Communication Processes and Merger Success

Abstract

This study examined in three phases whether managerial communication processes differ in more and less successful mergers. In Phase 1, employees at four recently merged financial institutions were interviewed, and published accounts of mergers were reviewed to develop several broad hypotheses regarding how managerial communication activities (participative, supportive, informative, and directive) influence merger success during each stage of merger implementation. Next, criteria were established to assess the human resource dimension of merger success, and an instrument was developed to identify two more and two less successful recently merged financial institutions. In Phase 2, the hypotheses were tested, using a pattern matching multiple case study. None of the four managerial communication processes consistently occurred more frequently in the more successful mergers. In Phase 3, several contingencies were identified which appear to influence the communication needs of employees in acquired organizations. These relate to particular merger stages, settings, message characteristics, and inferences about communicators.

Readiness for Change: An Institutional Perspective

“…This view is consistent with the notion of readiness for change that bears a more positive approach than the concept of resistance to change (Armenakis and Harris, 2009). Indeed, whereas most research on mergers and acquisitions has pointed to cultural differences as a major reason underlying failed mergers (e.g., Buono, Bowditch, and Lewis, 1985;Cartwright and Cooper, 1993;Chatterjee, Lubatkin, Schweiger, and Weber 1992;Datta, 1991;Sales and Mirvis, 1984;Walter, 1985;Weber and Schweiger, 1992;Weber, Shenkar, and Raveh, 1996), and while several researchers have highlighted the need to communicate effectively during transformations (Armenakis and Harris, 2002;Cornett-De Vito and Friedman, 1995;Demers et al, 2003;Heracleous, 2002;Kotter, 1996;Schweiger and DeNisi, 1991), including mergers and acquisitions (Vaara, 2002), little is known of the ways in which managers can use language to emphasize similarities between two merging organizations.…”

Organizational Identification During a Merger: Determinants of Employees' Expected Identification With the New Organization*

“…In a longitudinal field experiment, Schweiger and DeNisi (1991) found that the quality and amount of communication about a merger reduced employees' perceptions of dysfunctional outcomes of the merger and contributed to the employees' commitment. Cornett‐DeVito and Friedman (1995) investigated the relationship between communication and merger success in four organizations but did not find a clear relationship between the two. Bachman (1993) investigated the impact of management communication on identification with the merged organization, again without significant results.…”

Merger and acquisition announcements as corporate wedding narratives

“…Numerous researchers (Cornett-De Vito and Friedman, 1995;Schweiger and DeNisi, 1991) have observed the communicational dimension of M/As and mentioned the need to send the proper messages to employees, but to date there has been little research on the implementation of change that specifically analyzes how managers announce and legitimize future changes to employees (Smeltzer and Zener, 1993). Overall, little is known about the basis of legitimation invoked and the discursive strategies used to announce a major strategic change with potential negative ramifications.…”