Are newly acquired or merged companies better off under the leadership of one of their own senior directors drawn from the old regime, or does the ‘new broom’ approach associated with an outside appointment make for more successful integration? On the one hand, an ‘insider’ top executive understands the way the acquired company works and can provide continuity at a time of disruption; on the other, an ‘outsider’ can take an objective view of what needs to be done and is likely to be less wary of making radical changes.

Previous studies have signally failed to provide conclusive answers to this important question, largely because they have not differentiated between different takeover approaches. This study breaks new ground by setting the longstanding insider/outsider debate against the backdrop of four different post-acquisition integration strategies, based on two key parameters: the extent to which the acquired firm retains its own identity and culture (organisational autonomy) and the extent to which the two businesses can share resources (strategic interdependence). Using a rare combination of survey data and interviews, the authors highlight clear – though not necessarily predictable – links between the nature of the takeover and the type of top executive best placed to run the acquired business.

SPS members receive Long Range Planning six times a year (worth £120 pa).
Non-members can buy and download individual articles at Science Direct.

« Back