The findings are presented below and are substantiated by relevant supporting literature. Emphasis is placed on those instances where studies provide support for or contradict certain findings. The discussion is presented according to each objective, and according to the relevant themes and categories that emerged during the data analysis process.
7.4.1 Summary of the key characteristics of subsidiary entrepreneurial culture in a post-acquisition environment
It was found that eight of the nine suggested characteristics of subsidiary entrepreneurial culture proved to be important. These were (i) new businesses/ventures; (ii) product innovativeness; (iii) process innovativeness; (iv) self- renewal, (v) risk-taking; (vi) proactiveness; (vii) competitive aggressiveness; (viii) subsidiary entrepreneurial network management; and (ix) subsidiary autonomy. Subsidiary entrepreneurial network management however, proved to be a less important element for the subsidiaries. The nine themes are presented below.
7.4.1.1 Entrepreneurial organisation
The most prevalent theme that emerged when asking interviewees about their entrepreneurial status since being acquired by Libstar was autonomy. All of the subsidiaries confirmed that their businesses continue to be run as independent entities and that business is conducted in much the same way as it was prior to the acquisition. The core cultures of the companies have not changed. Due to the fact that the levels of autonomy and decision-making authority have remained high, entrepreneurs continue to be responsible for the entrepreneurial culture present inside their organisations. This finding is in line with the ‘subsidiary choice perspective’ discussed in section 4.4 of chapter 4, which suggests that the role of the subsidiary should be predominantly decided upon by subsidiary management (Birkinshaw, 1995; Roth & Morrison, 1992).
7.4.1.2 New businesses/ventures
It was found that most subsidiaries actively search for new business opportunities both internally and externally. This active search for new businesses and ventures ties in with the literature presented on new businesses/ventures in section 2.10.1 of chapter 2. This literature highlights the importance of entering into new markets by suggesting that it be done through the expansion of internal businesses (Zahra, 1991) and external ventures (Hisrich & Peters, 1984; MacMillan et al., 1984; Vesper, 1984; Guth & Ginsberg, 1990; Sharma & Chrisman, 1999). This pursuit of opportunities was highlighted as an avenue for growth and as a way to protect market share and increase profitability.
7.4.1.3 Product innovativeness
The data found in relation to the theme of product innovativeness displayed a positive relationship between the frequency with which product ranges were reviewed and the implementation rate of new ideas and products. This relationship is supported by the findings suggested in section 2.10.2 in chapter 2, which indicates that product innovativeness is key to sustaining a company’s entrepreneurial culture (Schollhammer, 1982).
7.4.1.4 Process innovativeness
Process innovativeness was exhibited by the subsidiaries in terms of the specialisation of existing business processes and the purchasing of new plants and machinery and the expansion of existing facilities. These findings were complemented by the literature presented on process innovativeness in section 2.10.2 of chapter 2, which highlights the relevance of advancements in products and production methods and the significance of innovation and technology (Schollhammer, 1982; Zahra, 1993).
7.4.1.5 Self-renewal
The empirical results revealed that most interviewees find strategic reformulation and reorganisation important for their subsidiaries in order to ensure growth and keep up with change. The literature on self-renewal presented in section 2.10.5 of chapter 2 supports these findings by confirming that continuous renewal and flexibility are
essential elements of a successful entrepreneurial company (Muzyka et al., 1995; Stopford & Baden-Fuller, 1994).
7.4.1.6 Risk-taking
Most respondents revealed that their decision-making processes are bold, but have become more calculated since being acquired by Libstar. Calculated decisions refer to those decisions that are bold, but involve continuous evaluation of the risks involved. The literature presented on risk-taking in section 2.10.4 of chapter 2 supports active levels of risk-taking behaviour in entrepreneurial organisation (Lumpkin & Dess, 1997; Lumpkin, 1998; Stopford & Baden-Fuller, 1994).
7.4.1.7 Proactiveness
The empirical results showed that subsidiaries anticipate future opportunities through actions such as investing in potential business opportunities, investigative business travel and by tracking new trends in the marketplace. This displayed a positive relationship with the literature presented on proactiveness in section 2.10.5 of chapter 2, which argues that companies should continually look to pursue new business prospects and venture into unknown markets (Lumpkin & Dess, 1996).
7.4.1.8 Competitive aggressiveness
A number of direct and proactive actions were revealed when assessing the level of competitive aggressiveness that exists within each subsidiary. These actions included travel, networking and tracking trends, as well as ensuring that large investments are being made and value is being added to products in order to maintain competitive advantage in the market. The respondents’ answers display a positive relationship with the literature presented on competitive aggressiveness in section 2.10.6 of chapter 2, where Covin and Slevin (1991) support these competitive behaviours.
7.4.1.9 Subsidiary entrepreneurial network management
The amount of interaction and communication between the subsidiaries contradicted the literature presented in chapter 4 of this study. It was revealed that most respondents find subsidiary entrepreneurial network management to be a beneficial charactertistic of subsidiary entrepreneurship, but not an essential one. Subsidiaries
did not find this characteristic to be of much importance to the success of their entrepreneurial culture in a post-acquisition environment, and although Libstar encourages interaction amongst the group, they do not enforce it. The literature on subsidiary entrepreneurial network management from section 4.8.2.1 of chapter 4 suggests that communication and knowledge sharing should be encouraged and maintained within an interorganisational network (Ghoshal & Bartlett, 1990).
7.4.1.10 Subsidiary autonomy
Most of the respondents said that their entrepreneurial culture is subsidiary-driven. The high levels of subsidiary autonomy that exist amongst Libstar’s subsidiaries agreed with the literature presented on subsidiary autonomy in section 4.8.2.2 of chapter 4. This literature maintains that subsidiaries should be predominantly autonomous and should only receive guidance and strategic assistance from the parent company when required (Birkinshaw & Morrison, 1995; Martinez & Jarillo 1991).
7.4.2 Subsidiary entrepreneurial locus of control in a post-acquisition environment
A positive relationship was revealed between the answers given by the respondents regarding the entrepreneurial locus of control that exists within their subsidiaries and the literature on subsidiary-driven locus of control presented in section 5.2. 8 of chapter 5, which states that the subsidiary is largely autonomous and maintains strategic control of its ventures. Assistance and strategic support from the parent company is sought when required (Boojihawon et al., 2007). Seven of the ten respondents believe that their entrepreneurial locus of control is subsidiary-driven, and the remaining respondents believe that their locus of control is jointly-driven. According to Boojihawon et al. (2007), this locus of control indicates that there is a shared coordination and control of strategic ventures, and that there is a central control of creative work and expertise.
7.4.3 The influence of the acquisition on each subsidiary
The most prominent influence that the acquisition has had on each subsidiary has been in terms of the financial stability, structure, and encouragement towards adopting a future-oriented approach to business with which Libstar has provided
them. These elements have made possible the necessary growth and expansion which subsidiaries otherwise might not have been able to achieve. These empirical results show a positive relationship with the literature presented on the perspective of headquarter assignment in section 4.4 of chapter 4. This perspective suggests that the headquarters should use control and coordination mechanisms to direct and support the behaviour and actions of subsidiary managers where necessary (Birkinshaw & Morrison, 1996; Ghoshal, 1986; Gupta & Govindarajan, 1994; Roth & Morrison, 1992).
7.4.4 Framework of characteristics of subsidiary entrepreneurial culture in a post-acquisition environment
After the above objectives were satisfied, a framework for subsidiary entrepreneurial culture in a post-acquisition environment was developed based on the relevant findings. This framework highlights the key entrepreneurial characteristics that should be present in a subsidiary in a post-acquisition environment, the preferred entrepreneurial locus of control, and the support needed from the headquarters in order to encourage subsidiary growth and development.
The framework offers managers the potential to shape and influence subsidiary entrepreneurship once an acquisition has taken place in order to ensure a smooth and successful acquisition process and to maximise the long-term growth potential and profitability of the business transaction.