How Governance Modes Intertwine Over Time : Beyond an Embeddedness-Based Approach to Post-Acquisition Divestitures

The article “Embeddedness across Governance Modes” by Schilke and Jiang (2019) studies whether and how governance modes are intertwined over time. As such, this article belongs to the literature in corporate strategy that aims at developing our understanding of firms' sequential use of alliances, acquisitions, and divestitures (Shi & Prescott, 2011; Villalonga & McGahan, 2005). Combining insights from the literature on pre-acquisition alliances with arguments proposed by research on post-acquisition divestitures, the authors develop a very interesting approach to the impact of the use of pre-acquisition alliances on post-acquisition divestitures. In this commentary, we extend their analysis by revisiting their assumption on the factors driving post-acquisition divestitures. Instead of adopting a “reactive approach” to divestitures, considering that firms divest recently acquired entities when they cannot manage them, we develop a complementary argument based on the reconfiguration literature