Understanding the Human Side of Merger and Acquisition

Abstract

In this article, the authors identify six theories (anxiety theory, social identity theory, acculturation theory, role conflict theory, job characteristics theory, and organizational justice theory) to explain problems in managing the merger and acquisition (M&A) organizational change process. These theories have implicitly or explicitly formed the basis for the past M&A literature. The authors integrate these theories into one conceptual framework that clearly delineates unique sources of problems that can emerge in different stages of M&A integration, their psychological and behavioral effects on employees, and prescriptions to address the problems. The framework can be used as a guide for M&A integration leaders to systematically plan interventions to smooth the human integration process. It also provides a foundation for future theoretical and empirical M&A integration research.

Weakened Agents of Strategic Change: Negative Effects of M&A Processeson Integration Managers

“…Against this background the current study set out to make an in-depth and structured analysis of how integration managers perceive post-acquisition processes. More specifically, a substantial acquisition in the Swedish bakery industry was studied using a framework developed by Seo and Hill (2005) summarizing the effects which M&A have on employees. This allows drawing some important conclusions.…”

“…If little support is found for the notion that integration was conducted unfairly or perceived that way an additional factor not included by Seo and Hill (2005), nor given much notice in other integration literature, stands out in data and can be added as a seventh category. This refers to the workload that came with the integration.…”

“…The framework by Seo and Hill (2005) was applied as it offers a structured means of analyzing effects of M&A on managers, distinctly separating the six problems which have been found to occur. The analytical benefits however risk hiding that problems appear as anything but distinct.…”

“…However, insights thereby have remained fragmented within separate schools of thought. One effort to bring insights togetherand to create a more consistent knowledge base is offered by Seo and Hill (2005). Based on a thorough literature review six problematic areas to employees in integration processes are condensed, described, and explained, offering a structure for analyzing social effects of M&A that should be applicable not only on employees, but also on managers.…”

“…Given the approach of this study and the width of the challenges which can appear in M&A, the framework developed by Seo and Hill (2005) offers a good starting point for a structured analysis of the effects that M&A processes can have on managers. In the following I turn to how this study has been designed to pave the way for that analysis.…”