What do you see when you start thinking about mergers and acquisitions? In the practical sense, you might think about a huge undertaking for a both the buyer and the seller. The negotiations might unfold as a multi-party decision-making situation and the integration process as different streams of technical, business, personnel and cultural changes. Integration streams that are somehow surprisingly separate, governed by different people and systems, yet explained by different theories. M&A might occur as organisations try to find optimal fit among many contingencies or try to fulfil organisational goals by implementing new and replacing or maintaining existing management control systems. Organisations in search of growth might end up scrambling through turbulence to get back into a governable state.
What is the role of accounting in all of this? A source of objectivity and something to count on in an otherwise uncertain situation? A walking stick to help you up the hill? Maybe a microscope to analyse every detail or a pair of binoculars to see the distant lands far ahead and far into the future? Well, it all depends on how you look or sometimes, who is looking. Yes, accounts are audited and produced by some of the most precise people around, but does accounting and all its translations tell an objective story or are the presenter, the audience, and the materials at hand always subjective to a lesser or greater extent? Are the current negotiations or integration actually the hill you are supposed to be climbing on after all? If accounting is a microscope, has it been used properly or in the end, at all? Were the lenses of the binoculars crooked by hopes, dreams, nightmares, illusions, or maybe just simple promises? There’s a multitude of possibilities, including a multitude of actors applying a wide array of accounting and other tools. Accounting is not alone, and you could even argue that there is not one accounting, but at least two accountings or maybe more generating different views of the world at the same time. Which ones to choose? Which ones to match?
When it comes to M&A and accounting, the nature of things has to be taken into account. It’s not simply a decision-making situation leading either to a success or failure, nor is it a simple quest for growth or better performance. You cannot slice and dice in the different layers of technical and human beforehand by selecting a theory and concentrating on one or the other. The best possible management control system might lead organisations astray in both negotiations and integration, while sheer luck could save some from wandering in the wilderness. The changing roles played by different actors, both human and non-human, weave a web that is not easily labelled, put in a box and a stored in a warehouse of knowledge. This is why a researcher needs to drill down into to the details, to the actors and their attachments, in order to fully grasp the nature of M&A and the role that accounting plays in it. That’s what I’m planning to do in my research.
Mikko Kulmala
PhD Student, University of Vaasa, Accounting
Senior lecturer, Digital Business and Programming at SeAMK
I think you are up to something exciting on your journey to create new knowledge about accounting and M&A. You described well the complexities of M&A, and maybe that complexity is the reason why M&A is such an interesting topic.
Tsemppiä Mikko!
Insightful reflection on the intertwined nature of M&A and accounting. Your analogy of accounting as both objective and subjective offers a nuanced perspective. Excited to see where your research leads in unraveling the web of M&A and accounting dynamics!
Your research topic of M&A and accounting is thoughtful and forward-looking. You’ve identified the dynamic interaction of technical, human, and systemic factors in M&A, which significantly deepen our understanding and improve practices in the field. I’m looking forward to the unique insights and innovative solutions your work will bring to this complex area.
You will discuss interestingly in your blog the role of accounting in a corporate acquisition in the context of mergers and acquisitions. This is a significant issue for both the buyer and the seller. As mentioned above, negotiation situations may then be complex, critical decision-making, and judgmental events between several parties. It must take into account the operating environment and stakeholders. So here it is good to consider whether some scientific explanatory theory can be utilized in the situation? In your research, you will certainly aim to create a theory on this topic, from the point of view of which this phenomenon could be examined more scientifically. This will certainly provide important information for the business sector, as negotiation situations are difficult to manage in connection with acquisitions.
In particular, you will consider the role of accounting in this matter and context. It is interesting to know exactly what its impact is on decision-making during the negotiation process. You metaphorically tell and assume what the role of accounting is in this context. Whether it is only a small support in this matter or whether it can be used to look at it and assess future developments. As you mention, interpretative matters certainly have a lot to do with how accounting is seen to take advantage of the process in question. There will probably always be some kind of bias and things will never be completely black and white here either.
A good technical solution to the problem would certainly be to build the best possible control system for this purpose. You have to get into a detailed planning process, you have to be able to understand the issue from many perspectives.