2.1. Defining and Measuring Corporate Organisational Resilience
Although resilience has long been applied in fields like physics, ecology, and psychology, it only gained prominence in business and management research in the 1980s [
25,
26]. The emphasis in the organisational area related to resilience was on how firms may respond to a quickly evolving business environment [
27,
28]. Corporate organisational resilience refers to a business’s ability to recover and bounce back from adverse events, growing against the odds through reflection and improvement [
23,
29]. Recognised as crucial for navigating unexpected threats and crises [
30], it has become a key strategic element in tumultuous business climates, particularly since the global financial crisis [
31]. Academic interest has led to two primary perspectives on organisational resilience: dynamic and static. The dynamic view sees organisational resilience as an organisational capability, ensuring safety in crises or adverse situations [
32]. In contrast, the static view defines it from an outcome perspective as the ability to adapt and survive in the face of uncertain environments or sudden events [
33,
34]. The concept of organisational resilience includes two key characteristics: first, the enterprise’s exposure to the variability and turbulence of social, economic, and global environments; second, the enterprise’s ability to maintain robust operations, adapt, and recover when impacted [
35]. Therefore, this paper defines it as the ability of enterprises to identify environmental risks, apply resources and strategies against short-term disruptions, and achieve long-term growth.
However, although the academic community is enthusiastic about corporate organisational resilience, due to the singularity of the research environment, it mainly adopts the method of theoretical reasoning, focusing on the discussion of the definition and principles of organisational resilience and its role in the face of adversity [
3,
36]. While qualitative research on corporate organisational resilience is plentiful, quantitative studies are less common. This scarcity is attributed to the abstract nature of the concept and its varied interpretations, leading to diverse measurement approaches. These methods fall into three broad categories. The first is the questionnaire method, which involves creating surveys based on organisational resilience concepts [
37]. For instance, Lin and Fan (2024) employed a seven-point Likert scale to gauge corporate organisational resilience, and it segmented the measurement of corporate organisational resilience into two dimensions: proactive organisational resilience and reactive organisational resilience [
38]. Wang (2019) measured organisational resilience across nine items in three dimensions: adaptability, recovery ability, and situational awareness [
39]. Kantur and Say (2012) designed a resilience questionnaire based on the dimensions of robustness, agility, and integrity [
40]. Lu et al. (2021) combined corporate interviews and referenced Kantur et al. (2015) to objectively measure resilience in terms of recovery time and level [
41,
42]. The second method is a financial analysis. This approach treats organisational resilience as an intangible, path-dependent quality, indirectly measurable through financial metrics. It hinges on financial indicators for assessing resilience. Desjardine et al. (2019) took a narrow view, defining organisational resilience as the extent of loss and subsequent recovery following adverse events, quantified by changes in stock prices and the duration of recovery [
8]. Ortiz-de-Mandojana and Bansal (2016) adopted a broader perspective, using financial volatility and long-term growth as proxies for organisational resilience, whereby long-term growth signifies resilience enhancement and financial volatility represents its protective mechanism [
9]. Zhang et al. (2023) employed the entropy method to derive measures from long-term growth and financial volatility, providing a holistic assessment of organisational resilience [
43]. Liu and Xu (2024) focused on resilience in terms of resistance and recovery, evaluating resistance by the magnitude of the stock price decline and recovery by the extent of the stock price rebound after a crisis [
44]. The third approach incorporates internal and external influencing factors, measuring resilience based on competitive advantage and market responsiveness or enhancements in human resource management [
45,
46]. The right competencies and qualities of people within firms are fundamental for leveraging other assets to build resilience [
47]. These diverse methodologies each have distinct features and applications, but a unified standard for measuring corporate organisational resilience has yet to emerge.
The prevailing literature indicates that corporate organisational resilience can be assessed through performance outcomes in response to environmental shifts, typically using measures of long-term growth and short-term financial fluctuations [
2]. Nonetheless, several studies underscore ‘challenging conditions’ as pivotal in evaluating organisational resilience [
48]. This paper argues that for a robust assessment of organisational resilience, long-term growth reflects the capacity for post-impact recovery, and short-term financial volatility signifies rapid response efficacy. However, existing methodologies overlook the measurement of risk perception ability, omitting the integration of ‘challenging conditions’ in resilience evaluation. Therefore, this paper enhances the measurement framework by holistically quantifying organisational resilience, considering a triad of factors: corporate risk-taking, long-term growth, and short-term financial dynamics.
2.2. Cross-Border M&As and Corporate Organisational Resilience
The resource-based view posits that material assets, cash resources, human resources within a firm, and social resources external to the organisation are crucial components of organisational resilience [
29,
47,
49,
50]. Compared to domestic acquisitions, cross-border M&As can first overcome imperfect markets, thereby reducing operational costs and enhancing operational performance, creating more material and financial assets for firms. Second, firms can acquire more heterogeneous advantageous elements such as foreign technology, brands, and marketing networks from cross-border M&As [
51], which add significant value to the firm’s production and operations. Therefore, cross-border M&As have a positive impact on organisational resilience.
From the perspective of the dynamic capability theory, the resource endowments brought about by cross-border M&As enhance a firm’s dynamic capabilities, thereby improving organisational resilience. Teece et al. (1997) first introduced the dynamic capability theory, highlighting the significance of integrating, constructing, and reconfiguring internal and external resources in response to market changes [
52]. This theory posits that a firm’s dynamic capabilities are primarily utilised to address environmental turbulence [
53]. In environments marked by fierce competition, unpredictable demand, and rapid technological shifts, dynamic capabilities allow firms to adapt strategically and operationally, while managing risks [
54,
55]. Teece (2007) notably categorised dynamic capabilities into sensing, seizing, and reconfiguring capabilities [
56], a framework extensively explored by subsequent scholars [
57,
58]. Wang and Ahmed (2007) identified absorptive, adaptive, and innovative capabilities as key dimensions [
59], while Li and Mao (2010) focused on sensing, decision-making, and resource base-changing capabilities [
60]. Thus, dynamic capabilities encompass behavioural aspects like resource integration and restructuring as well as cognitive aspects, such as perceiving opportunities and threats, which manifest in various forms across organisational levels [
61].
Cross-border M&As provide firms with financial resources [
62], technological resources [
63], entrepreneurial resources [
64], intangible resources [
65], human capital [
66], organisational experience [
67,
68], complementary resources [
63], heterogeneous resources [
69], and initial endowments [
70], all of which can enhance a firm’s dynamic capabilities. Fang and Zou (2009) found that the quantity of resources and the complementary characteristics of resources in cross-border joint ventures have a significant positive impact on marketing dynamic capabilities [
71]. By enhancing their dynamic capabilities, firms can maximise their ability to acquire, allocate, and utilise resources (integrative capabilities), identify environmental opportunities, and respond swiftly (sensing capabilities), ensuring effective engagement in multi-agent interactions [
72].
The influence of cross-border M&As on corporate risk-taking correlates with the firm’s sensing capabilities. These capabilities, as Teece (2007) outlined, involve perceiving external environmental opportunities and threats in rapidly changing markets [
56]. Companies that engage in cross-border M&As develop their dynamic capabilities by identifying and responding to environmental opportunities [
73]. In terms of organisational culture, a diversified international culture can garner support from various participants in activity allocation, thereby enhancing a firm’s sensing capabilities [
74,
75,
76]. Highly internationalised firms can track shifts in the global business environment, perceive risks and opportunities, and offer chances to reallocate resources, transfer knowledge, and hedge risks through arbitrage [
77]. At the individual level, a manager’s knowledge, experience, and skills [
78], as well as their international perspective [
79], are crucial in perceiving opportunities and threats, making timely market decisions, and changing the resource base to develop new products. Nonetheless, cross-border M&As face challenges like navigating legal and cultural differences and managing internal resource integration and synergy. Mergers between culturally and managerially diverse companies risk cultural conflicts and management issues, escalating overall operational risks [
80,
81]. Furthermore, adherence to varied legal, tax, and compliance frameworks across nations can lead to intricate legal and compliance dilemmas, heightening legal risks [
82,
83] Thus, while cross-border M&As can boost sensing capabilities, their inherent complexity and uncertainty may undermine existing strengths, elevate risk-taking, and adversely affect organisational resilience.
The impact of cross-border M&As on short-term financial volatility is related to a firm’s seizing capabilities. Seizing capabilities primarily refer to the ability of firms to fully utilise and deploy resources in response to rapidly changing environments [
56]. Dynamic capabilities act as a causal mechanism for generating economic rents or profits and play a crucial role in achieving superior short-term financial performance [
84]. Teece (2012) emphasised that both large and small enterprises need to improve existing practices and implement new ones in order to establish and maintain exceptional financial performance [
85]. However, cross-border M&As involve higher ‘synergy costs’ and ‘operational costs’, including knowledge and technology integration, production restructuring, personnel adjustments, and industry entry barriers. Institutional and cultural differences can escalate these costs [
82,
86]. The merging of companies can lead to short-term operational inefficiencies due to cultural, managerial, and business practice differences. However, cross-border M&A firms can seek and further develop resources to render them commercially valuable [
87]. The abovementioned studies indicate that the seizing capabilities of firms involved in cross-border M&As significantly influence both short-term financial volatility and long-term financial performance.
The influence of cross-border M&As on long-term corporate growth is tied to reconfiguration capabilities. These capabilities include strategic management to guide internal transformation, as well as the integration and reconfiguration of resources to maintain a competitive advantage [
56]. In volatile market environments, companies need to reconfigure and update existing resources in response to market shifts and technological opportunities. Dynamic capabilities aid in strategic renewal and rapid resource integration and realignment for achieving a sustainable competitive advantage [
24]. In terms of long-term growth, dynamic capabilities continuously influence sustained competitive advantages, driving the long-term adaptability of organisations [
88]. Diversified multinational corporations have a knowledge edge in nurturing dynamic capabilities [
89]. By leveraging reconfiguration capabilities, cross-border M&A firms can integrate and reconfigure resources to support long-term growth strategies [
19,
90]. As a major investment activity for businesses, dynamic capabilities also help entrepreneurs or management teams resolve decision-making disagreements, ensuring strategic consistency and deploying resources effectively in order to seize opportunities [
91]. In terms of innovation performance, reconfiguration capabilities transform market-generated knowledge into resources, skills, and activities that meet customer needs. Firms continually alter their existing resource base by utilising, creating, acquiring, and releasing resources, configuring new knowledge for various forms of innovation, while supporting innovative activities like product development and market expansion, promoting business internationalisation [
92]. This demonstrates that cross-border M&As are not only a means for enterprises to achieve long-term growth but also a crucial strategy for driving innovation and market expansion.
In summary, cross-border M&As may heighten corporate risk-taking and induce short-term financial fluctuations, yet they are conducive to long-term growth. Hence, this paper proposes the following hypothesis.
Hypothesis 1 (H1). Cross-border M&As increase corporate risk-taking, short-term financial volatility, and long-term growth levels, ultimately enhancing corporate organisational resilience.
2.3. Cross-Border M&As, CSR and Corporate Organisational Resilience
CSR refers to a business’s commitment to going beyond profit-making objectives to enhance social welfare. An organisation with a robust CSR agenda is more regularly engaged and anchored in its society [
93]. According to Desjardine et al. (2019), CSR enhancing stakeholders’ engagement is an essential attribute of corporate organisational resilience [
8]. Utilising broad stakeholder engagement, CSR gives rise to more flexibility when firms can access distinctive and diverse viewpoints and adjustments to external changes, fostering these firms’ capacity to absorb shocks, which supports their organisational resilience [
94,
95]. However, Heinz et al. (2021) emphasised that investment in CSR shapes deeper relationships with stakeholders in stable periods before shocks, providing firms with a greater opportunity to exhibit stability and recover more quickly after those shocks [
22]. Studies have shown that companies that are more dedicated to social responsibility recover faster from economic crises [
95,
96]. Furthermore, CSR can improve the performance of cross-border M&As [
21]. As the global emphasis on CSR has increased, it has been integrated with the dynamic capability theory [
97].
First, CSR aids businesses in adapting to market and societal changes, thereby facilitating resource reconfiguration. Adaptability, the ability to identify and exploit market opportunities [
59], is a key dimension of the dynamic capability theory. In the process of creating cross-border M&As, businesses need to reconfigure resources to fit new market contexts. CSR enhances a firm’s adaptability and social capital, thereby strengthening organisational resilience. Thus, CSR not only boosts a company’s social image and reputation but also becomes a vital force for sustained growth and adaptation in the complex and ever-changing global market.
Second, CSR plays a pivotal role in fostering corporate innovation and learning capabilities. It often inspires innovation in products, services, and operational models, with the aim of meeting social and environmental needs. As a key dimension of dynamic capabilities, innovation capacity is a firm’s ability to develop new products and markets, focusing on the relationship between a company’s resources and capabilities and the product market [
59]. In the context of cross-border M&As, this innovation capability is essential for adapting to new markets and integrating different operations, while also being crucial for strengthening organisational resilience. Human capital is fundamental to corporate innovation capacity. By fulfilling their responsibilities towards employees, businesses can attract top talent and enhance employee engagement [
98]. CSR boosts employee satisfaction and commitment, thereby promoting innovative behaviours [
99]. Moreover, in fulfilling their responsibilities towards consumers and suppliers, businesses gain deeper insights into market environments and demand structures. This aids in new product development based on market orientation and advanced supplier technologies, enhancing innovation success rates. Additionally, through strategic engagement in CSR, firms can innovate products and processes to meet stakeholder needs, granting them a significant competitive advantage in long-term performance growth [
100]. Therefore, CSR is a key driver for promoting innovation and long-term corporate growth.
Third, viewed through the lens of bolstering stakeholder cooperation and coordination, CSR is instrumental in fostering solid relationships with a range of stakeholders [
101], which in turn enhances organisational resilience [
102]. CSR disclosures can elevate a company’s governance ratings [
103,
104], mitigate information asymmetry [
105], and secure stakeholder support. These relationships are vital to dynamic capabilities, boosting a company’s ability to seize opportunities. In cross-border M&As, this facilitates adaptation to new markets, improves post-M&A stability and coordination efficiency, enables firms to buffer external shocks [
106], and accelerates recovery by leveraging external resources from stakeholder networks [
95], thus augmenting organisational resilience [
8]. Therefore, CSR plays a crucial role in long-term corporate development, not only promoting strong cooperation and coordination with stakeholders but also providing robust support for continuous growth and market adaptation.
In summary, CSR bolsters dynamic capabilities by facilitating resource reconfiguration, fostering innovation, and enhancing stakeholder cooperation, helping firms tackle the challenges and uncertainties of cross-border M&As and thus boosting organisational resilience. Therefore, this paper suggests that CSR plays a key role in shaping or reinforcing organisational resilience in cross-border M&A firms.
Hypothesis 2 (H2). The implementation of CSR positively influences the link between cross-border M&As and corporate organisational resilience.
2.4. Cross-Border M&As, Market Power and Corporate Organisational Resilience
Market power refers to a company’s competitive position and influence in the market, encompassing market share, pricing power, and control over industry standards. This makes it a crucial aspect of a firm’s market competitive advantage [
107]. Datta et al. (2011) noted that firms with greater pricing power or market influence within their industry are better able to maintain their profit margins amidst market shocks [
108]. By leveraging their market power to increase prices, companies attain excess profits and returns, enhancing their market competitiveness and providing better investment and development opportunities [
109,
110]. As a measure of a firm’s ability to control the market, market power reflects the changes in market structure and enterprise performance [
111]. Market power can be linked to the dynamic capability theory in several respects.
First, it boosts a company’s market adaptability. Stronger market power aids in resource acquisition and integration, enhancing adaptability to environmental changes [
24]. In cross-border M&As, dynamic capabilities facilitate the integration of new business units, increasing M&A success rates, and thereby fortifying organisational resilience [
112]. Hence, market power is not only a vital asset for market competition but also a key factor in addressing challenges and achieving sustainable development in the ever-changing global market environment.
Second, market power is a key driver of corporate innovation. Innovation enables companies to maintain and enhance their dynamic capabilities [
59]. Porter (1985) highlighted that market power can provide the space and motivation for innovation by influencing competitors’ behaviours and industry norms [
113]. Firms can harness their market power to innovate in products, services, and business models, thereby boosting their dynamic capabilities. Thus, market power offers opportunities for growth and profit and is a significant force for sustained innovation and enhancement of competitive strengths.
Third, market power can enhance a firm’s risk management capabilities, enabling greater resilience in the face of market fluctuations. This is particularly pertinent to cross-border M&As, in which firms often encounter numerous risks. According to the dynamic capability theory, companies with significant market power can more effectively utilise their adaptability and resource reconfiguration abilities. This means they can respond swiftly to market volatility, implement risk diversification strategies, and maintain stable operations during crises. Therefore, by increasing their market power, firms not only strengthen their capacity to manage risks and survive but also foster the resilience to bounce back [
114]. This ability allows businesses to maintain a competitive edge in uncertain market conditions and confront various challenges, thus ensuring long-term stable growth.
In summary, market power enhances a firm’s dynamic capabilities by improving market adaptability, innovation capacity, and risk management. This empowers companies to address challenges and uncertainties in cross-border M&As, thereby strengthening their organisational resilience.
Hypothesis 3 (H3). Market power positively influences the relationship between cross-border M&As and corporate organisational resilience.