HRM practices in strategic partnerships

In the past two decades, cross-border strategic partnerships (alliances, joint ventures, and mergers and acquisitions) activity has increased significantly in the emerging markets (Chen & Young, 2010; Gomes, Weber, Brown, & Tarba, 2011).

The growth in M&A activity, the volume of capital involved, and the popularity of mergers and acquisitions stand in sharp contrast to their high rate of failure (Cartwright & Cooper, 2000; Weber, Tarba, & Reichel, 2011).

Several studies have attempted to elucidate the performance of M&As, but a review of the literature in different research areas such as strategic management, international management, finance, and organizational behavior reveals that findings are inconsistent. For example, several comprehensive review studies that examined the most frequently used variables in recent research were not able to establish clear predictors for M&A success or failure (Haleblian, Devers, McNamara, Carpenter, & Davison, 2009). Moreover, the meta-analysis conducted by King, Dalton, Daily, and Covin (2004) found that none of the strategic and financial variables studied are significant in explaining the variance in post-acquisition performance, and suggested that future research pay more attention to non-financial variables.

Within a complex organizational context, strategic partnerships (alliances, joint ventures, and M&As) pose many challenges to both executives and researchers because handling the interface between the two or more different organizations is a multi-faceted and multi-stage process (Gomes, Angwin, Weber, & Yedidia Tarba, 2013). Executives and researchers alike face a daunting challenge in attempting to develop and accumulate specific knowledge and capabilities about the strategic partnership process management in general and HRM practices during it in particular (Cartwright & Cooper, 1990, 1995; Gomes, Angwin, Peter, & Mellahi, 2012; Schuler, Tarique, & Jackson, 2004). Despite the fact that HR has been mentioned frequently as an important factor in M&A success (Budhwar, Varma, & Katou, 2009; Nikandrou & Papalexandris, 2007), there is a dearth of theoretical and empirical studies about the interrelationship between M&A performance and HR practices applied by the acquiring firm during the integration period following an acquisition. This is particularly the case for cross-border M&As (Weber & Tarba, 2010). Interestingly, after exploring the critical differences between acquirers from various countries in the way in which HR is managed in cross-cultural conflict situations, and after examining the relationship between HR practices and post-merger performance in different countries, Weber, Rachman-Moore, and Tarba (2012) concluded that there is no clear best practice to address the conflict situation and to enhance M&A performance.

In this special issue we present a diversity of papers that are dealing with HR practices in collaborative partnerships in both emerging and developed economies.

The paper by Stokes, Liu, Smith, Leidner, Moore, and Rowland (2015) examines Sino-German collaborations and explores a number of propositions which consider how challenges grounded in economic (i.e. resources, finance), organizational (i.e. size, scope and structure) and consequent behavioral rationales (i.e. mindsets and stances) influence the advanced economy small-medium sized enterprizes (SME’s) talent management in emerging economy collaborations. Utilizing an interpretive qualitative methodology based on interviews conducted within two cases – SME and an MNC comparator case, this study shows that SME needs to employ HR practices encompassing flexibility and resilience in order to survive and progress.

Adopting a process perspective that is critical to unpacking the underlying behavioral micro-foundations of M&A and providing an in-depth review of mechanisms contributing to M&A failure, the next study by Friedman, Carmeli, Tishler, and Shimizu (2015) explores why M&As rarely reach their full potential. They contend that behavioral factors at the individual and organizational levels impede rational and effective decision-making before, during and after an acquisition, and propose that communication climate plays a vital role in promoting an effective integration and enhancing M&A performance.

The following paper by Angwin, Mellahi, Gomes, and Peter (2014) evaluates the link between communication approaches (process and content of communication) and M&A outcomes, in terms of employee commitment to merged organization strategy and M&A survival. Using data drawn from the Nigerian banking sector, different communication practices are related to M&A outcomes. These results indicate the impact of communications practices in African M&A and extend earlier findings on the importance of post-acquisition integration communication in US and European contexts, and highlight the significance of communicating throughout the whole M&A process.

Wood, Dibben, and Meira (2016) investigate knowledge transfer of HRM across strategic partnerships in the Brazilian automotive industry, and the contextual factors impacting on knowledge transfer within the supply chain. Using case study research in automotive companies and suppliers in Brazil, they show that both strategic partnerships and knowledge transfer have been affected by internal drives toward cost cutting and talent retention, and external factors such as global competition through cheap imports, legislation, taxes, and unions.

The next paper by Yahiaoui, Chebbi, and Weber (2016) presents a theoretical framework of the role of HR practices in overcoming the differences and clashes between the source and recipient of knowledge while realizing synergistic benefits during the post-merger integration process. Using an international case study they investigate the crucial yet neglected relationship in M&A between the context and process variables in the post-merger integration stage. The findings suggest a model that includes the unique characteristics of and relationship between source and recipient, knowledge integration mechanisms, and the role of HR practices during the knowledge transfer process.

The following paper by Uzelac, Bauer, Matzler, and Waschak (2015) illustrates the effects of post-merger integration speed on M&A performance and the moderating role of decision-making preferences. The findings, obtained from a survey based on 99 M&A transactions with acquirers from the German-speaking part of Europe, show that fast human integration has a positive impact on M&A performance while fast task integration has a significant negative effect, and that the effects of human and task integration speed are moderated by the decision-making style of those in charge of the transactions and of integration.

Rao-Nicholson, Khan, Akhtar, and Merchant (2016) on their part examine the impact of leadership on organizational ambidexterity and employee psychological safety (EPS) based on a sample of 105 global acquisitions of emerging market multinationals. The results show that in comparison with the transactional and laissez-faire ones, the charismatic leadership style is more significantly associated with organizational ambidexterity and EPS. The findings also suggest that transactional leadership is more positively related to ambidexterity and EPS than laissezfaire leadership, and organizational ambidexterity is directly and positively related to EPS.

Vasilaki, Tarba, Ahammad, and Glaister (2016) develop a conceptual framework that focuses on the moderating role of transformational leadership on the achievement of human integration and organizational identification in M&A integration. They contend that communication, employee involvement, teamwork, and training and development have a positive effect on employee behavior and their identification with the newly formed organization. Moreover, they suggest that transformational leadership behaviors facilitate the implementation of HRM practices in M&As, leading to positive employee behavior and employee identification in the new organization.

The study of Dao, Bauer, Strobl, Matzler, and Eulerich (2016) focuses on common ground as an informal coordination mechanism during post-merger integration, and explores whether shared knowledge and shared beliefs between acquirer and target trigger a self-coordination mechanism among employees and therefore can act as an alternative path to human integration in mature industries. Based on case study research they argue that a dynamic research approach capturing a period of one year from deal closing onwards is beneficial to better understand the integration autonomy dilemma and the necessary coordination mechanisms, and found that common ground is a double-edged sword with benefits and weaknesses (while in a the short-term common ground promotes coordination and enables efficient task integration, a sole reliance on common ground without any human integration measures and management commitment has clear disadvantages in the long term).

Malul, Shoham, and Uddin (2016) present the impact of the linguistic gender marking gap on expatriate female staffing decisions in a multinational company. Due to the nature of linguistic structures, which are embedded in ancestral culture and have a cognitive effect on speakers, the gap has two levels. They argue that the first is the gap between home and host countries’ languages, and the second is between the official and informal languages used by the headquarters and the subsidiary. Utilizing an innovative gender gap variable, the analytical model applied in this study shows that the success of expatriate staffing at managerial level depends on the linguistic gender marking gap between home and host country, and that use of organizational language in subsidiaries reduces the linguistic gender marking gap between them.

The next paper by Xing and Liu (2015) explores the sociocultural integration in M&A and HRM involvement in the acquisition state-owned enterprises (SOEs) by privately owned enterprises in China. Based on three M&A case studies and using a comparative perspective, this study research examines issues relating to firm ownership structure, party committee, leadership and value orientation to highlight the role of various factors in shaping the sociocultural integration process in M&A. The findings highlight the importance of SOEs in private Chinese firms’ M&A endeavors, and the role of leaders’ identity and HRM from a micro-foundational perspective.

The goal of this special issue has been to stimulate scholars to focus on HRM practices at individual, group, and firm level in strategic partnerships in the emerging and developed markets such as mergers and acquisitions, joint ventures, strategic alliances, headquarter-subsidiary relationships, etc.

We believe that in order to better understand the individuals’ and group reactions in the in strategic partnerships in the developed and emerging economies, there is a need to incorporate multidisciplinary, multi-level, multi-stage, multi-temporal, and cross-cultural models and analyses.

We hope the papers accepted to this special issue will stimulate research on how underlying concepts and methodologies can enhance our understanding of the international HRM practices in strategic partnerships in both developed and emerging markets.

Shlomo Y. Tarba
Birmingham Business School, The University of Birmingham, UK
Sir Cary L. Cooper
Manchester Business School, University of Manchester, UK