engleski

Motives for M&As in Small and Medium Enterprises

One of the most widely used means in achieving firms’ growth and development are mergers and acquisitions (M&As). However, numerous empirical studies have questioned the success of M&As in increasing the firms’ value for their owners, both in the short and long run, and in increasing operational efficiency of the newly established system. Even though varying in methodology, sample size and structure, monitored time and geographical spread, the majority of research indicate that many M&As fail in accomplishing described criteria, i.e. that they do not increase the firm’s business success. This opens questions about the popularity of M&As since it is well known that there is a high rate of M&As failures in creating value. In order to be able to address these questions it is necessary to examine the possible motives for M&As offered by organizational theories. These motives can be divided into three groups: strategic (or market) motives, synergetic motives and managerial motives. The analyses of the motives show that the firm’s goals for engaging in M&As could sometimes be reached even when financial analyses show failure. However, most attention, regarding M&A success, is focused on publicly listed firms, even though the majority of firms are small and medium- sized enterprises (SME). Due to their smaller degree of organizational complexity, limited reach to market and financial opportunities and higher resource dependency, it could be expected that their motives and goals in M&A processes are somewhat different then those of larger firms. In addressing these issues, as a part of wider research on the competitiveness of firms in Croatia, we have tried to analyze the motives leading SMEs to engage in M&As. We have conducted a questionnaire among SMEs in Croatia’s Primorsko- goranska County which allowed us to determine the share of firms interested in future M&A involvement. Furthermore, for those that showed interest, we have analyzed their motives and conducted t-tests seeking differences among certain groups of firms. Although the achieved results are partially inconclusive and require further research, they allow us to the conclude that the motives for SME interest in future M&As are primarily strategic and that they mostly do not expect significant cost savings through organizational synergies.

M&As; small and medium sized enterprises; motives; integrations

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