Who's acquiring whom? - Experimental evidence of firm size effect on B2B mergers and marketing/sales tasks

A recent study has revealed a marked growth in global mergers and acquisitions between firms from developed and developing countries. Unlike previous merger waves, however, companies in emerging markets are playing an increasingly important role. This highlights the need for greater scrutiny of more, and diverse, aspects of mergers. In particular, the size difference between firms involved in mergers and its impact on merger outcomes are of interest. This paper examines whether the involvement of differing numbers of employees (either from the acquiring firm or from the acquired firm) may influence merger success. Drawing on previous work in understanding organizational culture and merger dynamics, we conduct a laboratory experiment that not only confirms the presence of learning and conflict in organizational cultures in mergers but also presents new findings in relation to the relative size of the firms involved.