ABSTRACT
This chapter addresses the following research question: what can be learnt from public sector mergers that could assist in the planning and execution of successful strategic mergers more broadly? In so doing, we have undertaken a comprehensive literature review across two sectors of the economy – health and higher education – by investigating merger dynamics involving public hospitals and universities. Earlier reviews of mergers and acquisitions in different sectors have identified several gaps of knowledge. A meta-analysis of post-acquisition performance does not provide any evidence that acquisitions have a significant effect on financial performance or guarantee long-term financial gain (King et al. 2004), and there is a need for a better understanding of the conditions or variables related to acquisitions that will influence performance. Sarala et al. (2016) point out that sociocultural factors are determinants of outcomes, but there is an incomplete understanding of the role of such factors in mergers and acquisitions. Gaps revealed through their review include the need for a theoretically grounded examination of the role of sociocultural inter-firm linkages (complementary employee skills, trust, collective teaching and cultural integration), flexibility in human resources (employee skills, behaviour and practices) and different organizational cultural differences. By addressing these gaps, Sarala et al. (2016) developed a model which could be tested empirically. There is also a need to evaluate critical success factors at different phases in the merger process (Gomes et al. 2013; Haleblian et al. 2009). Another gap in the literature relates to interdisciplinary reviews (Gomes et al. 2013); in particular, management studies could benefit by synthesizing contributions from different fields and methodologies (Haleblian et al. 2009). There is little knowledge of the antecedents of acquisitions as an example, whether the motive is profit or managerial self-interest. Haleblian et al. (2009) also encourage exploring processes which foster
effective integration, and the dynamics between the involved management teams. The gaps we address in this chapter are: (a) the rationale for merging; (b) the merger process; and (c) the tangible effects.
