Evolución de la matrícula
SOCIAL SCIENCE
M&As in China started with the economic reforms in 1978, and there have been three movements of M&As since then. The first M&As featured exploratory small scale, government intervened transactions among SOEs with the aim of eliminating companies with significant financial losses (Yang, 2005; Huang, et al., 2008; Zhang, 2010). The second movement began in the 1990s which featured share owners purchase of public companies through stock market transactions or purchase agreements (Yang, 2005; Huang, et al., 2008).
During the 1990s, as impacted by cross border M&As in western countries, western companies began targeting Chinese owned companies. At the same time, a few Chinese companies started to
47
merge and acquire foreign companies in other countries (Huang, et al., 2008). However, cross border M&As by foreign companies into China did not significantly impact on China until 2002- 2003 when the Chinese government announced formal legislation dealing with foreign companies’ M&As activities with Chinese local companies (Norton & Chao, 2001; Huang, et al., 2008). Since the 2000s, China has been in its third movement of M&As featuring cross border M&As both by Chinese companies merging or acquiring foreign companies in other countries and foreign companies merging or acquiring Chinese companies (Huang, et al., 2008; Li & Li, 2010). The number of cross border M&As by foreign companies in China increased significantly from 2003 and collectively reached a value of 100 Billion USD by 2007 (Zhang, 2007). Cross border M&A has become an important approach for foreign companies to gain access to China markets and to improve their strategic positioning in the global market (Zai & Zheng, 2007; Zhang & Lai, 2007; Huang, et al., 2008; Hu, 2010). Although cross border M&As in China are viewed as benefitting China’s economic development through the increase of foreign direct investment and transfer of the advanced technology from overseas (Li, 2007), both Zai and Zheng (2007) and Hu (2010) argue that foreign company acquisitions of Chinese local leading SOEs may threaten industry security of Chinese companies due to the monopoly positioning of the foreign companies after acquisition. Therefore they advised that approval of foreign acquisitions in China should be strictly managed by the Chinese government (Zai & Zheng, 2007; Hu, 2010).
In China, Chinese scholars have done some studies on various aspects of M&As in China since the early 2000s, for example, the Mergers & Acquisitions Forum 2007 (Zhang & Cui, 2007) and Mergers & Acquisitions Forum 2009 (Li, Chen, Zhang, & Xin, 2010) collected many research papers. Funded by the Chinese government, some books on M&As were published with the aim of providing information to enterprises, governments and academics on M&A issues such as development history, theories, processes, and frameworks for integration and implementation. For example, Yang (2005) published a book on integration studies of M&As, Luo (2005) reviewed the characteristics of cross border M&As and the coping strategy; Zhu (2006) discussed finance and investment perspectives of M&As; Huang, et al., (2008) reviewed the principles and practices of M&As; and Zhang (2010) published the first textbook on a framework for M&As to graduate school students in China.
48
In China, Chinese scholars’ studies on M&As since the 2000s can be summarised into four groups based on common characteristics in the literature. Firstly, most of the studies so far are general studies without specific research targets. When there are specific research targets, the focus is on Chinese public companies, especially SOEs, while studies on POEs (both public and non-publicly listed) are very limited, especially non-publicly listed POEs. POEs as a new additional ownership type of firm emerged since China’s economic transition from Planned Economy to a more market driven economy (Zhu & Dowling, 1994; Child, 1995; Wong & Lee, 2001). Huang, et al., (2008) noted that by mid 2000s, POEs started to play increasingly important roles in M&As especially cross border M&As both in China and outside China.
Although, since 2003, both SOEs and POEs became important targets for cross border M&As by foreign companies (Woodard & Wang, 2004; Fu & Ying, 2005), there are differences in how the companies are managed between these two ownership types (Child, 1995; Warner, 1996; Wong & Lee, 2001). SOE was the only ownership type during China’s Planned Economic model from 1949 to 1978 (Child, 1995; Wong & Lee, 2001) with all resources allocated by the government, including raw materials, human resources as well as production quotas (Child, 1995; Warner, 1996). The number of POEs has grown significantly since 1978 and POEs started to play a more important role in national economic development (Ahlstrom, Bruton, & Liu, 2000; Brandt & Zhu, 2000; Yueh, 2004). The owners of POEs are able to run their businesses without government intervention, including resource allocation, appointment of senior leaders, hiring of employees, compensation and benefit and performance evaluation (Ahlstrom, et al., 2000; Brandt & Zhu, 2000; Yueh, 2004). The operating differences between SOEs and POEs suggest that the findings of studies on M&As involving SOEs cannot be applied to POEs, and POEs deserve more focus in research given its increasing importance in cross border M&As.
Secondly, the M&A studies are primarily from financial, economic, industry security and policy
perspectives (Yang, 2005). For example, the studies related to these aspects include learning from M&A theories in the western countries (Ma, 2007); theoretical modelling on finance capabilities forecast of the M&As (Zhou & Yan, 2007; Liu, Xue, & Lv, 2010); industry restructuring through M&As (Zhang & Lai, 2007); and government policies (Zai & Zheng, 2007). Studies on the people and culture perspectives of the M&As are limited. For example, Yang (2005) is the first Chinese
49
scholar who suggests that human resources integration plays a critical role in M&As’ success based on a review of past studies. After Yang (2005), there are a few studies on human resource integration in M&As (Shi & Liang, 2007; Xu, Yan, & Wu, 2007). For the rest of the few studies on people and culture perspectives of the M&As, the foci are the violation of the psychological contract during M&As (Liu, 2007; Zhang & Tang, 2007; Yan, 2012; Yan & Zhu, 2013), an exploratory study on culture integration during an M&A (Li & Ou, 2007; Liu, 2007), and entrepreneurs’ behaviour in managing M&As (Wu, 2008).
Thirdly, for the limited studies on people and culture issues of M&As, the primary research
methods are secondary data from historical literature reviews (Li & Ou, 2007; Liu, 2007; Wu, 2008) with no empirical studies. Case study as a research method is used in a few studies, for example Wu (2008) provides a summary of what was done by the senior leaders in organisational culture integration between mergers of two local Chinese POE companies in one city. However, there is no in-depth data collection with all levels of the employees within Wu’s case study (2008) to understand the effectiveness of the culture integration activities from the perspective of employees. So far, there has been no triangulation of research methods to integrate quantitative and qualitative methods in one case study for in-depth understanding of the people issues in M&As in China.
Finally, among all the studies on people issues in M&As by Chinese scholars, there are only a few studies about people issues in the context of cross border M&As (Luo, 2005; Li & Ou, 2007; Xu & Yan, 2007) and among the few studies, most are about Chinese companies merging with or acquiring foreign companies overseas, for example Li and Ou (2007) and Xu and Yan (2007). Most of these have examined only one people issue such as the influence of company culture in M&A integration (Li & Ou, 2007). There have been no studies by Chinese scholars taking a more holistic look at people issues in foreign companies’ acquisition of local Chinese companies for example cross culture issues, communications, stress, resistance and trust. However, foreign companies’ acquisition of Chinese companies into China has an important role in China’s economic development and has a longer history than the Chinese companies’ acquisition of foreign companies outside China.
50
Besides the abovementioned studies by Chinese domestic scholars on people issues in cross border M&As, there is a recent study by a joint effort between overseas Chinese scholars and western scholars on the effective leadership styles of senior leaders seeking to retain high performing middle managers during an M&A integration in China (Zhang, Ahammad, Tarba, Cooper, Glaister & Wang, 2015). This study examined an acquisition of a Chinese privately-owned medium sized manufacturing company by the Chinese subsidiary of a European company. In this case study, in total nine Chinese executive leaders and high performing middle managers from both the acquiring and acquired were interviewed. This acquisition is not a ‘typical’ cross border M&A given the acquiring firm is the China subsidiary of a European company and managed by Chinese leaders. Further the sample size was limited to the small number of Chinese executives and middle managers without broader testing of the findings. Furthermore, several other overseas Chinese scholars also published some studies about M&As in China, for example Cooke (2006) discussed the implications on human resources management when multinational companies acquired the Chinese SOE companies, and Cooke and Huang (2011) discussed culture impact on the changes of appraisal and rewards system post-acquisition when Chinese privately-owned IT companies were acquired by U.S. corporations.
In summary, the review of studies by both Chinese domestic scholars and overseas Chinese scholars on M&As in China reveals that so far, there have been limited studies about foreign companies’ acquisition of local Chinese POEs and there have been no studies adopting triangulation research methods to integrate qualitative interviews, quantitative analysis and case study approach to gain in-depth understanding of the people aspects of the foreign companies’ acquisition of local Chinese POE companies. This study aims to close this gap.
To effectively conduct this study, it is important to draw learning from past research on people issues in M&As in western countries given the comparatively shorter history of M&As in China. The literature reviewed in this following section includes past findings on major people issues in M&As, especially cross border M&As in western countries, starting from the role of people issues in influencing the outcome of M&A’s.
51