Science Research Management

Science Research Management ›› 2021, Vol. 42 ›› Issue (5): 12-20.

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The merger and acquisition of S&T enterprises and their innovation incentives

Zhang Bing1, Sun Hongyan2, Cheng Xinsheng2, Li Qian2, Huang Lixin2   

  1. 1. School of Economics, Huazhong University of S&T, Wuhan 430074, Hubei, China; 
    2. School of Business, Nankai University, Tianjin 300071, China
  • Received:2020-08-12 Revised:2021-03-09 Online:2021-05-20 Published:2021-05-19

Abstract:      How to effectively integrate the internal resources of enterprises after merger and acquisition, so as to realize the sustainable development of innovation, is an important problem faced by S&T enterprises. The existing literature mainly discusses the influencing factors of technological innovation ability of enterprises after merger and acquisition from the perspective of the characteristics of merger and acquisition enterprises and the degree of resource matching between merger and acquisition parties. However, the above literature is still unable to answer how to maximize and release the innovation potential of merger and acquisition parties through the optimization of management and governance means, so as to produce the positive effect of “1 + 1 > 2”. In view of this, this paper uses the method of multiple case study, combined with grounded theory, and takes innovation incentives as the starting point, focusing on the following three issues: what factors should be considered in innovation incentives after merger and acquisition of S&T enterprises? What is the specific incentive mechanism for innovation? How to ensure the effectiveness of innovation incentives after merger and acquisition?
    When the merger and acquisition enterprises carry out innovation incentives, it needs to focus on five key factors, including inclusiveness and cohesion, cultural exchange, equal treatment, ensuring development, and medium and long-term incentive. Accordingly, the innovation incentives mechanism after the merger and acquisition of S&T enterprises includes authority establishment mechanism, employee cooperation mechanism, employee participation in decision-making mechanism, employee development mechanism, and interest binding mechanism. The establishment of the company′s internal leadership needs to be carried out with the contribution of the community, emphasizing work efficiency and innovative ideas. At the employee level, we should not only encourage employees in different technical fields to actively carry out project cooperation, but also support employees to participate in innovation decision-making, and provide a good working environment for employees to carry out innovation activities through the development of a perfect employee vocational training system, so as to improve employees′ organizational identity. After merger and acquisition, we also need to actively carry out innovation incentives work, such as restricted stock incentive, post equity incentive, innovative achievement oriented equity incentive, especially for R & D personnel, multiple incentive forms are allowed to coexist; the implementation of medium and long-term incentive for innovation subject is conducive to resolving the interest differences between knowledge workers and shareholders, and thus promoting the realization of long-term development goals of enterprises. Through the dual role of organizational identity and interest binding, we can stimulate and shape the motivation and behavior of knowledge workers, so as to promote the innovation and development of S&T enterprises after merger and acquisition.
     In order to ensure the smooth implementation of the incentive mechanism, on the one hand, the merger and acquisition enterprises need to overcome the "outsider disadvantage" and establish a relationship from trust to commitment with the target enterprises, so as to realize the transformation from "outsider" to "insider". On the other hand, the merger and acquisition enterprises should adhere to the policy of "tolerating short-term failure and encouraging long-term success", and implement effective innovation incentives based on medium and long-term incentive according to the particularity of the target enterprises’ internal knowledge staff.
    The results not only expand the scope of application of innovation incentives, but also supplement the empirical evidence of integration after merger and acquisition. It is also of great significance for enterprises in social practice to integrate after merger and acquisition through effective implementation of innovation incentives, so as to achieve technological catch-up and transcendence.

Key words: S&T enterprises, integration after merger and acquisition, innovation incentives