Study On M&A Direction For Multi-business Enterprise Groups

Nowadays,the pressure resulting from globalization in the world economy,and the inherent requirement for development are making M&A the most important way to choose for enterprise groups in our country.The reality calls for the need to study how to implement M&A successfully,and accordingly M&A direction is one of the key problems to be answered.Thus,this paper focuses on M&A of enterprise groups,a special economic organization,and mainly discusses the relevant issues of decision-making on M&A direction.Based on a detailed review of the main ideas of resource-based view(RBV),the paper puts forward a category system of firm resources,which is more adaptable for research of M&A activities,and further analyzes the priority of each resource on M&A direction in different situations,in consideration of resources' unique traits.In addition, the paper complements the traditional RBV with another resource perspective,the relational view,which puts a great emphasis on inter-organizational relationships.Then the paper describes the characteristics of groups' resource network system and confirms that the objective of groups' decision is to optimize the resource network system to the greatest extent.Finally the paper generalizes the flow of decision-making on M&A direction for enterprise groups,and then applies it to a detailed case study.The paper makes several useful explorations and experimentations,which are listed as below.(1)The paper introduces into resources,and integrates industrial relatedness selecting,locating,and timing into a complete analyzing framework.This paper introduces into resources when making strategic decision,discussing where M&A should head and when to start.This study can help solving the problem resulted from separating both business-level and corporate-level strategy,and strategic direction and method for development.The paper makes a progress in extending and integrating previous study results. For example,it emphasizes on resource relatedness when selecing business,and is more concerned about key success factors.And when it comes down to location selection,the paper also discusses cross-province M&A.In a word,decision on M&A direction of enterprise groups should be established in the current status of firm resources,seeking the superior fit between resources and the industry,location and timing being chosen. (2)Based on the relational view of network,the paper takes enterprise groups as resource network systems,and applies analytical method of social network to desribe the change of groups' resource network.As enterprise groups evolve towards network structure,their internal corporate members depend on each other and shape an interrelational network.In the network system,corporate member is a heterogenous node,and the relationships between different nodes are resource connections.The resource attached to this cooperation network is also a source of competitive advantage,and should be put great attention.Resource network has the characteristics of openness,relatedness and integrity, which make it possible for us to apply network perspective in analyzing resource network of groups.Thus,the paper analogizes social network to resource network, viewing each business as the node of the network,while interorganizational relationship as the side of the network.Furthermore,the paper applies software UCINET in describing the connectedness,distance,intensity of relationships,and sub-groups of group's network,and also in measuring the effects of M&A on the network,such as whether and to what extent M&A optimize the network.The final decision of M&A direction is made according to the comparison of respective effects being measured.(3)Analyzing the priority of each category of resources on the M&A direction.Previous studies have defined four kinds of resource relationships,including substituting,complementary,enhancing and suppressing relationship,which provides great inspiration to this study.Taking for consideration of the trait of each category of resources,the paper analyzes the priority of resources on M&A direction in conditions of resource scarcity and excess,in order to realize effective substitution, complementation,and enhacement and to avoid confict as much as possible.(4)Generalizing a feasible flow of decision-making on M&A direction.Regarding the conceptual framework of M&A direction,and based on the application of combining theoretical foundation,the paper puts forward the flow of decision-making and makes a detailed case study to verify the feasibility of the flow.