BALANCING COORDINATION AND AUTONOMY DURING POST-ACQUISITION WITHIN A HIGH-TECH FIRM

Abstract

Extant literature suggests that acquisition of innovative capability is challenging: the acquired firm must be integrated to realise synergies, but such integration might jeopardise the ability to sustain its innovative capability within the acquiring firm. However, we know little about how managers address this coordination-autonomy dilemma post-acquisition. We therefore investigated how GlobalTech, a multi-national telecommunications solutions provider integrated SmartTech, a small, innovative firm with an adaptive infrastructure management solution and a customer-driven innovation approach. Drawing on dynamic capability theory (DCT) and focusing on structural integration and informal coordination, we reveal how the two management teams collaborated over a two-year period to sustain SmartTech’s innovation capability while at the same time leveraging it as part of GlobalTech’s position and future path. In conclusion, we present a process model with related action strategies for how organisations can orchestrate dynamic capability to manage the coordination-autonomy dilemma post-acquisition.