The transfer of resources as a mediating factor between leadership and perceived post-acquisition performance

Abstract

The complexities associated with integrating acquired companies contributes to an ongoing trend of acquisitions failing to meet shareholder expectations. Leadership is at the forefront of driving the acquisition integration process and this study investigated the role that leadership plays in improving post-acquisition performance. A review of the literature drew a comparison between the complexity associated with the acquisition integration environment, and the characteristics of contextual leadership and authentic leadership styles. It was proposed that leaders are able to enhance post-acquisition success by promoting the transfer of resources between acquired and acquiring companies. Data was collected from leaders who have been exposed to an acquisition integration process and a quantitative method was followed to test the hypotheses. Regression analysis was used to investigate direct relationships, and the indirect effect of leadership on performance through resource transfer was tested through bootstrapping. The results showed that contextual leadership and authentic leadership have no relationship with post-acquisition performance. The mediating relationship was also found to not be significant. The transfer of administrative, operational, and functional resources, as well as innovation capabilities was shown to have an impact on performance. Practically, this can be used by leaders to develop and implement pre-acquisition and post-acquisition strategy.