Target reputation and appropriability: Picking and deploying resources in acquisitions

This study explores sources of acquirer satisfaction and achievement of strategic objectives following acquisitions. We develop two sets of factors based on picking and deploying target resources that we expect will affect these outcomes, and consider how the two interact. We find that target reputation is consistently related to desirable acquisition outcomes. In particular, product quality and financial reputation positively affect satisfaction; product quality is a strong predictor of achieving market-based objectives; and management and product reputation facilitate learning. Retaining top management after the transaction is also positively related to satisfaction. We support and extend the theory of relative standing-target executives are retained to a greater degree when management reputation is strong, and this leads to better outcomes for acquirers. Other deployment effects vary depending on the outcome and the strength of the acquired resource.