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Abstract

This paper aims to explore identity construction in cross-border M&As, a topic of increasing interest to international management and organizational scholars. Multiple organizational identities are particularly salient in cross-border M&As and the construction of such an identity may be particularly complex as members of the acquired organization may need time to figure out how they differ from the acquirer and sister organizations in the parent network. Despite important insights into organizational identity, work remains to be done on how organizational identities are constructed and changed through intergroup interactions (social construction), wherein individuals act as members of their group in relation to members of other groups (social identity), and through interactions with external actors (social actor). The question of how multiple identities are constructed throughout an organization’s relationship with external stakeholders has in particular received scant attention from scholars. To address this gap, we will explore recent and growing phenomenon of initially small Chinese firms transforming into global players has deepened the need for greater theoretical insight into identity construction in cross-border M&As. This phenomenon is driven by Chinese acquisitions in industrialized countries and through international joint ventures, strategic alliances or acquisitions by western firms in China. We will focus on western acquisitions in China and argue that they may involve identity change from a local Chinese identity to the more “international” identity of the acquirer. Moreover, with access both to the Chinese market and western technology, a Chinese subsidiary of a European firm might change its mandate over time, e.g., shift from manufacturing to innovation, which might require further identity change from a Chinese to an “international” one. Thus, the research question guiding our study is: how does a Chinese local firm become a global player following Sino-Western M&As through interactions between members of the acquiring and acquired organizations? We conducted a longitudinal qualitative study of a European acquisition in China wherein we conducted interviews with senior executives who are in frequent Sino-European interactions. Our findings reveal how an initially Chinese organization, as evident at the beginning of the joint venture, has become international through interactions with both the western HQ and its external environment in China and later in South East Asia (competitors, customers and government). Interestingly, Alpha-China demonstrated a dual identification: Alpha-Holding and Alpha-China. However, in contrast with existing research, Alpha-China acted as “China” towards Alpha-HQ but as “Alpha-Holding” towards its external environment.

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