Magnitude of Cost Savings Scale

What it measures

Nine-item scale measuring the extent to which marketing and sales resources were reduced following a merger or acquisition, operationalising the magnitude of cost savings achieved through integration. Items cover reductions in products offered, services offered, brands, strategic business units, sales channels, production locations, sales offices, and marketing and sales headcount. Content generated primarily through field interviews with M&A practitioners.

Response format

7-point scale (1 = not reduced at all, 7 = strongly reduced)

Scale items

• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (1) Products offered
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (2) Services offered
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (3) Brands
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (4) Strategic business units
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (5) Sales channels
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (6) Production locations
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (7) Sales offices
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (8) Total employees in marketing
• To what extent were the following resources reduced as a result of the merger or acquisition? (Please refer to both firms together.) (9) Total employees in sales

Full scale items shown. Always cite the original source when using this scale in research.

Usage notes & scoring

Composite reliability = .89; average variance extracted = .50. Content generated from field interviews and prior M&A literature. Validated in 232 horizontal M&A. Study found cost savings had a weaker effect on financial performance (β = .07) than market-related performance (β = .67), suggesting caution in integration strategies motivated purely by cost reduction.

Recommended companion scales

Citation

Homburg, C., & Bucerius, M. (2005). A marketing perspective on mergers and acquisitions: How marketing integration affects postmerger performance. Journal of Marketing, 69(1), 95–113.

Keywords