PhD Defence Johannes Drees

Drees, JohannesJOHANNES DREES
Strategy & Organisation
 
Dissertation Title 
The Polycentricity of Expansion Strategies: Beyond Performance as a Main Driver

Date & Location
30 October 2013 @ 15.45 in the Aula of the Main Building of the VU University Amsterdam 

Promoters 
prof. dr. T. Elfring and dr. ir. P.W.L. Vlaar

 

The Polycentricity of Expansion Strategies: Beyond Performance as a Main Driver

Abstract

Johannes DreesOrganizations undertake alliances, joint ventures (JVs), and mergers and acquisitions (M&As) to expand, overcome dependencies, and improve their autonomy, legitimacy, and performance. In this dissertation, a polycentric perspective is applied to investigate the origins and performance of alliances, JVs, and M&As. The results suggest that resource dependence theory is one of the primary explanations of the prevalence of the forenamed expansion strategies. In terms of performance, we find that the effect of less invasive arrangements, such as alliances, is more positive in the short-term, whereas the effect of M&As often manifests itself in the long run, through first enhancing an organization’s autonomy and legitimacy and then its accounting-based returns. Moreover, organizations have responded to antitrust legislation by forming more alliances and JVs, whereas such legislation is detrimental to the formation and performance of M&As. Additionally, organizations base their decisions to form alliances or JVs or to pursue M&As on the experience they have obtained from previous similar arrangements. Last, a micro-level perspective is used to examine how advisors interact with decision makers to propel their deal-driven orientation, their desire to acquire, while preserving their ignorance and even promoting information asymmetries. Through this the dual role of advisors is exposed, as they seem to simultaneously generate and escalate momentum. In sum, the findings suggest that a combination of environmental, contextual, organizational, and interpersonal factors explain the origins and success of expansion strategies. In particular, these factors seem to be more interrelated than has been previously noted in studies that assess how organizations can maintain their performance. Therefore, several macro- and micro-level factors explain the origins and performance of expansion strategies.

Table: Overview of included studies

StudyResearch Problem/QuestionContribution by
1. Synthesizing and extending resource dependence theory: A meta-analysisNumerous conceptual and empirical challenges emphasize the need to synthesize RDT through a meta-analysis.- Assessing whether RDT’s main predictions make sense.
- Testing whether the mechanisms linking arrangement formation to organizational autonomy and legitimacy differ across arrangements.
- Exploring whether the explanatory power of RDT is affected by competition law.  
2. Drivers of expansion strategies: Autonomy versus performanceHow do organizations make a tradeoff between overcoming dependencies and improving their autonomy versus enhancing their performance when choosing between different vertical and horizontal expansion strategies?’- Extending Pfeffer and Salancik’s (1978) model of RDT by distinguishing between vertical and horizontal arrangements.
- Adding performance as a consequence of arrangement formation.
- Assessing the effects of several organizational characteristics and their influence on arrangement formation and performance.
3. (Dis)aggregating alliance, joint venture, and merger and acquisition performance: A meta- analysisThere is substantial variation in the findings regarding the relationship between expansion strategies and performance. This variation can be explained by the type of performance assessed, the direction and institutional context of the arrangement, and the research design used.- Comparing the effects that arrangements may have on specific types of performance, such as abnormal returns, return on assets, sales, and symbolic performance.
- Exploring the potential effects of the direction and institutional context of an arrangement on its performance.
- Examining the variation in the performance of expansion strategi for different research designs and outlets.
- Developing an evidence-based research agenda for future research on expansion strategies.
4. Unpacking acquisition behavior: How advisors propel decision makers deal-driven orientation.‘How does the interaction between decision makers and advisors influence acquisition behavior, and how does this affect acquisition outcomes?’- Responding to the calls for more research examining acquisition behavior (e.g., Haleblian et al. 2009).
- Exploring the interaction between advisors and decision makers and its effects on a firm’s acquisition behavior.
- Relating the decisions made during the preacquisition process to their outcomes in the postacquisition phase.