The purpose of this study was to (1) investigate whether variations in corporate and business level strategies have any impact upon post merger integration practices of firms acquiring food service organizations; and (2) to develop some preliminary explanations as to any relationships that may exist between the two.

Four factors which have significantly influenced the development of this study included (1) the current high volume of merger activity; (2) the high degree of merger failures which could be attributed to poor management practices after a firm had been acquired; (3) the increased significance of the service sector within the United states economy; and (4) the high degree of merger and acquisition activity involving foodservice organizations.

Although the empirical and conceptual literature on mergers and acquisitions is quite voluminous, very few studies have specifically addressed postmerger integration practices. The relevant empirical literature, derived mainly from manufacturing firms, does suggest that parent firms, engaging in horizontal or highly related mergers do tend to exert a great deal of control and influence over their new subsidiary, while parent firms engaging in concentric, conglomerate or unrelated mergers do not.

To investigate this issue in a service sector setting, three sets of conceptual and operational hypotheses depicting different dimensions of corporate and business level strategies and eight post merger managerial decisions were developed and tested.

The population for this study consisted of all firms acquiring a foodservice organization during the period from 1976 to 1981. The data were collected via questionnaires sent to executives in the parent organizations. Chi square was used to test all conceptual and operational hypotheses.

The results of this study, utilizing service firms in the sample, were quite consistent with the past merger and acquisition literature and the strategy-structure literature. Each suggested that for parent firms engaging in a horizontal or highly related acquisition, a high degree of integration usually took place, while for parent firms engaging in concentric, conglomerate or unrelated acquisitions, a low degree of integration usually took place.

This study provided no evidence to suggest that service firms are treated different from manufacturing firms when it comes to integrating a new acquisition.