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Sustainable supply chains enabled by mergers & acquisitions: motivations, strategic considerations, and integration outcomes

Authors: Manocha, Pavan;

Sustainable supply chains enabled by mergers & acquisitions: motivations, strategic considerations, and integration outcomes

Abstract

There is an increasing strategic imperative for leading manufactures to rethink their operations, particularly within the context of the sustainable development goals (SDGs), and their environmental, social, and governance (ESG) commitments. Today, ESG performance is a critical component of business strategy, and a source of competitive advantage. From a strategic operations management perspective, an under explored dimension is the role mergers & acquisitions (M&A) plays in enhancing the ESG profile of an organisation, and that of its product supply chain. While outcomes from M&A may produce mixed financial results, the challenges of enhancing post-merger ESG performance is not well understood in the operations management literature, or practically considered during M&A, representing a gap of both theoretical and practical relevance. The objective of this research is to study sustainable supply chains enabled by M&A, by examining motivations, strategic considerations, and integration outcomes from a capabilities perspective. The research question is: How might sustainable supply chain perspectives inform M&A? A multiple case study research approach was adopted, drawing upon eight in-depth product-supply chain M&A transactions within the agri-food and energy sectors. These industries were selected based on their recent volume of M&A activity, and their increasing strategic significance on sustainability. This research contributes to two main streams of sustainable supply chain theory: theory describing supply chain strategies for competitive advantage, and those theories for developing organisational and performance processes for operations sustainability. This thesis contributes five new insights relevant to firms active in M&A, with ambitious sustainable supply chain goals. Firstly, a deal analysis and maturity model framework, integrating key concepts from sustainable supply chain management and the M&A process literature is defined. Secondly, existing merger motives that explain M&A target selection are expanded to include product stewardship, firm ESG performance, and network transformation as sustainable supply chain motivations. Thirdly, this research provides insight into the strategic considerations of relevance by M&A process phase when executing sustainability-targeted M&A. Fourthly, the integration outcomes that are enabled by sustainable supply chain M&A are identified. Finally, propositions for sustainable supply chains are identified that define the relationship between the merger motivations, strategic considerations, and integration outcomes. Together, these form a substantive sustainable supply chain management premise, and a new organisational process perspective for operations sustainability-enabled M&A. This research is of relevance to managerial practitioners in part due to the increasing stakeholder interest in operations sustainability and ESG performance. Industrial sectors and firms with ambitious ‘net-zero’ transition agendas will find the merger motives, strategic considerations, integration outcomes, and resulting operations-sustainability M&A deal archetypes of practical relevance. The four emergent deal archetypes are 1 (passive), 2 (pragmatic), 3 (ideological), and 4 (regenerative). Furthermore, private equity firms and corporate development officers exploring divestment opportunities might utilise this operations-sustainability enabled M&A perspective to inform due diligence and supply chain ESG risk management.

Country
United Kingdom
Related Organizations
Keywords

Energy, Sustainability, Supply Chain, Mergers & Aquisitions, Agri-Food

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citations
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
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