Internationalization of firms: revitalizing the board of directors after a cross-border acquisition. (10th April 2017)

• Record Type: Journal Article
• Authors: Pisano, Vincenzo; Faraci, Rosario; Cabiddu, Francesca; Picone, Pasquale Massimo
• Is Part Of: Management research. Volume 15:Number 1(2017)
• Page Start: 65
• Page End: 82
• Publication Date: 2017-04-10
• Subjects: Corporate governance -- Board of directors -- Acquisitions -- Integration manager; Management -- Periodicals; 658
• DOI: 10.1108/MRJIAM-10-2015-0614
• Languages: English
• ISSNs: 1536-5433

Abstract

Abstract : Purpose: This paper aims to show the importance of introducing an integration manager (i.e. an executive position used to channel the acquiring firm's course of action and strengthen the success of a post-acquisition integration process) within the acquiring firm's board of directors. Design/methodology/approach: This is a theoretical paper that introduces the integration manager within the board of privately held firms going internationally via acquisitions and serving as an "out-insider" director able to balance the conflicting demands of the previously separated entities during their integration process. The authors present an explanatory case study that empirically contributes to the board of directors' design for internationalization. Findings: The authors posit that the integration manager serves as an "out-insider" director of the board for privately held firms, possessed by large-block shareholders, going internationally via acquisitions, providing the necessary expertise and knowledge of the target firm's products and industry. Originality/value: The provided study aims to show that international acquisitions, even though apparently less risky than greenfield investments, may require additional neutral information flow – both within the due-diligence process and the post-acquisition integration – that only outsiders possess. Such an outsider has been individuated in the integration manager whose crucial role focuses on smoothing the pre- and post-acquisition integration processes.