The effects of procedural and informational justice in the integration of related acquisitions
This study explores the independent and interactive effects of procedural justice and informational justice on post-deal value creation in large, related acquisitions. Our results show that informational justice and procedural justice affect different components of value creation. Procedural justice is critical in realizing market position improvements following the integration process, while informational justice is essential in achieving market position gains during integration and financial return gains both during and post-integration. Indicating that the interrelationships between different justice dimensions may be more complex than previously thought, we find that procedural justice reduces the positive effects of informational justice on financial return during the integration process, while it magnifies the effects of informational justice on the combined firms' market position during integration efforts. We explore the implications of these results for future research on the acquisition integration process and for practicing managers engaging in large, related acquisitions.
|Keywords||Financial returns, Integration, Integration process, Interactive effects, Market positions, Mergers and acquisitions, Positive effects, Post integrations, Procedural and informational justice, Procedural justices, Related acquisitions, Value creations|
|Persistent URL||dx.doi.org/10.1002/smj.728, hdl.handle.net/1765/18502|
|Series||ERIM Top-Core Articles|
|Journal||Strategic Management Journal|
Ellis, K.M, Reus, T.H, & Lamont, B.T. (2009). The effects of procedural and informational justice in the integration of related acquisitions. Strategic Management Journal, 30(2), 137–161. doi:10.1002/smj.728