M&As and Corporate Social responsibility

written by Associate Professor Dr. Olimpia Meglio 17. March 2019
Corporate Social responsibility


Mergers and acquisitions continue to grow in number and frequency and latest figures point to M&A having returned to levels previously seen only before the 2007 global financial crisis, although now the majority of transactions involve companies from different countries. As a consequence, acquisitions are reshaping industries, affecting our lives as consumers, employees, stockholders or any of a range of stakeholders. It is not too bold to state that we live with and by acquisitions (Meglio and Park, 2019).
Employees, customers, local communities, the environment, and many more stakeholders affect or are affected by these processes, yet existing literature and business press are dominated by shareholders (Meglio, 2015). The remaining stakeholders only receive scant attention (Waddock & Graves, 2006). In existing research, acquisitions are depicted as serving primarily the interests of shareholders and top management. Employees, suppliers or customers represent means to this end and other stakeholders, such as middle management, local communities, or even the environment (if we venture beyond the anthropomorphic research), have remained mainly voiceless. In this note, I outline how this perspective is too narrow in the wake of important changes underway.

Acquisitions, stakeholders and CSR

Acquisitions have significantly contributed to make the world global.  Globalization has favored the transition to a polycentric world with new actors emerging or existing actors taking up a role they had never had in the past (Scherer & Palazzo, 2011). Today, corporations playing on a worldwide scale interconnect with many actors and places and must cope with often contradictory legal and societal demands from a wide range of institutional and cultural environments. This new scenario requires reconsidering power and responsibilities across different actors and arenas, such as in both public and private spheres and in for-profit as well as not-for-profit domains.

Seen in this light, the narrative of the existing research portraying acquisitions as the realm of shareholders appears inadequate to cope with such complexity and to provide a convincing explanation of why acquisitions succeed or fail. The traditional mesaurement focus on financial market reactions to acquisition announcements, within a very short event window, appears too narrow to account for a variety of outcomes acquisitions produce and makes compelling the investigation of the social impact of M&As. In other words, the time has come to enlarge the domain of analyis of acquisitions beyond the traditional shareholders’ perspective.

The practice of mergers and acquisitions suggests stakeholders and corporate social responsibility issues as gaining increasing importance in acquisition processes. Acquisition motives encompass seeking for targets with an established social coscience as the Unilever-Ben & Jerry case demonstrates. The recognition of the impact of acquisitions on a multitude of interests, which in turn, affect how acquisition processes unfold, represents an untapped potential in the literature.  In addition, CSR programs and initiatives are a means of gaining legitimacy through internationalization strategies. As companies expand and internationalize, they encounter diverse institutional contexts with competing demands and expectations. CSR provides a means of addressing and encompassing these interests within an overarching context of stakeholder outreach on a global scale, customized into different national institutional environments. These unique national customizations provide the local legitimacy within the global perspective.

Building on these considerations, mergers and acquisitions can be better understood by enlarging the domain of analysis with stakeholders other than shareholders. Stakeholder theory provides a reasoned perspective for the way firms should manage their relationships with stakeholders to facilitate the development of competitive resources, and attain sustainable success, a goal broader than financial performance. The stakeholder perspective also helps explain how a firm’s stakeholders’ network can itself be a source of sustainable competitive advantage (Harrison et al., 2010). An important corollary of adopting a stakeholder view is the recognition that acquisitions confront with issues of social responsibility. Stakeholder-based reasoning provides a practical motivation for firms to act responsibly with regard to stakeholder interests and addressing societal concerns.


In this note, I argue that M&As and CSR are intertwined and inform each other. This logic stems from the awareness that acquisitions more and more represent a vehicle for spreading CSR issues across the globe—and there is ‘no one size fits all’ formula. CSR needs to be customized to the insitutional setting because acquisitons do not take place in a vacuum, but rather are embedded in institional settings.  While emphasis is primarily on multinational companies, these considerations equally apply to smaller or less internationalized companies, as they can be targets of acquisitions and can also sometimes expand and become ongoing acquirers themselves.


Harrison, J.S., Bosse, D.A. & Phillips, R.A. (2010). Managing for stakeholders, stakeholder utility functions and competitive advantage. Strategic Management Journal, 31(1), 58-74.

Meglio, O. (2015). The acquisition performance game: a stakeholder approach. In Risberg A., King D.R., Meglio O. (eds) The Routledge Companion to Mergers and Acquisitions, pp. 163-176. Abingdon: Routledge, Taylor & Francis Group Ltd.

Meglio, O. & Park, K. (2019). Strategic decisions and sustainability choices. Mergers, acquisitions and corporate social responsibilities from a global perspective. Basingstoke, UK: Palgrave McMillan.

Waddock, S., & Graves, S. (2006). The Impact of Mergers and Acquisitions on Corporate Stakeholder Practices. The Journal of Corporate Citizenship, (22), 91-109.

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