Strategic Alignment In Mergers And Acquisitions: Theorizing IS Integration Decision making.

Abstract

This paper focuses on IS integration decisions made during mergers and acquisitions from a strategic-alignment lens. The objectives of this study are to: (1) examine business-IS alignment as reflected in IS integration decisions in a merger context and (2) identify factors that shape IS integration decisions in a merger context. We study these issues in three oil and gas mergers from pre-merger announcement to three to four years after merger announcement. Our contributions are three-fold. We show that firms are somewhat misaligned in the early post-merger period, and come into alignment only two to three years after the merger. We find that business-IS alignment was a minor concern for the new organizations in pre-merger and early post-merger phases. Other factors such as acquirer-target power struggles, prior merger experience, and overarching synergy goals drove much of the initial integration decision making. Only late in the post-merger do the merged organizations revisit their systems to bring them into alignment with the business needs.