The Role of Occupational Identification During Post-Merger Integration.

After 30 years of research in mergers and acquisitions and advances in the research of post-merger integration (PMI) processes, the outcome of a merger remains hardly predicable. Traditional leadership and change theories have not succeeded in fully explaining PMI processes and therefore new theories are needed. This article offers new insights into the integration and change processes by looking at the merged organisation as a complex adaptive system (CAS). It discusses characteristics of CAS and applies them to PMI, and questions pure cause-and-effect relationships by interpreting change processes as sometimes non-linear, unpredictable, with various feedback mechanisms. In addition, the article summarises new leadership theories emerging from a complexity perspective which might contribute to a better understanding of the PMI process. It concludes by advocating that for a successful integration both, traditional and complexity leadership is needed.

How does decision-making involvement affect perceptions of speed during post-merger integration?

To provide more insight into how organization members (re)construct their organizational identity during post-merger integration, we performed an extensive longitudinal study with empirical data from the recent acquisition of the KLM airline by Air France. Our findings illustrate that the degree of departmental integration influences the adoption of particular identity (re)construction mechanisms and, through these, the organizational identity categories employed. We further observe that identity (re)construction mechanisms and organizational identity perceptions change over time during a post-merger integration process. Taken together, our study forms the basis for a rudimentary theory of organizational identity (re)categorization in the wake of post-merger integration.

PurposeIntergroup dynamics between the acquirer and the acquired are determinants of post-merger integration success. Mergers and acquisitions scholars call for the adoption of new reading prisms to gain deeper insights on post-merger integration dynamics as the failure rate of mergers remains high. In mobilizing works from social psychology to examine intergroup dynamics, this study aims to respond to this call by shedding light on the post-merger integration process. Typologies of integration processes do not take into account intergroup dynamics that operate within the new entity, which are influencing the decision-making process. To better understand how firms achieve a successful integration (symbiosis), the authors propose a processual analysis of intergroup dynamics in post-merger integration.Design/methodology/approachThe research approach is a qualitative, longitudinal enquiry, which allows us to examine intergroup dynamics in two real-time merger case studies. The integration processes selected for this research include symbiotic integrations. Both integration processes were analyzed over two years, starting with the merger agreement.FindingsThis study sheds additional light on the triggers for achieving symbiosis integration by demonstrating the specific role and contribution of each of the parties (majority and minority) during the process. This study shows that post-merger is a process that follows different steps to reach symbiosis, involving majority/minority dynamics. The symbiosis implies minority innovation by adopting new business and organizational practices, mainly inspired by the standards and values of the minority. The study highlights innovation by the minority as a key element in achieving a symbiotic integration. This element can be understood by managers involved in managing the integration as a turning point in the integration process.Research limitations/implicationsThe authors investigated symbiotic integration in specific industries; questions can arise about the extent to which findings are transferable to other mergers and acquisitions contexts.Originality/valueThis study advances the understanding of the dynamics between the majority and minority in adopting a processual and longitudinal analysis. On that point, this study gains insights on the “black box” that represents post-merger integration process.

Postmerger Integration's Process Analysis and its Organizational Implications: Integrating Cemento Melón to Lafarge's Group

In NBFCs, post-merger integration process is one of the most decisive factors for long-term success and sustainable growth of mergers and acquisitions. The function of human resource integration organizational culture and perceptions of employees play important roles in determining the fate of such transactions. This study is concerned with evaluating post-merger integration threats in NBFCs with a special consideration of the people-oriented problems that affect organizational stability, employee morale and staff retention during the integration process. Referring to the available literature, this study investigates the roles played by organizational culture, leadership communication, employees' stress levels and HR practices on the effective integration of acquired firms. A model of sustainable development in NBFCs is suggested, focusing on the alignment of HR plans with organizational objectives, creating cultural compatibility and resolving employee issues pre-emptively. The study also examines how theory, e.g., the Psychological Contract Theory and Cultural Fit Theory, is used to control employee expectations and minimize resistance to change. By focusing on the human dimension of integration, the research offers practical recommendations for NBFC leaders and policymakers to reduce employee discontent, turnover and morale risks of the merger to ultimately realize the expected financial and strategic synergies after the merger. The findings also extend current understanding of the complex relationship between employee integration and organizational performance in the NBFC industry, with important theoretical and practical implications for M&A management.

Management researchers and practitioners point out that integration processes during the postmerger integration period are critical to synergistic effects and performance of the merged companies over time. However, the relation between the postmerger integration process, synergy potential exploitation, and its influence on mergers and acquisitions (M&A) deal success, especially in the case of international M&As, is not clear. Moreover, the results of empirical studies are inconsistent and even contradictory. Propositions regarding the postmerger integration process are presented in this paper and are exemplified by an in-depth exploration of Hungarian Biogal's acquisition by Israeli Teva Pharmaceutical Industries employing the narrative approach. In the discussion section, an analysis of the case in light of the propositions is presented, and further avenues for research are suggested.

PurposeThis paper aims to identify the role of language in international business context, especially in a post-merger integration (PMI) process, and to develop a framework for language strategies in a PMI context.Design/methodology/approachBased on the authors’ review and building on earlier works, this paper develops a conceptual model regarding the use of language in different PMI scenarios and identifies the key resource mix that may be suited for an effective deployment of language strategies.FindingsThe authors find that the use of a language at target firms depends on the degrees of strategic interdependence and organizational autonomy. They classify different constellations of targets in a PMI context and propose the most appropriate language strategies for different classification of PMI firms.Research limitations/implicationsThe authors develop five testable future research propositions based on our conceptual model. The paper is not without its limitations. The authors’ propositions need to be tested in future studies. It may be sometimes difficult to collect data based on all the four segments of firms using a quantitative design. It is also challenging to investigate about the language used at the target firms using quantitative designs.Practical implicationsThe authors’ model has several practical implications for the managers. Bidder firm’s managers can decide the use of appropriate language depending on their acquisition strategy. It is very likely that target managers have to change the language following the acquisition, and because of this change, influence on their routines will be significant. This issue becomes most important if both firms do not speak the common corporate language – English language. The authors bring ideas for a best fit, which are applicable not just for merger and acquisition but also for other strategic sourcing areas such as outsourcing strategies.Social implicationsThere are several negative emotions that are invoked through language. Language is also power laden and affects social structure and group dynamics at work. By addressing the use of appropriate language strategies, people can potentially avoid the dark side of language.Originality/valueThe authors present testable propositions for future research in a PMI context.

PurposeDespite best intentions, mergers and acquisitions often do not live up to the expectations for performance. This study examined how the salience of multiple identities creates dynamics in postmerger integration processes and how these dynamics influence the acquisition of the target's capabilities.Design/methodology/approachThe authors conducted an in-depth case study of a large American consumer goods multinational corporation's acquisition of a family-owned German beauty business and examined responses to decisions and events during the postmerger integration process.FindingsThe results show how and why efforts to acquire unique target capabilities might not deliver the hoped-for results. The authors discovered multiple identities that became salient during the postmerger integration process which subsequently influenced interpretations and reactions to decisions and events and which created intergroup dynamics. The authors also noted the role of language in making these identities salient. Such dynamics pose challenges to managing the postmerger integration process and to acquiring sought after capabilities.Originality/valueThis study reveals how different identities become salient in the interpretation of particular events and decisions, resulting in emotional and behavioral reactions and intergroup dynamics. Furthermore, it uncovers the role of language in making identities salient. This study offers further insight into identity dynamics when the capability of the target firm is the motive of the acquisition.

In this paper, we develop theory on how the English language fluency of groups of employees influences the post-merger integration process in international business contexts. Drawing on a real-time qualitative analysis of the post-merger integration between a French and Dutch airline, we observed that language fluency directly moderated the sensemaking of groups of employees, and thus their ability to understand the rationale for the merger and to support the integration. Employees with higher levels of fluency were better able to build up common ground around the merger and to proceed with the integration, whereas employees at lower levels of fluency were more skeptical or even actively resisted the merger. We label these processes as transformational, compliant, and resistant sensemaking at the level of groups, and demonstrate how these processes affect the speed and ease of the post-merger integration process as well as the formation of a collective identity. Based on our findings, we also discuss what...

PurposeThis paper aims to examine post-merger integration (PMI) through the lens of paradox to determine how paradoxes contribute to successful integration. Although PMI has been identified as crucial to understand merger success or failure, the literature on PMI drivers remains inconclusive.Design/methodology/approachDrawing on the theory of paradox and two key elements of PMI, strategic interdependency (SI) and organizational autonomy (OA), the authors describe the merger of two listed French companies using longitudinal data.FindingsThe authors identify how the paradox between OA and SI was triggered and fostered PMI success by leading to symbiotic integration. They also show that two capabilities were central in helping the paradox to evolve: preserving the specificities of the organizations and pooling their respective capabilities. These capabilities result from basic decisions and actions during the integration implementation, such as highlighting the expertise of the target firm, refocusing the core activity while valorizing each company’s expertise, clarifying the identity of the new organization on the market and enhancing joint piloting and transferring both general management capacity and functional abilities during the reorganization period.Practical implicationsThe authors offer several useful insights for managers trying to manage paradoxical tension throughout the merger process. This study encourages managers to embrace inconsistencies as they make decisions and to shift to dynamic decision-making as a way to adapt to complex contexts.Originality/valueThis study adopts a global and inclusive approach to focus on OA and SI and flesh out a picture of the integration process. It proposes a dynamic process model to conceptualize the stage-wise nature of the PMI process by highlighting the interrelations between OA and SI dynamics.

Empirical evidence shows that firm Mergers and Acquisitions (M&A) have a high failure rate. However, most studies use financial or strategic indicators to measure this rate, largely leaving employees out of their considerations. The situation in a firm can become critical when highly qualified yet dissatisfied specialists in Research and Development (R&D) units depart following such transactions, because the firm ultimately loses innovative capacities. This article contributes to the debate by investigating the determinants of job satisfaction of R&D employees and their effects on employee turnover during the postmerger integration process. Based on a partial least squares structural equation model, it emerges that high job satisfaction serves to prevent employee turnover and thus the loss of innovative capacities. Determinants for high job satisfaction are income security, the quality of integration achieved and the handling of the integration process in such a way as to avoid feelings of insecurity among employees.

Management researchers and practitioners point out that integration processes during the post-merger integration period are critical to synergistic effects and performance of the merged companies over time. However, the relation between the post-merger integration process, synergy potential exploitation, and its influence on M&A deal success, especially in the case of international M&A, is not clear. Moreover, the results of empirical studies are inconsistent and even contradictory. This chapter adds to the existing body of knowledge by developing a model, based on the analysis of the acquisition by Teva Pharmaceuticals of the Hungarian Biogal and of the Dutch Pharmachemie. The model addresses the key factors such as the effect of corporate culture differences, and synergy potential between the acquiring and acquired firms on the international M&A performance.

In this study, we examine how supervisor-employee social relationship in the advice-seeking and giving network influences employee’s perception of the post-merger integration (PMI) process. Using leader-member exchange and social network theory perspectives, we also investigate the moderating roles of a supervisor’s positions in the informal network structure (supervisor advice network centrality, supervisor advice network brokerage) and supervisor’s communication and energizing abilities on this influence. We argue that supervisor-employee informal connection in the advice-seeking and giving network positively affects employee perception of the post-merger integration process; and this positive influence is conditional on whether the supervisor i) occupies a central or ii) brokerage position in the informal network structure; iii) can effectively communicate with his or her employees; and iv) can generate energizing relationships with his or her connections. We present corroborating evidence for these four moderating factors through a sample of supervisor-employee pairs who are current employees of a new merged professional services firm.

Postmerger integration processes have been studied from the perspectives of organizational identity and organizational culture, but these two perspectives have rarely been integrated. We argue that organizational identification and organizational culture differences give rise to two different sets of individual responses that are both important, but for different types of outcomes. An empirical analysis of a large-scale merger between two service sector companies shows that identification with the postmerger organization positively relates to both behavioral intentions and key attitudinal variables. In contrast, our results show that perceived organizational culture differences are negatively related to attitudinal variables. The effect of perceptions of cultural differences on behavioral intentions is mediated by organizational identification.