Giessner, Steffen

Humborstad, SIW

Solberg, E

English

EUR Research Repository

CoMMUNtcATLoN FoR LEADERS NR. 2 2015Key to SUCCESS/\^ergersItonstSUnCCommunication may help employees to formrealistic expectations of what is happeningin the different stages of mergers and acquisittons,Associate professor Sut I WongHumborstãd, Professor SteffenRobert Ciessner (Rotterdam Schoolof Manasement. Erasmus Univer-sity) and"PhD candidate ElizabethSolbergE-mail: sut.i.w.humborstad@bi.noMergers and acquisitions (M&As) are in-creasingly used as a strategic means for com-panies to gain a competitive advantage. lnfact, the use of M6As to achieve advantagessuch as knowledge capital, international mar-ket penetration, and economic synergies areconsidered inevitable in today's global busi-ness environment.However, MEAs are one of the most ex-treme forms of organizational change andapproximately half of M&As fail to achievetheir anticipated outcomes. The dysfunction-al impact of a failure is not only evident inorganizational outcomes such as reducedproductivity and market reputation but alsoin the reduced well-being of organizationalmembers. This is reffected in increased jobinsecurity and stress.WHY DO SOME M&AS SUCCEED,AND SOME DON'T?The success and failure of M&As dependcrucially on the integration process. A syste-matic review of existing empirical studies onthe management role in facilitating the MEAprocess stresses the importance of organiza-tion sense-making and expectation manage-ment during such process.Expectations are a key element in whatinffuences employees' response to changes.The perception of how MEA integration oc-curs is thought to trigger a comparison ofperceived experiences as "better than" or"worse than" expected. When experiencesfall short of expectations (negative discon-firmation), this fosters disappointment andreduces satisfaction.THREE KEY ISSUES:1. Communicate what could be expec-ted throughout the processThrough communication, organizationscan convey the merger or acquisition'sstrategic direction to employees andcorrect any misconceptions and expec-tations underway, making communica-tion important for MtA success.ln particular, communication onthe evolving stages and changes as-sociated with M&As not only pro-vides employees with assurance andan ability to make informed choices,but it also helps employees to formexpectations of what is happeningin the different stages of M&As.For example, prior to a merger or acquis-ition firms can communicate to theiremployees about the practical plan oflhe strategy, future direction, and po-tential cultural changes associated withthe new (combined) entity. Once themerger or acquisition is accomplished,firms can also involve their employeesand inform them about the integrationprogress and strategic direction.2. Enable not only top-down, but alsobottom-up communication via variousmediaVarious media can be used to share uP-to-date information about what is happen-ing with the M&4, including face-to-facecommunication, company newsletters,video displays, and various social media.8-Studies confirm that firms that provided arealistic merger review program by whichemployees were informed using differentmeans of communication experiencedgreater employee job satisfaction and or-ganizational commitment and reduced,iobuncertainty. Beside a top-down approach,other evidence shows that communicationprocesses that enable employees to raisetheir concerns regarding the M&A con-tribute signifrcantly to successful integra-tion.viduals to function and in the context ofprofound organizational transformationsuch as MEAs, providing a meaningfulrationale and acknowledging conff ictingfeelings foster employee acceptance oforganizational change.REFERENCE:Humborstod, S. l. W., Solberg, E., Junni, P., eCiessner,5. R. (/n press). The role of HumonResource Manogement Proctices in Mergerse Acquisitions. ln 5. Torba, C. Cooper e R.Sorola (Ed.) Mergers and Acquisitions inPractice, UK: Routledge.ln addition, communication can minimizepotential misconceptions by spelling outwhat the human resource practices meanfor them during a merger or acquisition.For instance, if organizations can get em-ployees to see how the intended HR ob-jectives/practices address their concerns,it is more likely that employees will re-spond positively toward the M&4.Underestimating the potential effect ofcommunication for social integration mayjeopardize the intended outcomes of theMEA. ln this integration process, manage-ment should provide strategic guidance toline managers on how they should com-municate the meaning of the M6A anddesired post-M&A organizational cultureand identity. lt is easier said than done,communication during M&As is complexand contingent upon the situations. Ne-vertheless, research seems to agree thatcommunication during the MEA process,including pre-, during, and post-integra-tion has a great impact on MEA success.3. Talk about "why"The perception of meaningfulness totheir own situation is important for indi-9_

Key to Success in Mergers &amp; Acquisitions

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Key to Success in Mergers & Acquisitions

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Key to Success in Mergers &amp; Acquisitions

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Key to Success in Mergers & Acquisitions