Losing innovativeness: the challenge of being acquired

Abstract

PurposeThe aim of the paper is to explore how innovativeness and creativity in a small technology company changes after the company is acquired by a larger company.Design/methodology/approachThe empirical part of the article is based on interview and questionnaire data, with a focus on employees' perception of innovativeness and creativity, including their own innovativeness in relation to the possibilities offered within the organisational structure.FindingsThe results indicate that entrepreneurial spirit, innovativeness, and creativity in the case company were related to the lack of boundaries to and contact with customers. These driving forces could not be sustained when the organisation matured and was acquired by a larger company.Research limitations/implicationsMore research regarding the integration phase of acquisitions, and how it affects employees and innovativeness, is needed. Case‐based research should examine differences between companies that are repeatedly successful in integrating small technology companies into their organisational structure and those that are not. Employees' motivation as a key factor to innovativeness should be in focus and the research should also include employees that leave the acquired company as well as employees with the acquiring company.Practical implicationsAn acquisition strategy as a way for mature organisations to gain access to innovativeness and new resources and skills can easily fail. Even though the resources and skills of the two companies are complementary and the competencies of the acquired organisation are intact, efforts are needed to make the energies of the two organisations act in tandem. Thus, the pre‐ and post‐integration phases of an acquisition seem to be of paramount importance.Originality/valueVery few papers have studied how employees in an acquired company perceive incorporation into a large mature company. This article adds to research by examining how employees in a small, entrepreneurial company perceive innovation, creativity, and the innovative process three years after being acquired by a large, mature company.