"The Evolving Role of Mergers and Acquisitionsin Competitve Strategy Research"

This chapter intends to investigate the role of strategic mergers and acquisitions (hereinafter M&As), traditionally viewed as a corporate strategy option, in sustaining competitive strategy, offering a description of the whole acquisition process and discussing the main and conflicting results produced by the abundant empirical research on this topic. Mergers and acquisitions are nowadays frequent events in organizational lives. The two terms are normally used interchangeably in strategic management literature. Epstein (2004) claims that a distinction among mergers and acquisitions is necessary. Mergers of equals involve two entities of relatively equal stature coming together and taking the best of each company. An acquisition involves a much easier process of fitting one smaller company into the existing acquiring firm. This distinction, however, does not appear to be relevant when discussing the implications on the organizations involved, as both produce, at different pace and level, turmoil during the acquisition and integration problems once the deal is completed. The established business literature considers M&As as a corporate strategy tool by which firms sustain and implement growth. Acquirers can gain immediate access to technologies, products, distribution channels, and desirable market positions. Acquisitions can bring into a company capabilities it finds hard to develop internally, and provide the opportunity to leverage the existing ones; under this regard, they help to gain or renew sustainable competitive advantages. This is consistent with the view of a firm as a set of capabilities embodied in an organizational framework.