Empirical Testing of ARCTIC Model for Assessment of Competence Based Synergy in Acquisition Process

Abstract

Purpose: the aim of this paper is to develop and empirically test an integrative research model which would help to assess prerequisites of competence-based synergy in acquisition process.

Design/methodology/approach: What we wanted to know was how core competences should be evaluated as sources of synergy in acquisition/alliance? Having answered this question analysis we have researched the latest theoretical findings in antecedents of synergy in merger and acquisition process and empirically tested by means of illustrative case study.

Findings: Based on literature review in depth, an ARCTIC model has been developed. We have selected illustrative case study of Facebook acquisition of WhatsApp by in mid 2014 year and tested empirically developed methodology.

Research limitations/implications: Illustrative case study involved explores the competence transfer as main drivers of successful acquisition process. The author suggests further empirical testing on illustrative case studies and possible development of methodology for evaluation of all six factors.

Practical implications: Research identified four steps to investigate whether core competence transfer in an acquisition process is an important source of synergy and whether is better to acquire or ally for competence transfer. The ARCTIC model can be used effectively in evaluating core competencies as a means of synergy creation in the M&A context.

Originality/value: The authors believe that six factors of ARCTIC models allow making preliminary evaluation of core competences as sources of synergy in acquisitions and new ARCTIC model should be helpful to mangers facing mergers, acquisitions and alliances, as well as to management academic specialists, studying this area.

Research paper: empirical research, testing of a model.