General introduction

Mirvis, 1998; Empson, 2000). The list can be made long. Schweiger, Ivancevich and Power (1987) and Haspeslagh and Jemison (1991) describe an atmosphere of fight for survival and self preservation, leading to increased competition between individuals in the new organization.

Schweiger et al (1987) argue that resistance can be passively or actively expressed, but they do not discuss this distinction further or investigate it. The expressions that personnel resistance can take in M&A are, generally, rather thoroughly described, but suggestions regarding to a categorization scheme for the continued analysis of reactions in this setting, are lacking.

Furthermore, Schweiger et al (1987) claim that when employees can no longer identify with their organizations, they can experience a loss of ego, or damaged self image, causing them to passively or actively express their resistance. Reactions are described as irrational, dysfunctional, but still often as normal in terms of human behaviour.

You easily get the impression that only management is rational and free from these “limitations” of the human mind, while personnel are subject to a number of more primitive, instinctive behaviours.

Why does resistance occur? According to Jungerhem (1992), explanations can be strategic or operative. Strategic reasons relate to the choice of merger partner. Operative reasons relate to how management has chosen to integrate the merging organizations and handle personnel. Traditionally, explanations have referred either to the financial field, or the strategic field (Buono & Bowditch, 1989; Larsson och Lubatkin, 2001). Since then, there has been, as mentioned, an increasing focus on the human side of M&A. Many researchers (e.g.

Cartwright & Cooper, 1993; Nahavandi och Malekzadeh, 1988;

Shrivastava, 1986) have claimed that the ability to integrate organizational cultures is a key to success. Culture, communication and career are three common themes for explaining resistance, as Chapter 1 indicated. There are, however, also explanations that do not fit very well into these categories.

Empson (1994) claims that an explanation for personnel resistance in M&A could be a fear of being exploited or contaminated. By exploited, she refers to organizational resources, and by contaminated she refers to

the two parties’ reputation on the market. In a similar fashion, Panchal and Cartwright (2001) describe how personnel’s attitude to M&A partly depends on their possibilities to improve social identity.

Larsson (1990) claims that trust is of crucial importance in M&A. In the first part of the integration process, it is often seen as the internal distribution of a big cake and therefore it leads to co-operation, but if confidence in the merger partner is damaged, the focus on the distribution will increase. Personnel will then find it better to strive for as large a piece of the cake as possible, rather than to work for an increase of the whole cake. The reason is that they do not know if the merger partner will only strive to maximize their own share.

Walter (1985) explains personnel resistance in M&A as a balance that is displaced. In an organization, he argues, wishes concerning human rights and wishes concerning property rights are balanced. M&A represent the exercise of power in the area of property rights and due to this, balance between the two extremes will be displaced. Humanitarian values, such as freedom, safety, right of self-determination, identity, have to step aside. Instead values such as segregation and being interchangeable increase and cause discomfort among personnel.

Haspeslagh and Jemison (1991:122ff) argue that lack of success in M&As normally can be explained with one or several of the following three factors.

• Determinism. Lack of ability to recognize that the initial strategic justification of the acquisition is no longer valid.

• Value Destruction. Loss of psychic and/or economic value for individual managers and employees, following the acquisition.

• Leadership vacuum. Lack of good leadership in the integration phase.

These authors argue that M&A will always result in loss of psychological values in the two organizations, in turn leading to a loss of motivation. The three factors provide a comprehensive overview of explanations presented in M&A theory. Issues of identity can be included in the second category.

Surprisingly, there are few studies focused on the formal organization of the merger process, including the decision making process, key actors, implementation schemes, preliminary groups. According to Gaertner (1986), the ideal merger is based on egalitarian status among participants. Blake and Mouton (1985), too, emphasize the value of autonomy for personnel. Liu and Fehling (2006) argue the opposite, claiming that a preliminary autonomy removal “constitutes an effective way to counter resistance”. The adverse behavioural effects (reported by, for example, Gaertner, 1986), may actually be “side effects of the power asymmetries inherent in such strategy.”, Liu and Fehling (2006:382) argue. Autonomy removal is described as “the restriction or outright elimination of post-merger autonomy from one or more of the participating organizations.” (Liu and Fehling, 2006:362.

The concept of coping is sometimes used in M&A theory (e.g Fulmer

& Gilkey, 1988; Liu & Fehling, 2006), but also in other parts of organization theory (e.g. Kinicki, Prussia, McKee-Ryan, 2000; Fried, Tiegs, Naughton, & Ashforth, 1996). It is related to resistance, in the sense that it forms its positive counterpart: a way for the individual employee to handle stress and uncertainty in a merger. Concept and theory have been borrowed from social psychology. Although this field in general has often contributed to M&A theory, the context of M&A has seldom been subjected to studies in social psychology (Fugate et al, 2002). Fugate et al (2002:906) write:

Despite of the pervasive nature and widespread effects caused by mergers, little research has examined the process by which people cope within this highly relevant context.

Exceptions are, for example, Amiot, Terry, Jemmisson, and Callan (2006), Fugate et al (2002) and Terry, Callan, and Sartori (1996).

A concept closely related to coping, is adaptation. This refers to how employees adapt to changes in the work place in order to cope with uncertainty and stress (Lazarus & Folkman, 1984). Emotion and control are other phenomena that have been found to be of importance in this realm.

There are two types of coping strategies, say Latack and Havlovic (1992, according to Fugate et al, 2002): Problem-focused coping and

emotion-focused coping. The former strategy implies taking action to change what is found disturbing in the environment. With the latter strategy, the employee attempts to change his or her own emotional reactions. Lazarus and Folkman (1984) argue that perceived control has a strong influence on employees’ coping strategies. The proportion of problem-focused and emotion-focused coping partly depends on how controllable the employee finds his or her job situation. Problem-focused coping is more likely in situations where there is some level of perceived control, as this control is a prerequisite for action (Lazarus &

Folkman, 1984). Furthermore, problem-focused coping has been found to predict job satisfaction (low resistance) and also identification with the new, merged organization (Amiot et al, 2006).

As for changes in coping strategies, a merger study by Fugate et al (2002) did not support a hypothesis stating that relative levels of problem-focused and emotion-focused coping should change over time.

Depending on the level of analysis, resistance in M&A is often explained in terms of culture (collective level), communication (interpersonal level) or career (individual level). These three aspects are described in the following three sections.