadium som Växjö befinner sig i för tillfället, och därmed börjar anamma den nya kulturen i en större utsträckning. Det ska dock noteras att eftersom ägarna till Fläkt Woods, Compass Holdings, inte har pressat högsta ledningen att medvetet arbeta med frågor som rör organisationskulturen så kommer integrationsprocessen att ta längre tid än om frågan hade varit av högre prioritet / This bachelor thesis aims to explain the area of how a merger can affect a corporate culture. In order to do this, the corporate culture needs to be explored to found a basis for the analysis of the merger effects. We have chosen to work with Fläkt Woodsas they took part of a merger in 2002 where the Swedish-British company was founded. The work was carried out with a qualitative approach, in the form of a case study. We performed six in depth interviews, with managers and managers’ assistants at Fläkt Woodssites in Enköping, Jönköping and Växjö. In order to uncover the paradigm, and thus understand the underlying assumptions of the culture, we used the Cultural Web. To further explain the effects of the merger, an application of the Results of Cultural Integration (RCI)-model was performed. To support the analysis we used theories on the cultural integration process as well as on how to support the integration process through three instruments. The results of our investigations of the cultural paradigm, which we hold as representative for the corporate culture, pointed toward an atmosphere which comprised positivism, democracy, focus on the future and safety. The merger affected the corporate culture by starting off an ongoing transformation process. This is visible as Växjö, Jönköping and Enköping are currently in different phases in the process. Växjö cooperate the most with the British unit situated in Colchester and thus experiences the culture as more unified than Enköping does where no interaction with England takes place. The site in Jönköping has reached an intermediate stage as they are partly clinging on to their own culture but at the same time, through the increasing interaction with Woods, are exposed to new aspects of the corporate culture. We believe that the corporate culture of Fläkt Woodswill continually change until the sites are more in tune with each other. The transformation towards a new Fläkt Woodsculture will not stop until Enköping and Jönköping have reached the stage that Växjö is currently in, and thus start to embrace the new culture to a larger extent. However, as the owner of Fläkt Woods, Compass Holdings, has not put any pressure on the top management to consciously work with the issues of corporate culture, the integration process will take longer than if the matter was of higher priority.

Syftet är att analysera integrationen i förvärvsprocessen mellan Pernod Ricard och Vin&Sprit genom att göra en fallstudie för att se vilka förutsättningar de har för att lyckas. Undersökningen är en fallstudie och har en kvalitativ ansats. Metoden i denna uppsats kommer att bestå av intervjuer och skriftliga källor. Till största delen används primärdata men även sekundärdata kommer att förekomma. Erfarenhet och tidigare kunskap om internationella förvärv spelar en stor roll vid internationella förvärvsprocesser. Kulturella skillnader verkar inte spela en så stor roll som det ofta sägs. En decentraliserad affärsmodell kan dock förhindra att de eventuella kulturella skillnader som finns inte påverkar förvärvsprocessen negativt. Andra viktiga faktorer vid ett internationellt förvärv är ledarskap, kommunikation och utformandet av en ny vision. / The purpose is to analyze the integration of the acquisition process between Pernod Ricard and Vin&Sprit by making a case study to see what conditions they have to succeed. This study is a case study with a qualitative approach. The method in this paper consists of interviews and written sources. For the most part primary data is used, but secondary data will also occur. Experience and previous knowledge of international acquisitions play a major role in international acquisition processes. Cultural differences do not seem to play as large a role as it is often said. A decentralized business model can, however, prevent potential cultural differences from affecting the acquisition process in a negative way. Other important factors in an international acquisition process are leadership, communication and the creation of a new vision.

In this dissertation, I try to advance our understanding of how managerial discretion and corporate financial flexibility affect various corporate outcomes such as failure, excessive (sub-optimal) continuation, firm growth and investment, in three novel ways. First, I show that the empirical effect of finance is not merely a misspecified real influence but rather that the financial structure of firms matter for firm growth and investment where the real effects of finance arise out of the imperfect substitutability between internal funding and external private credit. Second, using managerial mergers and acquisitions (M&A) investment decisions as an identification mechanism, I find that managerial discretion combined with corporate financial flexibility may lead to distortions in corporate investment and financing policies, and those distortions cost the various stakeholders of the firm dearly. Furthermore, using another sample of distressed firms worth more dead than alive, I, along with a co-author, show that most of these firms continue operations long after the optimal exit time. The failure to liquidate costs the typical sample firm over three years 8.7% of its assets in lost earnings relative to the industry median. Finally, I find that capital market does not fully internalize the costs associated with managerial sub-optimal behaviors in the short run. Although the market disciplines managerial sub-optimal behaviors in the long run, the market disciplinary mechanisms may not be swift enough to forestall falling values for the various stakeholders of the firm. Succinctly, the findings in this dissertation suggest that managerial discretion and corporate financial flexibility entail real consequences for various firm dynamics. The traditional line of argument, ``Blame It on the Market," may not be well grounded, and firms need to carefully examine their investments and financing policies in good times to cushion against systematic shocks in bad times.

In this dissertation, I try to advance our understanding of how managerial discretion and corporate financial flexibility affect various corporate outcomes such as failure, excessive (sub-optimal) continuation, firm growth and investment, in three novel ways. First, I show that the empirical effect of finance is not merely a misspecified real influence but rather that the financial structure of firms matter for firm growth and investment where the real effects of finance arise out of the imperfect substitutability between internal funding and external private credit. Second, using managerial mergers and acquisitions (M&A) investment decisions as an identification mechanism, I find that managerial discretion combined with corporate financial flexibility may lead to distortions in corporate investment and financing policies, and those distortions cost the various stakeholders of the firm dearly. Furthermore, using another sample of distressed firms worth more dead than alive, I, along with a co-author, show that most of these firms continue operations long after the optimal exit time. The failure to liquidate costs the typical sample firm over three years 8.7% of its assets in lost earnings relative to the industry median. Finally, I find that capital market does not fully internalize the costs associated with managerial sub-optimal behaviors in the short run. Although the market disciplines managerial sub-optimal behaviors in the long run, the market disciplinary mechanisms may not be swift enough to forestall falling values for the various stakeholders of the firm. Succinctly, the findings in this dissertation suggest that managerial discretion and corporate financial flexibility entail real consequences for various firm dynamics. The traditional line of argument, ``Blame It on the Market," may not be well grounded, and firms need to carefully examine their investments and financing policies in good times to cushion against systematic shocks in bad times.

Esta tesis consiste en cuatro trabajos independientes. En amplios términos los dos temas generales que trata se pueden clasificar como fusiones horizontales y comparaciones de los parámetros del mercado del equilibrio entre competencia en precios y cantidades. En el articulo, "Fusiones con funciones de oferta", analizo los efectos de una fusión en una industria que produce un bien homogéneo cuando las empresas compiten eligien funciones de oferta. Las empresas eligen las funciones que relacionan su oferta con el precio de mercado. La competencia a la Cournot donde las empresas eligen a las cantidades, y la competencia a la Bertrand donde las empresas eligen los precios son casos especiales de la competencia en funciones de oferta. Considero una industria con un nivel fijo de capital. El capital una empresa define su tecnología de producción. Una fusión crea no solamente una empresa más grande, pero también una con una estructura más eficiente del coste que cualesquiera de sus componentes. Se muestra que cualquier fusión hace que todas las empresas que bajen su producción. La disminución de la producción por las empresas no participantes hace cualquier fusión rentable. Cualquier fusión en una industria con el capital social igualmente distribuido conduce a una pérdida del bienestar. Finalmente, una fusión es más probable que aumente el bienestar si aumenta la "simetría" en la industria. En mi trabajo "Fusiones bajo la incertidumbre", considero las decisiones de fusionar de empresas que producen bienes diferenciados en un mercado con choques idiosincrásicos de la demanda. Las empresas toman sus decisiones de fusionar antes de que choques afecten a la industria. Todas las empresas comparten la misma información sobre las condiciones de mercado en cualquier momento. En particular, después de un choque, todas las empresas saben todos los parámetros relevantes del mercado. Así, una fusión no produce ninguna ventaja informativa. Exploro el modelo bajo dos modos de competencia. Comparando los incentivos para fusionar con los incentivos en el caso de un mercado determinista, encuentro que la característica incierta en el modelo aumentan la rentabilidad de una fusión bajo competencia de precio, mientras que con competencia en cantidades, su efecto sobre la rentabilidad de la fusión es ambiguo. Sin embargo, si hay incentivos a fusionar en el caso determinista, después de la incertidumbre, aumenta la rentabilidad de la fusión. En mi trabajo "Comparando los precios de Bertrand y de Cournot: Un caso de substitutos y de complementos " confirma la sabiduría común según la cual la competencia del precio es más competitiva que la competencia de la cantidad. Resultados anteriores que apoyan esta visión en mercados de productos substitutos o en mercados de productos complementarios. Considero el caso cuando los complementos y los substitutos coexisten en un mercado de productos diferenciado. El artículo "Innovación en un modelo asimétrico: Comparando los equilibrios de Cournot y de Bertrand ". Este artículo compara los resultados y la eficiencia dinámica de los equilibrios de Cournot y de Bertrand en un duopolio diferenciado, donde solamente una empresa puede reducir el coste marginal antes de la competencia en el mercado de producto. Demostramos que, con alta sustitución y costes bajos de innovación: - los niveles de I&D pueden ser más altos bajo competencia de precio si la difusión es baja; - la producción, el exceso del consumidor y el bienestar total pueden ser más grandes bajo Cournot si la difusión es alta. Un nuevo resultado de este artículo es que con la innovación de proceso, los consumidores y los productores pueden encontrarse en mejor situación bajo competencia de cantidad. Proporcionamos ejemplos numéricos bien definidos que demuestran que estos resultados no dependen de la asimetría del modelo. / This dissertation consists of four pieces of independent work. In broad terms two general themes that it addresses can be classified as horizontal mergers and comparison of equilibrium market parameters in Cournot and Bertrand competition.In my paper, "Mergers with supply functions", I analyze the equilibrium effects of a merger in a homogenous good industry when firms compete by choosing supply schedules. Firms choose functions that relate their supply to the market price. Cournot competition where firms commit to quantities, and Bertrand competition where firms commit to prices are special cases of supply function competition - they exogenously impose horizontal and vertical supply schedules on the firms. I consider an industry with a fixed capital stock. A merger creates not only a larger firm, but also one with more efficient cost structure than any of its constituents. I find that any merger results in all firms lowering supply. The decrease in supply by non-participating firms makes any merger profitable. This differs from the effects of mergers under Cournot competition where the non-participating firms expand their supply, reducing the profitability of a merger. Any merger in an industry with equally distributed capital stock leads to a welfare loss. Finally, a merger is more likely to be welfare enhancing if it increases the "symmetry" in the industry.In my paper, titled "Mergers under uncertainty", I consider the merger decisions of firms producing differentiated products in a market with idiosyncratic demand shocks. Firms make their merger decisions taking into account that future shocks will hit the industry. All firms share the same information about the market conditions at any time. In particular, after the arrival of a shock all firms know all the relevant market parameters. Thus, a merger does not produce any informational advantage. I explore the model under two competition modes. By comparing the incentives for merger with the incentives in a benchmark case of a deterministic market, I find that the uncertain feature in the model increases the attractiveness of a merger under price competition, while with Cournot competition its effect on merger profitability is ambiguous. However, if there are incentives to merge in the deterministic case, then uncertainty increases the profitability of the merger. .In my short paper, "Comparing Bertrand and Cournot prices: A case of substitutes and complements", I reasses the common wisdom according to which price competition is more competitive than quantity competition. Previous results supporting this view deal with either substitute products markets or symmetric complement products markets. I consider the case when complements and substitutes co-exist in a differentiated products market. I introduce a set of symmetry criteria for this market, and show that when they are fulfilled, there exists a symmetric Bertrand equilibrium with a lower price than the price resulting from any symmetric Cournot equilibrium.The last piece of work in the thesis, "Innovation in an Asymmetric Setting: Comparing Cournot and Bertrand Equilibria", is a joint work with Ioana Chioveanu. This paper compares the outcomes and the dynamic efficiency of Cournot and Bertrand equilibria in a differentiated duopoly with substitute goods, where only one firm can reduce marginal cost before product market competition. We show that, with high substitutability and low innovation costs: -R&D levels can be higher under price competition if spillovers are low;-output, consumer surplus and total welfare can be larger under Cournot if spillovers are high.A new result of this article is that with process innovation, both consumers and producers can be better off under quantity competition. We provide well-defined numeric examples showing that these findings do not depend on the asymmetry of the model. The fact that innovation levels may be higher in Bertrand competition is consistent with the findings of Bester and Petrakis (1993). We identify a parameter equivalence that extends all their results from process to product innovation: In particular, incentives to improve quality may be larger under price competition, if substitutability is high.

Today, companies need to constantly expand their business to stay ahead of the severe competition. As competition grows more intense, it makes sense to join forces or simply acquire the rival to provide the most diverse service and to reach even the last customer. But is it really only about the need for efficiency to merge and acquire competitors? Are managers and investors right about their hope, that every new acquisition or merger offers more control over the market? Or are they themselves pushed into these promising expec- tations? This research focuses on how social behavior influences value creation in mergers and acquisitions. Throughout history, waves have been observed that reflect the excessive hype for perennial need of growth. Growth by acquisitions and mergers is seen as key element to create value by investors and managers. However, reality looks different. This research focuses on a two step approach by first describing underlying social catalysts that amplify the trend towards value creation in mergers and acquisitions. Secondly, to verify the inves- tigation of social behavior, the results are matched to a financial approach to detect wheth- er the transaction price justifies the current value and possible synergies or whether value is destroyed. A case study was conducted of Boss Media AB, a software company situated in the online gaming industry, which experienced several mergers and acquisitions since their founda- tions and was eventually acquired itself. The company provided an interview and further information on their involvement with mergers and acquisitions. The research showed that mergers and acquisitions continue to increase in number and value, leading to the amplitude of each wave being higher than the previous one. This also means that more value is destroyed. It is illustrated that managers being determined to have bet on the right horse, are often more influenced by social behavior and trends than they think they are. Blinded by the overestimation of their own abilities, and prosperous short- term profits, managers overvalue their investment choices. Hence, the research implies that managers destroy shareholder value even though they initially intended to create it.