Foreign acquisitions : management of the integration process

Sammanfattning: The basic purpose of this thesis is to investigate how multinational corporations manage the integration of acquired subsidiaries into the existing systems and structure of the acquiring group. By integration is meant the instruments, procedures and processes (integrative devices) used by the acquiring MNC in order to undertake changes in the systems and structure in the acquired subsidiary. Integration may be divided into two major categories. First, the MNC integrates the new entity into the systems used for coordination and control of its foreign subsidiaries, i.e. to manage headquarter-subsidiary relationships. Second, integration also aims at obtaining various coordination benefits between the MNC and the new unit. This latter form of integration is defined as operating integration The need for and mode of integration of coordination and control systems is influenced by the strategic and environmental context of the acquiring MNC. The need for integration of operating systems is influenced by the strategic nature of the acquisition, i.e. the extent to which different forms of coordination benefits can be obtained. A strong degree of interdependence exists between the strategic nature of the acquisition and the strategic and environmental context of the acquiring MNC. Earlier research has shown that the management of the post-acquisition phase (i.e. the integration process) is of critical importance for the successful outcome of an acquisition. Thus, it is of interest to study the integration process, both to its nature and structure as well as to its objectives and outcome. The research indicates that the degree of efficiency of post-acquisition management is a major determinant for a successful acquisition program. Efficiency of post-acquisition management can be measured against a set of criteria, some referrable to integration of coordination and control systems, some to the integration of operating systems. The thesis consists of five articles, three in this volume, and two in the appendix to this volume (publication no 146). The three articles in this volume are: "Corporate Acquisitions and Divestments The Strategic Decision-Making Process", "Strategic Aspects of Post-Acquisition Management in MNCs", "Management of the Post-Acquisitions Processes in Diversified MNCs". The research design is based on comparison of intensive case studies. In total, five Swedish multinational corporations were investigated, in which totally eleven acquired subsidiaries were being studied.