France Air-Klm Merger
Int. J. of Human Resource Management 15:8 December 2004 1355– 1370
The role of human resource management in cross-border mergers and acquisitions
Ruth V. Aguilera and John C. Dencker
Abstract Cross-border mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy. Although human resource management (HRM) can play a value-adding role in the merger process, existing research and evidence does not clearly demonstrate how it can do so. This paper addresses the neglected human side of M&As by providing a strategic fit framework to assess the link between M&A strategy and HRM strategy. Because cross-border M&As are of an order of magnitude more complex than domestic mergers, we examine contingencies in national contexts that influence outcomes in the merger process. We draw on recent empirical evidence to highlight HRM roles in terms of resources, processes and values that reflect the influence of both strategic fit and national context in the integration stage of cross-border M&A. Keywords Human resource management; mergers and acquisitions; corporate governance; international management; varieties of capitalism.
Introduction Mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy (Adler, 1997). Nevertheless, M&As are beset by numerous problems (Newburry and Zeira, 1997), with 50 per cent of domestic acquisitions – and 70 per cent of cross-border acquisitions – failing to produce intended results (Capron, 1999). Scholars have examined these problems in terms of strategic market entry choice (Hennart and Park, 1993), market valuations (Jensen and Ruback, 1983), value creation (Haspeslagh and Jemison, 1991) and firm performance (Galbraith and Stiles, 1984; Chatterjee, 1986; Blackburn and Lang, 1989), finding that difficulties in M&As trace to a lack of a
The role of human resource management in cross-border mergers and acquisitions
Ruth V. Aguilera and John C. Dencker
Abstract Cross-border mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy. Although human resource management (HRM) can play a value-adding role in the merger process, existing research and evidence does not clearly demonstrate how it can do so. This paper addresses the neglected human side of M&As by providing a strategic fit framework to assess the link between M&A strategy and HRM strategy. Because cross-border M&As are of an order of magnitude more complex than domestic mergers, we examine contingencies in national contexts that influence outcomes in the merger process. We draw on recent empirical evidence to highlight HRM roles in terms of resources, processes and values that reflect the influence of both strategic fit and national context in the integration stage of cross-border M&A. Keywords Human resource management; mergers and acquisitions; corporate governance; international management; varieties of capitalism.
Introduction Mergers and acquisitions (M&As) have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy (Adler, 1997). Nevertheless, M&As are beset by numerous problems (Newburry and Zeira, 1997), with 50 per cent of domestic acquisitions – and 70 per cent of cross-border acquisitions – failing to produce intended results (Capron, 1999). Scholars have examined these problems in terms of strategic market entry choice (Hennart and Park, 1993), market valuations (Jensen and Ruback, 1983), value creation (Haspeslagh and Jemison, 1991) and firm performance (Galbraith and Stiles, 1984; Chatterjee, 1986; Blackburn and Lang, 1989), finding that difficulties in M&As trace to a lack of a
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