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Title: Cross-border mergers and acquisitions in Korea : strategic motivations, transition management and competitiveness
Author: Kang, Ji Woong
Awarding Body: University of London
Current Institution: Royal Holloway, University of London
Date of Award: 2012
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The surge in the cross-border acquisition of Korean businesses, following the 1997 Asian crisis, raises questions about the motivations of foreign investors, the calculations of selling firms, and outcomes. However, existing studies are limited in number and depth of analysis. Established FDI theory and the fire-sale/neoclassical debate do not consider how post-acquisition developments in strategy, resources, and capabilities within the target businesses and other relevant factors contributed to organisational improvements and enhanced financial performance. Recognising the methodological limitations of previous studies, this thesis employs a multiple case-study approach based on qualitative interviews and quantitative accounting data to deal with unanswered questions and to substantiate what is so often assumed. Contrary to perceptions in Korea, foreign acquirers were not motivated by financial opportunism and 'fire-sales'. Instead, with strategic motivations, they sought businesses with resources and capabilities that could make their objectives achievable, and they invested in and developed new resources and capabilities. For chaebols, government pressure to reform and lack of liquidity were motivators, but we cannot overlook their agency and success in achieving their own strategic intentions, necessitating asset sales. Nor should we overlook the contribution of managers to post-acquisition improvements. These successes, measured by financial performance, depended on the effective managerial, organisational, and operational transformation of the acquired finn, and external factors, such as host market competitive pressures and expansion opportunities. Transformation rested on the quality of 'transition management', whose nature and outcomes were affected by the interaction of si-x factors, including: (a) the quality of the acquirer'S resources and capabilities in relation to the target business; (b) the acquirer's motivations and strategy; (c) the quality and potential of the target firm's resources and capabilities; (d) external factors, such as host market competitive pressures, expansion opportunities, and macroeconomic conditions; ( e) the acquirer's international acquisition expertise and integration strategy; and (f) the level of the local employees' agency. Financial outcomes varied, due to explicable internal and external factors, but case evidence indicates that the acquisition brought substantial financial benefits to many target firms. This thesis, therefore, questions the unsubstantiated, widely-held view that the impact of the mergers and acquisitions wave in Korea after 1997 has been consistently negative for the target firms.
Supervisor: Not available Sponsor: Not available
Qualification Name: Thesis (Ph.D.) Qualification Level: Doctoral
EThOS ID:  DOI: Not available