Learning to carry out multiple acquisitions

The ability to carry out multiple acquisitions is an important source of competitive advantage for firms. However, developing this ability is challenging due to the complexity of learning processes. Although prior research has devoted a considerable amount of attention to the topic, significant gaps remain. We still know little about (1) which kinds of multiple acquisitions strategies firms employ (2) how firms can ensure learning from earlier acquisition experience, and (3) how firms can learn faster than their competitors. This dissertation aims to fill these gaps through three essays. The first essay addresses the first gap. Earlier studies have reported that different companies are prone to selecting similar acquisition strategies when entering a certain country/industry. The same environmental conditions are assumed to cause convergence of acquisition behavior. In contrast, I found that the studied companies used different acquisition strategies in the same country and the same industry. Their strategies differed among four dimensions. Central for success is the ability to design an acquisition strategy that fits both the current conditions in the environment and the firm's acquisition capabilities and resources. The second essay addresses how individuals and firms learn to modify their acquisition strategy so that it is in accord with the new conditions of the focal acquisition. There were three main findings. First, when an acquisition is carried out under new conditions, such as with a different kind of target or different country culture, outcomes tend to improve only if managers have constructed causal mental models that explain why and how elements in the focal system influence one another instead of only mere instructions that simply describe action steps in prescribed order (strip mental models). Second, deep-reflection, characterized by a focus on micro-level causal chains, contextualization, and a multi-agent perspective, leads to the development of causal models while surface reflection results in strip models. Third, even if an individual has reflected on experience in a deep way, he or she may store and communicate non causal knowledge. Communication and storing of non causal knowledge hinders performance acquisitions in new contexts. These findings were inductively developed from 65 interviews, 3,300 pages of archival material, and meeting observations in five serial acquirers. In the third essay, I further deepen our understanding of learning processes. I argue that as long as there are no changes in environment, the use of non-causal decision rules (strip mental models and some types of heuristics) allows more rapid improvement in performance than the use of causal decision rules (causal mental models and causal knowledge). As time goes on and environmental changes eventually occur, only causal knowledge provides the basis for success