Left to right: Dr. Andrea Greven (WHU – Otto Beisheim School of Management), Dr. Denise Fischer-Kreer (RWTH Aachen), Prof. Dr. David Bendig (WWU Münster, Institute for Entrepreneurship), Stefan Pöhler (RWTH Aachen) und Prof. Dr. Malte Brettel (RWTH Aachen)
Prof. Dr. David Bendig (WWU Münster, Institute for Entrepreneurship), Dr. Andrea Greven (WHU - Otto Beisheim School of Management), Dr. Denise Fischer-Kreer (RWTH Aachen University), Stefan Pöhler (RWTH Aachen University) and Prof. Dr. Malte Brettel (RWTH Aachen University) recently published their article "Boosting radical innovativeness through start-up acquisitions: the role of decision autonomy and structural integration" in the journal R&D Management (VHB JQ3: B).
Mergers and acquisitions play an essential role in strengthening the innovative capacity of established companies by allowing them to modify their resources and drive innovation. Acquiring startups, which often have cutting-edge technology and knowledge, can help acquirers increase their innovation capabilities. For this reason, acquisitions of start-ups are becoming increasingly important. However, the acquired companies often face a dilemma as they have to balance between their own autonomy and the integration into the target company.
Using extensive primary data, the authors present empirical evidence to support the hypothesis that a startup's decision-making autonomy during post-merger integration supports the acquirer's ability to innovate profoundly. If the acquired startups are structurally integrated into the acquiring firm, this further increases the positive impact of the startup's decision autonomy on the acquiring firm's ability to innovate. These results show that established companies can increase their innovation capabilities by acquiring start-ups. Optimal support for this process requires coordinated efforts on the part of M&A managers to maintain decision autonomy and ensure structural integration. Although this may seem counterintuitive, simultaneous decision-making autonomy and structural integration promises the best outcome for radical post-merger innovation. In this context, the start-up can act as an independent and powerful innovation center within the corporate structures.
The full text of the study can be viewed here.