Evolution of multiple organisational identities after an M&A event

Abstract

Purpose– The purpose of this paper is to examine the possible coexistence of single and multiple organizational identities (OIs) after mergers and acquisitions (M&A). In particular, it describes how the sensemaking process leads the acquired and acquiring companies to maintain multiple identities, even after the formal conclusion of the integration process.Design/methodology/approach– The paper presents a grounded study based on a single case study (M&A between a German chemical multinational and an Italian/Swiss pharmaceutical firm).Findings– While many previous studies suggest that the evolution of OI reduces ambiguity by providing multiple identities under a shared commonality, this paper shows that multiple identities might survive within the same “new entity.”Research limitations/implications– Despite being based on a single case, the paper argues that the choice of maintaining multiple identities may be even more appropriate than the tendency to converge toward one of the old ones or toward a new one. The “sense” that employees and managers give to the same “words,” as well as the “sense” that they make for them, mirrors the perception they have of the OI.Practical implications– The conclusions presented could help managers to facilitate sensemaking as a means of dealing with multiple OIs.Originality/value– Differently from the extant literature, the paper concludes by stating that striking a balance between single and multiple identities might provide the ideal platform for building a new identity based on plurality. When the two (or more) organizational contexts present some complementarities, the existence of multiple identities, and its inner ambiguity, is not a problemper se.