Essays on the role of accounting in acquisition decision-making
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School of Business |
Doctoral thesis (article-based)
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Date
2017
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Degree programme
Language
en
Pages
61 + app. 93
Series
Aalto University publication series DOCTORAL DISSERTATIONS, 188/2017
Abstract
This dissertation investigates the role of accounting in acquisition decision-making via three essays. First essay examines the influence of accounting on trust development during the acquisition negotiation process. Essay 2 explores the interplay of formal and informal pre-decision control mechanisms and seeks to provide new insights on the interplay of various pre-decision control mechanisms at different stages of the acquisition decision-making process. Third essay seeks to specify how accounting, as a resource for sensemaking, affects the shaping of meaning construction in the context of post-acquisition integration. All essays included in the dissertation adopt a case study approach drawing on an acquisition process of two Finnish companies. The primary objective of this dissertation is to contribute to the strategic investment decision-making, acquisition negotiation and post-acquisition integration literatures with new insights on the role of accounting in acquisition decision-making. All three essays included in this dissertation provide evidence that accounting has a different role for different actors at different times of ex-ante and ex-post acquisition decision-making. Accounting operates as a trust-building mechanism during the negotiation phase, serving as a substitute for personal-based trust and enabling acquisition negotiators to show commitment to the acquisition (Essay 1). It also operates as a communication tool during the evaluation and selection phases in the interplay of financial analysis, strategic analysis and managerial judgment (Essay 2). Additionally, this study theorizes that accounting reduces buyers' ex-ante complexity, so that even a complex transaction can be legitimized within a very limited pre-acquisition timeframe, or shape ex-post complexity into a plausible form (Essay 3). The dissertation further indicates that rather than being an isolated phenomenon, accounting operated at the core of forming and reforming organizational life during acquisition negotiation (Essay 1) and ex-ante and ex-post acquisition decision-making (Essay 3). These findings suggest that accounting assists in molding subjective considerations, contributing to the emerging research on strategic investment decision-making.Description
Supervising professor
Thesis advisor
Vaivio, Juhani, Prof., Aalto University, Department of Accounting, FinlandKeywords
acquisitions, decision-making, negotiation, trust, pre-decision controls, sensemaking
Other note
Parts
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[Publication 1]: Puhakka, H., 2017, Acquisition negotiation: the influence of accounting on trust development, Management Research: Journal of the Iberoamerican Academy of Management, Vol. 15, No. 1, 12–27.
DOI: 10.1108/MRJIAM-11-2015-0621 View at publisher
- [Publication 2]: Puhakka, H., 2016, Acquisition decision-making: the interplay of pre-decision control mechanisms. Unpublished.
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[Publication 3]: Puhakka, H., 2017, The role of accounting in making sense of post-acquisition integration, Scandinavian Journal of Management, Vol. 33, No. 1, pp. 12–22.
DOI: 10.1016/j.scaman.2016.12.001 View at publisher