The performance of acquisitions in a small open

the performance of acquisitions in a small open economy. From the perspective of a
local firm that is to be sold, the key questions are whether and how an acquirer will
restructure the company, and how this will contribute to the acquired company’s
competitive advantage.
Choosing the right partner is critical. However, even if an acquirer chooses wisely it
may still reduce performance by integrating the two companies together too roughly.
Industry observers have therefore identified post-acquisition integration as being
critical to long-term acquisition success (Gruca, Deepika, Mehra, 1997; Very et al.
1997; Norburn, Schoenberg, 1994; De Noble, Gustafson, Hegert, 1988). Some other
scholars (Čater, Pučko, 2010) in a study on a sample of 172 Slovenian companies
reveal that managers in Slovenia mostly rely on planning and organising activities
when implementing strategies, while the biggest obstacle to strategy execution is
poor leadership. Hambrick and Hanella (1993) added to the understanding of the
integration process by emphasising that an acquired company’s executives are placed
in a new social setting in which comparisons with their acquirers as well as with their
prior situation are inevitable. They may feel a loss of autonomy, alienation from their
new partner group, inferior in status and unappreciated by the acquiring company’s
top managers. These feelings may bring serious consequences: on one hand, some
valuable executives of the acquired company may leave the company, while, on the
other, those who choose to stay may reduce their commitment to the job. Scholars
argue that management of the buying firm should pay at least as much attention to
the human side of the acquisition as they generally give to the strategic side when
planning and managing the acquisition, acting as partners with the acquired company’s
managers rather than as ‘conquerors’ (Ashkenas et al., 1998). They found that the
removal of autonomy had an indirect effect on a merger’s performance by virtue of
its interaction with perceptions of cultural compatibility. Autonomy removal implies
a high degree of post-acquisition interaction between the merging firms. Special
importance is assigned to the cultural clash between merging companies, especially
in cases of cross-border acquisitions (Thomson, 1996; Norburn, Schoenberg, 1994).
Cultural differences can have positive or negative impacts on the acquisition’s
performance, depending on how favourably the acquired company’s executives view
the buying firm’s values and ways of conducting business (Very et al., 1997).
3. Methodology
The person or a company which acquires a share in a joint stock company’s voting
stock in Slovenia so that this stock, together with other existing securities in its
portfolio, ensures it a voting right of no less than 25%, has to submit a public take-
over bid to acquire these securities. Prior to submitting the take-over bid, the bidder

Matej Lahovnik, Vladimir Malenković • Corporate acquisition strategies and economic...
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Zb. rad. Ekon. fak. Rij. • 2011 • vol. 29 • sv. 1 • 33-50
shall announce his intention of submitting a take-over bid to the Securities and