Showing papers by "Maurizio Zollo published in 1998"

The Impact of Knowledge Codification, Experience Trajectories and Integration Strategies on the Performance of Corporate Acquisitions

Abstract: This study addresses the following questions: (1) can organizations learn how to manage infrequent and heterogeneous tasks ? (2) If they can, then what are the mechanisms that might explain learning under these circumstances ?, and (3) what are the limitations under which these mechanisms operate ? A model based on explicit knowledge codification and tacit experience accumulation is submitted and tested using data from a sample of 183 acquisitions in the US banking industry Measures of post-acquisition integration strategies and of pre-acquisition resource characteristics are included in the model We find that tacit knowledge accumulation significantly impacts performance when the experiences are highly homogeneous, and that knowledge codification improves acquisition performance in the context of high post-acquisition integration, ie when the organizational challenge is particularly complex Also, the level of integration between the two firms involved in the acquisition positively influences performance, while the replacement of top managers in the acquired firm impacts performance in a negative fashion Implications are drawn for organizational learning theory and for a knowledge-based view of corporate acquisitions

Creating Value in Post-Acquisition Integration Processes

Abstract: After the Citigroup, the BankAmerica/Nationsbank and the Wells Fargo/ Norwest announcements earlier this year, there is very little that can surprise an observer of the US bank merger arena. Already this year, $813 billion of deals have been announced in the US only, compared with $920 billion during all 1997 (source: Financial Times, June 29). Banking is obviously taking the lion’s share with close to 30% of the volume. Eight of the largest fifteen deals in history (worldwide) have been completed in the US banking industry, including the largest two. In spite of all this determination in pursuing acquisitive growth, however, the drivers for value creation in acquisition processes are far from being established. The CEO who looks around for advice is typically welcomed with truisms such as “don’t pay too much” or “pay attention to integration”. Although the literature has shown no value creation to the acquiring firm on average, the performance distribution has a very large, and largely unexplained, variance. This study focuses on post-acquisition integration decisions and on the mechanisms behind the creation of an organizational capability specialized in the management of integration processes. We believe, and the data confirm this belief to a large extent, that these two sets of explanations can supply the key to interpret the variance between successful and unsuccessful acquisitions, and thus to understand how value is created and under what conditions this might or might not happen. What you have in your hands now is a summary of the most important results of the study. We hope you find it as interesting as the study itself has been for us.

Strategies or Routines ? Knowledge Codification, Path-Dependence and the Evolution of Post-Acquisition Integration Practices in the U.S. Banking Industry

Abstract: In a study of post-acquisition management practices in the U.S. commercial banking industry, we examine how firms codify their knowledge from previous acquisition experiences and routinize their post-acquisition decisions. We find that firms with higher levels of knowledge codification tend to integrate their acquired units more and to replace the existing top management team with higher probability. Also, acquirers tend to replicate their integration and resource replacement decisions irrespective of variations in the resource characteristics of their targets, suggesting strong tacit routinization effects.