Stakeholder Synergies in Mergers and Acquisitions

Mergers and acquisitions (M&A) can create value by combining an acquirer’s and target’s complementary relationships with nonmarket stakeholders. We introduce two mechanisms that produce stakeholder synergies. The “reset effect” occurs when a firm with cooperative stakeholder relationships merges with a firm that has conflictual relationships, potentially creating a fresh start that enables the combined firm to satisfy its stakeholders more efficiently and with less conflict. The “recombination effect” occurs when merging firms bring cooperative stakeholder relationships involving distinct issues, allowing the combined firm to serve a wider range of stakeholder interests more efficiently. We corroborate the conditions under which both synergies materialize through a difference-in-differences analysis of cooperative and conflictual relationships of Fortune 500 firms with environmental movement organizations before and after M&A events.

Bio

Kate Odziemkowska is an Assistant Professor of Strategic Management at the Rotman School of Management, University of Toronto. Her research focuses on cooperative strategy—formal interorganizational relationships such as alliances or collaborations—in nonmarket settings. She studies how and when strategically aligning with often-adversarial stakeholders, such as social activists, NGOs, and local communities can benefit firms, and the implications for stakeholders and society. Her research explains why cooperative strategy is an increasingly popular approach to managing nonmarket stakeholders, when and why existing theories of interorganizational relationships fail in nonmarket settings, and the critical role conflict and networks play in cooperative nonmarket strategy. Newer projects explore how cooperative and conflictual stakeholder relationships affect firm innovation, returns to M&A, and political strategies. Her research has been published in Administrative Science Quarterly, Organization Science, and the Strategic Management Journal. She received her Ph.D. in Management from Wharton.

As always, we are offering 1:1 sessions to meet with our speaker. Furthermore, we will be taking Kate for dinner after her seminar. The sign-up for the 1:1 sessions and the dinner can be found here.