Reducing Causal Ambuguity in Acquisition Integration

Integration is a difficult process, but one that is vital to acquisition performance. One reason acquirers encounter difficulties is that the integration process exhibits high levels of intrafirm linkage ambiguity—a lack of clarity in the causal link between integration decisions and their performance outcomes. We introduce the construct of intermediate goals as a mechanism that reduces intrafirm linkage ambiguity. Our structural model results, based on a sample of 129 horizontal acquisitions, indicate that the achievement of two intermediate goals (internal reorganization and market expansion) fully mediates the relationships between four integration decisions and acquisition performance.