A Recursive Perspective on Discursive Legitimation and Organizational Action in Mergers and Acquisitions

Abstract

This paper challenges the predominant view that legitimation is merely a specific phase in merger or acquisition processes. We argue that a better understanding of postmerger organizational dynamics calls for conceptualization of discursive legitimation as an inherent part of unfolding merger processes. In particular, we focus on the recursive relationship between legitimation and organizational action. We have two objectives: to outline a theoretical model that helps one to understand the dynamics of discursive legitimation and organizational action in postmerger organizations, and to examine a revealing case to distinguish the inherent risks and problems in discursive legitimation. Our case analysis focuses on the merger between the French pharmaceutical companies BioMérieux and Pierre Fabre. We adopt a critical multimethod approach and distinguish specific discursive dynamics and pathological tendencies in this case. The analysis highlights the unintended consequences of discursive legitimation, the central role of sensegiving and sensehiding in discursive legitimation, the inherently political nature of legitimation and the risks associated with politicization, the special problems associated with fashionable discourses and the role of the media, the use of specific discursive strategies for legitimation and delegitimation, and the crucial role of actual integration results. This analysis adds to the existing research on mergers and acquisitions by treating discursive legitimation as part of the merger dynamics. In particular, our case analysis provides a new explanation for merger failure. We also believe that the recursive model connecting discursive legitimation and delegitimation strategies to concrete organizational action makes a more general contribution to our understanding of organizational legitimation.

The Process of Postmerger Integration: A Review and Agenda for Future Research

“…Exceptions are offered by Vaara and Monin (2010), who studied the dynamics of discursive legitimation in PMI and highlighted the risk that overly positive communication can lead to a legitimacy crisis; and by Vaara and Tienari (2011), who examined how organizational actors and the media used various discursive resources and forms of storytelling to impact the course of PMI. On the whole, however, we know little regarding communication practices and tools in PMI.…”

“…Similarly, in the PMI context, senior managers -particularly from the acquiring firmwill need to devote attention to external parties like industry analysts, shareholders and the media (Vaara & Monin, 2010;Vaara & Tienari, 2011). Acquirers often make predictions to shareholders and industry analysts regarding synergies that will be realized from an acquisition, and senior management will likely be focused on achieving those targets.…”

Collective Memory Meets Organizational Identity: Remembering to Forget in a Firm's Rhetorical History

“…Yet remembering and forgetting are two sides of the same memory phenomenon. Like voicing and self-editing (Bernstein, 1964;Chafe, 1980), sensegiving and sensehiding (Vaara & Monin, 2009) or learning and un-learning (Brunsson, 1998) (Anderson & Bjork, 1994;Anderson & Spellman, 1995;Douglas, 1986;MacLeod & Macrae, 2001;Misztal, 2003).…”

Knowledge Sharing Challenges during Post-Merger Integration: The Role of Boundary Spanners and of Organizational Identity

“…Their intent was likely a transformation PMI approach. It has been suggested that this approach is not efficient because the available PMI time is often insufficient and the identification of the necessary ISs could create resistance and political struggle (Wijnhoven et al, 2006;Vaara & Monin, 2010). Suncorp and Promina had multiple IT applications, each with its own practices and knowledge bases.…”

“…Post-merger integration (PMI) is the process of actual merger value-creation that will hopefully materialize when the organizations are amalgamated (Larsson & Finkelstein, 1999). Despite the anticipated benefits of a merger, high failure rates have been reported (Yetton, Henningsson, & Bjorn-Andersen, 2013), which suggests inherent complexities in managing PMI (Mehta & Hirschheim, 2007;Vieru & Rivard, 2014b) and associated challenges that are yet to be fully understood (Vaara & Monin, 2010).…”