Yueling Zhou, Emanuel Gomes, and Ferran Vendrell-Herrero have published their recent research about how organizational and relational learning and familiarity gained with pre-acquisition alliances impact post-acquisition performance.
The effect of pre-acquisition alliances on post-acquisition performance is a well-known concept, but there are different explanations from existing perspectives. On the one hand, organizational learning suggests that prior strategic alliances help the acquiring company gain new technological knowledge and skills from the target company. On the other hand, relational learning focuses on the acquiring company's understanding of the target company's working methods, culture, leadership styles, and overall organizational dynamics, which helps form psychological contracts and mutual understanding. To combine these ideas, the authors propose to investigate the role of familiarity in moderating the relationship between pre-acquisition alliances and post-acquisition performance.
Hence, the authors emphasize the significance of developing trust and familiarity with the target firm in pre-acquisition alliances to improve post-acquisition performance. Acquisition firms' knowledge of the partner's context plays a significant role in this process, facilitating learning about the partner. The authors' hypotheses are supported by evidence, indicating that cultural and market familiarity positively impact the relationship between pre-acquisition alliances and post-acquisition performance.
Please take a moment to download and read the entire paper featured in Long Range Planning.