CHAPTER 6 DISCUSSION AND IMPLICATIONS
6.9 CONCLUSION
The primary goal of this research was to understand why some firms experience a renewal in capabilities from acquisitions while other firms are either relatively unaffected by acquisition or experience a decline in capabilities as a result of acquisition. To achieve this goal, I developed a model incorporating a firm’s past use of internal development and/or acquisition for expansion to explain a firm’s ability to improve their capabilities following an acquisition. I further utilized the absorptive capacity literature to illustrate and empirically examine the influence absorptive capacity has on a firm’s ability to improve its capabilities following an acquisition and found support for the notion that absorptive capacity acts as a mediating variable between a firm’s cumulative experience and capability renewal following acquisition.
A secondary research objective was to understand why some firms strike a balance between internal development and acquisition while other firms fall into a pattern of substituting acquisitions for the development of capabilities. This research found that the impact that a focal acquisition has on a firm’s capabilities impacts the firm’s future mode of growth—acquisition and/or internal development.
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This research is important to both management theory and practice. First, this dissertation contributes to dynamic capabilities theory that suggests that a firm’s ability to reconfigure and integrate new resources into new combinations is a key to competitive advantage. Acquisition has been touted as one potential method to reconfigure and integrate resources into new combinations; however, despite the attractiveness of this theoretical assertion, a large volume of research has shown disappointing outcomes from acquisitions. This dissertation found that the role of absorptive capacity may explain divergent outcomes from acquisition.
Second, this research contributes to management theory by providing a more comprehensive understanding of the role of acquisitions in revitalizing a firm’s capabilities. Additionally, this research is important for managers because it provides insight into when they might expect a particular acquisition to lead to an improvement in the firm’s capabilities and when an acquisition may actually lead to the deterioration of the firm’s capabilities.
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