Business Network Dynamics and M&As: Structural and Processual Connectedness Helén Anderson The International Graduate School of Management and Industrial Engineering at Linköping University, Department of Management and Economics, SE-581 83 LINKÖPING, Sweden Tel: +46 13 28 25 17, Fax: +46 13 28 18 73 E-mail: helan@eki.liu.se Per Andersson Stockholm School of Economics, Sweden Center for Marketing, Distribution and Industry Dynamics E-mail: dpa@hhs.se Virpi Havila Uppsala University, Sweden Department of Business Studies E-mail: virpi.havila@fek.uu.se Asta Salmi University of Vaasa, Finland Department of Marketing E-mail: asta.salmi@uwasa.fi Abstract Our point of departure is business network dynamics and the phenomenon of mergers and acquisitions. We discuss both structural and temporal connectedness of business nets, where the merging firms are embedded in. Depending on the degree of structural connectedness (or overlapping) which can also be discussed with the help of position concept, the merger or acquisition will bring about more or less changes to the business network. In addition, the temporal connectedness deserves attention as it helps in understanding the change processes. We conclude the paper by noting that for managers it is essential to acknowledge connectedness (structural/processual) both in a pre-merger (planning) and integration (implementation) phase of M&As in order to analyse the potential performance and outcome. 1. Introduction A very common business phenomenon is that of acquisitions and mergers between business firms. The motives for entering into partly, or full, ownership over another firm are many. We can see motives of more expansive character such as wanting to co-operate on new business opportunities, often called forming partnerships for win-win situations, so called synergy effects are expected to materialise. The basic economic benefits will then come from the increased revenues. However, the more substantial reason for co-ownership, or even integration of two companies, seems to be the possibility to reduce costs regarding procurement, production and R&D. The research of the M&A phenomenon so far has largely focused on the two merging companies.