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Impact of Information Technology Infrastructure Flexibility on Mergers and Acquisitions1

Jose Benitez^1,2; Gautam Ray³; Jörg Henseler^4,5

¹ Rennes School of Business, Rennes, France, [email protected] · ² School of Human Resource Management, School of Business, University of Granada, Granada, Spain, [email protected] · ³ Information and Decision Sciences, Carlson School of Management, University of Minnesota, Minneapolis, MN 55455 U.S.A. · ⁴ Faculty of Engineering Technology, University of Twente, Enschede, The Netherlands · ⁵ Nova Information Management School, Universidade Nova de Lisboa, Lisbon, Portugal

Although mergers and acquisitions (M&A) are a common strategy to reduce costs and pursue growth, the variance in returns from M&A is very high. This research examines how information technology (IT) infrastructure flexibility affects M&A. We use a combination of secondary as well as matched-pair survey data from 100 midsize firms in Spain to investigate this relationship. The empirical analysis suggests that IT infrastructure flexibility affects M&A through two key pathways: (1) a flexible IT infrastructure facilitates the development of business flexibility that provides the responsiveness to seize M&A opportunities and make acquisitions, and (2) a flexible IT infrastructure facilitates the development of post-M&A IT integration capability that provides the control to integrate the IT and business resources of the acquired firm and realize the economic benefits from M&A.

DOI

10.25300/misq/2018/13245

Volume

42 (1)

Pages

25-43

Language

en

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BibTeX

Sources

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