Multicultural teams’ post acquisition : Challenges for employees and managers

Multicultural

teams’ post

acquisition

MASTER DEGREE PROJECT THESIS WITHIN: General management NUMBER OF CREDITS: 15

PROGRAMME OF STUDY: Engineering management AUTHOR: Klara Ewald & Philip Wredberg

JÖNKÖPING May 2021

i

Master Thesis/ Degree Project in General Management

Authors: K. Ewald and P. Wredberg Tutor: Jonas Dahlqvist

Date: 2021-05-24

Key terms: Mergers and Acquisitions, Post-Acquisitions, Team Development, Successful Teams. Multicultural Teams, Management

Abstract

Today’s fast-paced and global market has added pressure on firm’s to constantly strengthen their competitive advantage. Over the last couple of years, mergers and acquisitions (M&A) have become an increasingly used strategy for firms to acquire resources that cannot be developed internally. However, M&As often fail to achieve the initial purpose. The purpose of this study was to investigate two research questions; RQ1: What are the effects on employees

in a newly created multicultural team that is the outcome of a merger between two firms? and RQ2: How can managers manage these effects, in order to create a successful team integration?

To gain understanding of the phenomena, and their respective connections, qualitative research has been conducted. Through a multiple case study design, and data collection in the form of interviews, empirical data was obtained. In total eight interviews were conducted with individuals originating from different roles and acquired firms. Their experiences and emotions were later analysed through thematic analysis and coding.

The findings of this study add an additional layer to the conclusions of previous studies within the area of multicultural team integration, post-acquisition. Well-communicated integration strategies have been deemed important; this study confirms that statement. However, the findings of this study provide evidence that transparency should be considered an important dimension of the communication strategy, in order to increase employee satisfaction.

ii

Table of Contents

1.

Introduction ... 1

2.

Theoretical frame of reference ... 5

2.1 Mergers and Acquisitions ... 5

2.2 Post-acquisition integration ... 6

2.3 Sociocultural integration ... 8

2.4 Creating teams ... 9

2.5 Multiculturalism and managing multicultural organisations ... 9

2.6 Research model and questions ... 10

3.

Method ... 13

3.1 Research approach ... 13

3.2 Research design ... 14

3.3 Research methods ... 15

3.3.1 Data collection methods and techniques ... 15

3.3.2 Development of interview guide ... 16

3.4 Data analysis ... 17 3.5 Trustworthiness ... 19 Credibility ... 19 Transferability ... 19 Dependability ... 20 Confirmability ... 20 3.6 Ethical considerations ... 20

4.

Results ... 22

iii

4.2 Theme #2 – Teams ... 26

4.3 Theme #3 – Multicultural teams ... 28

5.

Analysis ... 32

5.1 Theme #1 – Post-acquisition phase ... 33

5.1.1 Integration management ... 33

5.1.2 Communication ... 34

5.2 Theme #2 – Teams ... 36

5.2.1 Team building philosophy ... 36

5.2.2 Conflict management ... 37

5.2.3 Motivation management ... 37

5.3 Theme #3 – Multicultural teams ... 38

5.3.1 Multicultural team philosophy ... 38

5.3.2 Multicultural work environments ... 39

5.3.3 Managing multicultural teams ... 39

5.4 Conclusion ... 40

6.

Discussion ... 43

6.1 Relevance and validation of the study ... 43

6.2 Managerial implications ... 44

6.3 Limitations ... 44

6.4 Future research ... 45

iv

Figures

Figure 1 Types of acquisitions (McKiernan & Merali, 1995) ... 6 Figure 2 Phases and events during a M&A (DePamphilis, 2010) ... 7 Figure 3 Level of integration within the post-acqusition phase

(DePamphilis, 2010) ... 8 Figure 4 Research model of multicultural teams in the post-acqusition phase ... 11 Figure 5 The research timeline ... 14 Figure 6 Idenftified categories, themes and sub-themes, related to the

theoretical frame of reference and emperical results ... 32 Figure 7 Updated research model ... 40

Tables

Table 1 The interviewees, their profession and length of interview ... 16

Appendix

Appendix 1 Topic Guide of interview questions ... 52 Appendix 2 Coding process example ... 53

1

1. Introduction

The introduction chapter begins with presenting the background of the chosen topic. It continues with the problem statement, and finishes by stating the aim as well as the delimitations.

1.1 Background

The modern industrial society rests on a couple of keystones, one of them being large companies with the purpose of producing goods and services to their environment (Ansoff, 2007). Another purpose of profit-seeking companies is to create value for stakeholders and customers. In order to create value, firms need to constantly adapt, develop and seek for new opportunities. The long-term development of a firm can be described with the term strategy, which includes several different elements, one of them being, how resources are to be acquired and managed in order to uphold value creation

and survival (Duane Ireland & Webb, 2007). Related to both value creation and a firm’s

long-term development are mergers and acquisitions (M&As), which can be seen as a tool for corporations who intend to develop organisational capabilities that cannot be acquired internally (Jemison & Haspeslagh, 1991). In the research by Meglio and Schriber (2020) an acquisition occurs when a firm (generally referred to as the bidder) purchases another firm (generally referred to as the target). Jemison and Haspelagh (1991) define an acquisition as a resource allocation decision.

For many years, companies have started to become more global since international trade, innovative technologies, and the desire to grow has increased. The phenomenon of globalisation has become increasingly important for companies, as they want to increase connections, economy, culture, and social environment, so that their competitiveness can sustain (Senft, 2013). The increasing economic growth and the cooperation between countries and cultures can be defined as globalisation, where the networking of different markets as well as mobility and capital are spreading over national borders. The increase of business and interactions internationally creates profit-based organisations that are confronted with global influences and challenges. Alongside the increased globalisation over the past decades, the use of mergers and acquisitions has increased. Acquiring companies and expertise has become a valuable tool for companies’ ability to grow. It has been a way for organisations to improve their way of working and performing in which they try to enter into new markets, share costs and ensure themselves against environmental uncertainties. At a fundamental level, the goal of a M&A is to create value. This is accomplished when the acquisition of a firm enhances the strategic capabilities of the two combined firms, i.e., improving both or one or the others strategic position, which in the end should produce positive financial results (Haspeslagh & Jemison, 1991; Kohler, 2015).

2

Throughout the research that have been done regarding M&As, the focus has usually been on economy and financial results. In recent years though, the research revolving around M&As has added an employee-based focus (Buiter & Harris, 2013). Studies have found that one third of the employees that are working in a firm at least one time in their work-life will go through a merge or acquisition of their workplace. It affects the people working for the firm and the people owning the firm (Risberg, 2013). Additionally, M&As affect employees in a problematic way since they increase the level of stress and anxiety for the employee (Buiter & Harris, 2013).

Adopting an employee-based focus further leads this research to introduce the concept of

sociocultural integration (Choi & Chang, 2009). Specifically, the focus will be on team

integration and how consequences of globalisation such a multiculturalism affects it. Cheng et al. (2012) states that the early stages of team formation are important when creating a team with cultural differences and different backgrounds. They present that when new team members meet each other for the first time to exchange knowledge and information, the focus that most employees usually have is to promote harmony and mutual acceptance. However, when members experience unfamiliarity with other cultures it usually creates uncomfortable feelings and for many it is anxiety-generating. Intercultural understanding is often difficult to build due to difference in opinions, ideas, norms, values and perspectives. These differences can affect the work performance and the atmosphere in the team as they are supposed to perform their first task. At this stage it is important for the manager or the leading person to make sure that members communicate, even though, as a manager or a leader this can be problematic, uncomfortable and can create increasing levels of anxiety as problems and situations that are hard to manage can occur.

1.2 Problem statement

The failure rates of M&As are generally high, especially in a trans-national context (Khan et al., 2020). This assumes that the M&A is being used as a means to increase overall performance and strategic position (Buiter & Harris, 2013) and not just as a tool for calculated empire building based on the irrational hubris of a CEO. Research in the field of mergers and acquisitions has revealed that corporate take-overs commonly generate negative effects on employees, such as stress and anxiety (Buiter & Harris, 2013). Adding to that fact, research has also revealed that the average time for an acquisition process is three years (Meglio & Schriber, 2020), and that one third of the population, at least once in their life will go through such a process (Risberg, 2013). Even though these are well-known facts within the research community, research regarding M&As have mainly been focusing on the financial aspects. In recent years though, the focus has shifted from the financial aspects to a more employee-centred perspective. Studies with this perspective has shown that organisational leadership and human resource management can help mitigate the negative effects that many employees experience. This fact should be

3

interesting for managers managing M&As since another fact is that employee satisfaction correlates with the success of the post-merger integration process (Khan et al., 2020). CEO’s and shareholders try to capture value, instead of trying to create value (Jemison & Haspeslagh, 1991). The high failure rates can also stem from the fact that most M&A managers see the pre-acquisition decision process as crucial. That is true, however related to the whole process of an acquisition, the post-merger integration process could be considered the most crucial part. It is during the integration process that you have the opportunity to build and to create value (Jemison & Haspeslagh, 1991). The high failure rates related to M&As could also be deduced to the fact that only in recent years, the correlation between employee satisfaction and acquisition success has been identified (Khan et al., 2020).

Today’s organisations and teams are diverse, disperse, digital and dynamic. It is therefore important to understand that what matters when creating such a team is that it is not necessarily the personalities or attributes that are the most crucial. The important part is to understand that the team need to thrive towards a common goal. To not have the us

versus them mentality (Hass & Mortensen, 2016). The challenge of having teams that

consist of people from different cultures coming together, is not only lack of social connection, but can sometimes be the cause of miscommunication, misunderstanding and distrust (Neelay, T, 2015). It is important to understand as well as consider the impact multiculturalism has on the team performance. It is of importance to understand that organisational cultural differences are based on personal history and experience. That are shared by the members in the organisation. Where each member’s personal behaviour forms the organisation’s culture. Many organisations with a wide spread of differences co-exists with the national culture. As it is known that members of a team that are from the nation they are working in, often are more homogeneous to the national culture. This is because they all belong to the similar educational and socioeconomic subgroups (Halverson & Tirmizi, 2008).

There is a lack on research on the topic of multicultural teams in post-acquisitions (Stahl & Voigt, 2008). Especially, how managers handle the situation of post-acquisitions. When ventures join and members of already existing teams has to start working together, without knowing each other from the beginning. This research can be of use for companies that are striving to broaden their knowledge when working with multicultural teams and joint-ventures, post-acquisition.

4 1.3 Purpose

In the background chapter, concepts such as M&As, multiculturalism and teams are presented. In the problem statement above, it is presented that M&As is a widely used concept for strengthening a firm’s competitive advantage. However, research shows that these procedures generally have high failure rates, especially trans-national mergers. Therefore, this study aims to:

Highlight the challenges when managers integrate multicultural teams post acquisition.

To achieve the purpose of this study, the report will revolve around two research questions which will be further presented at the end of chapter 2. Theoretical frame of reference. 1.3.1 Delimitations

The following delimitations will define what aspects, factors and variables that will not be included in the investigation.

The first delimitation is that this study is limited to exploring the post-acquisition period in M&As. Consequently, this report will not cover the aspects of the pre-acquisition period. This is since team development, and the creation of teams are done in the post-acquisition integration period. The pre-post-acquisition period mainly includes decisions, transactions and general planning. Which does not connect with the actual craftmanship of managing the merger between two teams or organisations.

The second delimitation is that the empirical findings will be purely based on trans-national mergers. The purpose of this study can essentially be dissected into three building blocks, post-acquisitions, successful teams, and multiculturalism. The last building block is the reason for using the case of an international firm buying a Swedish firm. This report does not cover examples of national mergers between firms or teams.

The third delimitation covers the actual learning outcome of the study, which is aimed at managers and how they could manage the post-acquisition integration period in order to create successful teams. As been mentioned above, a successfully managed integration should result in a profitable acquisition. However, this study focuses on what the acquisition manager can do to increase the chance of success.

The fourth and last delimitation revolves around the level of integration (three different levels of integration will be explained in the theoretical frame of reference chapter, 2.2

Post-acquisition integration). This research focuses on the sociocultural integration, and

the integration of employees. Thus, optimal integration strategies for processes or assets will not be covered in this study.

5

2. Theoretical frame of reference

This chapter of the study presents previous research on the topic. Together with the theories that has been used in this study.

A literature study was conducted to gain knowledge of the chosen topic. Suitable keywords were identified in the search for relevant previously published articles, as well as academic articles, books and reports. Key words that were used to find relevant literature included; Mergers and acquisitions, Multicultural teams, Creating teams,

Creating multicultural teams, Creating effective teams, Diverse teams. Additionally,

different synonyms and formulations were used to refine and extend the search.

To organise the literature and articles chosen, several documents were developed to get an overview. The overview presented the main themes and topics. At the same time of the literature study, new topics were raised which resulted in additional searches. These additional search words extended the literature study. A snowball approach was developed to enable the research to look deeper into other references.

Primo was the most used database to find literature. As well as Jönköping university library. All literature was evaluated based on different criteria, such as abstract, topic, the journal it was published in as well as content to a certain extent. The research that has been found through the literature review shows that there is a gap in the research regarding development of multicultural teams in a post-acquisition phase. There are a couple of studies that presents research about integration strategies post-acquisition. However, they suffer from focusing purely on the creation of teams that are integrated to become a multi-cultural team.

2.1 Mergers and Acquisitions

The definition of an acquisition according to Meglio and Schriber (2020) is that an acquisition occurs when a firm (generally referred to as the bidder) purchases another firm (generally referred to as the target). Mergers and acquisitions are usually seen as way for firms to allocate resources that the firm cannot develop internally. The purpose of an M&A is to strengthen the strategic position for one or both of the involved firms (Jemison & Haspeslagh, 1991)

During an acquisition, there are two dimensions that needs to be considered, the first one is the level of desired degree of strategic interdependence between acquirer and acquired. The second dimension is the need of the acquired firm’s organisational autonomy. These two dimensions can be combined into four categories which represent four different types of M&As. The first type is called absorption acquisition, which can be seen as the most common and recognisable type of M&A. The acquired firm is absorbed and submerged within the acquiring firm with a high interdependence and low level of organisational

6

autonomy. The second type, called preservation acquisition is the opposite of an absorption acquisition. The acquired firm preserves a low level of interdependence and a high level of organisational autonomy. The third type of acquisition is called a symbiotic

acquisition where the acquired firm keeps both a high interdependence and organisational

autonomy. The fourth category denotes a situation where acquired firm maintains both low interdependence and low organisational autonomy. The fourth type therefore more or less denotes a holding company, with no level of the type of integration that this report aims at investigating (Jemison & Haspeslagh, 1991).

Figure 1 - Types of acquisitions (McKiernan & Merali, 1995, p. 56).

The process of an acquisition consists of both pre-acquisition decisions and post-acquisition integration processes. This report will focus on the post-post-acquisition integration phase.

2.2 Post-acquisition integration

The post-acquisition integration refers to the process following a M&A between an acquirer and an acquired with the purpose of combining assets (Raitis et al., 2018). This phase has been referred to in multiple different ways, in this report the process will be named the post-acquisition integration process.

7

Figure 2 - Phases and events during a M&A (DePamphilis, 2010, pp. 125–126).

Jemison and Haspeslagh (1991) argues that an acquisition must seek to create value, not

capture it. However, they also suggest that empirically, most managers try to do just that:

mainly going for, capturing value through pre-acquisition decisions. During a merger, it is important that a well-communicated integration strategy exist (Davis, 2012), and preferably a responsible person for the integration. Ballor (2020) presents the topic of the

integration manager, which is a role responsible for integrating the firms. The creation

of value is done in the post-acquisition integration phase, and therefore post-acquisition should be seen as key. The integration occurs at many levels, first of, the firms separate accounting systems needs to be combined so that a single legal entity can be created. The transferring of ownership title, the integration of balance sheets and other similar integration processes is also called procedural integration. Another level of integration is regarding the physical assets of both firms, i.e., technologies, product lines etc. Both of these levels of integration, procedural and physical are quite obvious processes for a manager managing a merger (Shrivastava, 1986). This report though, will focus on what can be seen as the most critical integration, the sociocultural integration of two firms. Within the sociocultural integration, the aspect of human exists, i.e., the employees. What research have shown is that employee satisfaction is a vital aspect to consider when trying to enhance the chances of a successful integration, and in the end, a successful merger. Stahl and Sitkin (2010) propose that the acquired firm's employees amount of trust towards acquiring firm's top management affect the future integration. Clear communication, benevolence and integrity are mechanism that will increase factors such as organisational commitment, willingness to help, information sharing etc. among acquired employees. Another aspect that will increase employee satisfaction is the communication between management and employees. Employees who feel anxiety and stress need to have the opportunity to express their feelings and thoughts (Nemanich & Keller, 2007).

8

Figure 3 - Levels of integration within the post-acquisition phase (DePamphilis, 2010,

pp. 125–126).

2.3 Sociocultural integration

Sociocultural integration involves the social, human, and cultural dimensions. The purpose of the sociocultural integration is to combine two separate organisational cultures into one. When investigating the dimension of culture, it is important to define the concept. This study will be covering culture related to nationality, i.e., this study will focus on values and beliefs originated from certain countries and their respective culture. This is important to state since the concept of culture could be defined as values and beliefs originated from a specific firm, i.e., organisational culture (Raitis et al., 2018). Culture consists of values and norms within a society and serves as a transfer of information and meanings to its members. Culture can be seen as the “programming of the mind which distinguishes one group from another” (Gunkel et al., 2015, p. 397). Research has shown that communication, perception and the experience of emotions is highly connected to culture stemmed from nationality (Gunkel et al., 2015; Zander & Zander, 2009).

In Stahl and Voigt (2008) research regarding the sociocultural integration in the post-merger integration process, several cultural impact variables were identified, such as:

• Cultural distance • Cultural compatibility • Cultural fit

• Management style similarity • Cultural change

• Cultural convergence

The variables listed above impact the performance of the sociocultural integration, i.e., whether the integration fails or succeeds in forming one single unit out of two different cultures. Sarala et al. (2014), formulates the variables in different words, namely

9

complementary employee skills, trust, collective teaching and cultural integration. Cultural differences impact a M&A, however what is the impact of these variables in the integration process? How can the process be managed more successfully? Hence, the research questions stated in the end of this chapter.

2.4 Creating teams

Many different studies have made the attempt to define the characteristic of successful and high-performance teams. It is clear that the increasing productivity is of high importance, and that it is important to make sure everyone is on the same page. However, there has been a decrease throughout the most recent years in how to improve team performance. This is due to that leaders and team members are coached separately, instead of being coached together. The belief is that leaders who are well coached can lead team members to success (Wheelan, 2014).

Hesselbein (2013) presents a model named, The place and Space Model. It is designed to increase well-working relations. Where participants who otherwise would not interact with one another, are then forced to learn and integrate with their different perspective towards the same challenge. This model comes with a lot of risk. However, it creates an opportunity that is unique for personal and leadership development. The authors suggest that the team development begins during the first period of these team-building activities. As the process of the activities serves as a contract with one another. It will guide them through the integration, and it creates conditions for their personal and collective growth over time.

A study by Wilde (2008) proposes that when a team is formed it should be organised for maximum success. This is done through assigning team members with activities that are needed, to make sure the team excels. The team formation process is constrained by every individual special need, which can affect the team and is more likely to produce teams that are far from ideal. That means it is of importance to identify and understand where to cover those vacancies. Short but serious meetings can help overcome difficulties. As this can be seen as a potential to see dispute between members. One more reason for early organisation meetings is to quickly establish mutual communication. The author suggests two models that aids in team role mapping and team pattern. The team role map proposes a quick graphic scheme for finding team members responsibilities. The pattern map shows the team’s unique identity. It is important to generate these documents at meeting starting points for any project work.

2.5 Multiculturalism and managing multicultural organisations

Previously, global management mostly involved a single person or manager that was over

there to sell products to other foreign companies. However, today with the expanding

global distribution in companies, cross cultural dialogue has become one of the foundations for global success (Adler & Gundersen, 2007).

10

Research by Halverson and Tirmizi (2008) suggests that, it is critical as a leader to create an environment that is inclusive. To achieve a level of trust it is important for a leader to address inclusion needs, otherwise the leadership fails. The leader also needs to make sure that the team has a goal and purpose. If there is a lack in clarity from the team leader, the members can feel uncomfortable. Often, teams face less difficulty with well-established leaders compared to if they were self-managed teams. Members may go along with a leadership, even if it is not providing successfulness or relationship behaviour. A study for identifying cultural diversity management was done to understand and identify dimensions of cultural diversity. This was done through studying internal and external dimensions in an organisation. Internal dimensions such as social groups, risk taking, the individual’s social relationships and time orientation. The external dimensions included things as clothing, food and rituals. The conclusion suggested that the larger number of managers that was going to manage diverse employee recourses, got to a more critical point. However, the proven models can help managers to improve and achieve most of the benefits from cultural diversity (Kulkarni, 2012).

In research by Georgiadou et al (2019), about managing diversity it is suggested that the link between managing diversity and creating international businesses is strong. This means the by operating globally, businesses will face a number of aspects such as ideologies, languages, institutions, believes or business practices. This also means that the interaction between these people vary and contributes to the complexity of a business environment. The research suggests that there are five main diversity management ways;

• Improving the efficiency of human recourses management.

• Increasing superiors in different key factors in the creation of knowledge. • Developing capabilities that can facilitate operations that are culturally comped

environments, both at home and abroad.

• Implanting new products or services that are for a more diverse customer base. • Try to avoid conflict or commutation problems. Higher levels of satisfaction at

work lead to an all-over increased productivity.

The criteria for a good multicultural manager are personal aspects such as empathic, tolerant, flexible, multilingual, respect for different cultures and adoptive to other cultures. The manager’s qualities are often the key to a team’s success or failure. As many organisations are continuing to become more globalised the manager’s experiences in working with multinational teams and organisations is becoming a more and more important factor (Dumitresc et al., 2014).

2.6 Research model and questions

To enable a logical structure for the study and to increase the chance of achieving the purpose, we designed a research model. This model highlights the connection between

11

the prominent concepts of this study as well as the connection to aim and research questions. As been stated in section 1.3 Purpose, the aim of this study is to highlight the challenges when managers integrate multicultural teams post acquisition. Thus, we perceive that the relationship between multicultural teams and the post-acquisition

integration phase requires to be explained.

Figure 4 – Research model of multicultural teams in the post-acquisition phase.

The recognition of existing difficulties within both M&As and team development alongside the problem of why does so many trans-national mergers fail? resulted in two research questions. These were formulated through the help of existing literature to support the aim of the study.

The theoretical frame of reference alongside the reports background/problem statement provides evidence that the concept of corporate acquisitions as a strategy for enhancing competitive advantage, is hard to fully understand. There are many factors that needs to be considered in order to maximize the chance of a successful acquisition. However, this study will exclusively focus on the sociocultural integration of employees in the post-acquisition phase. As team integration is considered to be an important aspect of the sociocultural integration, it is therefore interesting to investigate success factors and pitfalls of this process. Team integration within M&As is a narrow focus but increasing the understanding of it could lead to a higher success-rate within M&As in general.

12

Considering the fact that it is the employees that is the centre of attention within team development and team integration, it is of high importance to understand how they are affected by a merger. Therefore, the first research question of this study is;

What are the effects on employees in a newly created multicultural team that is the outcome of a merger between two firms?

When an understanding of the employee-based perspective has been established, the study further seeks to investigate the managerial aspects of this phenomenon. Therefore, the second research question is;

How can managers manage these effects, in order to create a successful team integration?

13

3. Method

The chapter presents the different methods used in this qualitative study. It presents how the empirical data that is gathered through interviews. All data is collected in Sweden, Jönköping through various kinds of digital meetings. The research process spans over the years of 2020-2021.

The chapter also includes a research approach, research methods, data analysis and finishing with a discussion regarding the research trustworthiness.

3.1 Research approach

The phenomenon of increasing the strategic position through allocation of resources, i.e., through mergers and acquisitions, have been hard to understand for corporate managers. Why do these strategic decisions so often fail in accomplishing the purpose? There are several reasons for this, one that has been stated within the theoretical frame of reference,

2.2 Post-acquisition integration, is that corporate managers seek to capture value rather

than creating it. Another reason that has been discussed among authors within the field, is that corporate managers wrongly see the pre-acquisition period as more important than the post-acquisition period. This report seeks to enhance the understanding of the different mechanisms within the post-acquisition integration period.

According to Easterby-Smith et al. (2018), ontology can be defined as the researcher's basic assumptions about the nature of reality. They also state that facts are dependent on the individual’s viewpoint, and one person’s truth may not be shared by other similar individuals. The gathered empirical data within this study are mainly based on individual’s own experiences as well as thoughts and are therefore dependent on the individual’s own perception. Consequently, there are multiple different truths among the participants of this study. We needed to be aware of this fact when the different experiences regarding both mergers and team building were dissected. Although, similarities and patterns among the different experiences could be identified and therefore, the uncertainty regarding management in the post-acquisition period could be reduced.

The phenomenon as a result of behaviours, interactions between people and occurring events. For this study to contribute to a greater understanding of the phenomenon itself (post-acquisition integration), as well as provide understanding in how to manage the process in the most efficient way. The different events and sub-phenomenon's needs to be investigated further. The investigation will be based on experiences from people that in one way or another has been affected by the phenomenon. Therefore, we percieve social constructionism to be an appropriate perspective in this study. Easterby-Smith et al. (2018) define social constructionism as the idea, that it is the people that construct

reality, and that it is more important to investigate how they make sense of their

14

multiple truths regarding how you create successful teams out of a merger between two teams or organisations, results in an epistemological standpoint similar to social constructionism.

This study seeks to investigate how the post-acquisition integration process should be managed in the most efficient way, and how successful teams can be created out of a merger between teams consisting of different cultures. Question that will be asked in this report will be based on “why” and “how”, e.g., “how did you feel...” and “why did you

do...” etc. These questions are examples that aligns well with the qualitative approach that

Patel and Davidson (2011) describes. The research aim of this report will be investigated and answered through in-depth and qualitative interviews; therefore, a qualitative approach is best suited for this study.

3.2 Research design

By presenting a research design it provides the reader with a description of the research that will be conducted. By laying out the strategy and principles for the research methodology, the chosen methods and techniques in the different stages are easier for the reader to identify (Easterby-Smith et al., 2018). The research workflow is divided into three stages. Where the first stage begins with formulating the research problem and planning out how it will be conducted. All chapters that are presented before the data collection are completed to a certain extent during this stage. The second stage is where the implementation will happen. Where all the data will be collected and processed. The methods that are presented in 3.3 Research methodswill be carried out at this stage. The last stage is about finishing the study. In this stage the analysis of all the data that is carried out, and discussed to create a conclusion together with possible further research suggestions. All together in a final research report. These stages are presented in a model developed by us, to easier present the workflow timeline.

Figure 5 – The research timeline

The main aim is to map, plan and execute research that is needed for the study to obtain an overview of the chosen field that will be studied. This part partly consists of a literature review and defining the research question. This is achieved through a search for previous research by reading and analysing books, articles and reports on relevant topics. By doing this it is possible to formulate an aim and research question, so that us as researchers can

15

get an understanding of the field that will be studied. When the topic is chosen, we have to make it clear what the research gap is and why it is interesting as well as relevant (Winter & Edgardh, 1992). Another important section of this phase is to develop a well analytical framework and method for data collection.

3.3 Research methods

In the section 3.1 Research approach, it was stated that there was an investigation done on the experiences of the participants. This includes different methods and techniques that has to be carried out, to collect the information from the participants. These techniques and methods will be presented further in sub chapters, to display how the data is to be collected.

3.3.1 Data collection methods and techniques

The data collection will take place during three weeks’ in March-April 2021. All participants that are approached for interviews will be well informed of the purpose of the study, to make sure of the interviewees consent to participate. The data collection is all done through digital meetings on the platform Teams. As the world is in a pandemic, travelling as well as in person meetings are restricted. Even though the interviews could not be held in person they were still face-to-face, and they were still highly successful. To make sure that nothing was lost in translations when conducting the interviews, they were held in Swedish. As this would make the most sense since both interviewees and we as interviewers are Swedish.

One reason for conducting interviews in qualitative research is to explore and understand people’s lives as they live them (Doody & Noonan, 2013). Even if the data will be collected through digital meetings there is an importance to make sure us as researchers can see the participants in a camera or similar device. It is of importance to be face-to-face when conducting interviews, as it becomes a friendlier matter. It also aids with building the study credibility and may increase the chance of honesty from the participants (Fox, 2009). The selection process of the participants for the interviews is based on their profession and knowledge, specifically related to the research’s topic. The purpose of the interviews is to make sure we receive a deeper knowledge and understanding of the theories of post-acquisitions. Together with managing multicultural teams, as well as the participants own thoughts and experience with building teams’ post-acquisition. It is important to conduct interviews with people that has relevant professions, to make sure that they can offer professional and well-informed perspectives on the chosen topic.

The interviews are semi-structured, which means that they are somewhat conversational. However, they also have questions that are standardised and decided beforehand by the, to ensure us as researchers that all topics are covered (Harrell & Bradley, 2009). The

16

questions are also partly adjusted to the participant, to ensure relevance, how long they are able to partake for each interview session and the final answer.

The interviews are built in sections and the questions asked are formed after subject categories, all relevant to the research topic. These categories stem from the theoretical framework and has been developed by the studies. All as important factors to make sure the research questions can be answered.

All interviews are scheduled beforehand, and the participants are all well informed about the aim of the research. During this time of the interview, the interviewees also are made a sure of how their personal information is handled, and what their rights are as participants. Such as integrity, staying anonymous, secrecy, conclusions and professional secrecy (VR 2017:08). It is also stated to the interviewees that the interviews will be recorded and that they have a choice of participation.

To present the interviewees in a simple way, a table is filled in with the most relevant information about each participant. Without stating their personal information.

Table 1 - The interviewees, their profession and length of interview

Interviewee Profession Time length of interview

I1 Portfolio activation marketer 40 min I2 Business logistics lead 55 min

I3 BLS coordinator 30 min

I4 BLS specialist 36 min

I5 Business developer (retired) 30 min I6 Co-Founder & Partner 60 min

I7 Project manager 35 min

I8 Strategic HR Business Partner & Local HR Business Partner

60 min

3.3.2 Development of interview guide

The first step of developing the interview questions was to decide upon the interview structure. The importance of constructing the interview questions before, is to make sure that they stay relevant to the research topic and research questions.

Conducting an interview can be proceeded in many different ways. Interview techniques can range from unstructured to extremely structured. Between these extremes there is a

17

type of interviewing technique named semi-structured. This is the type of interviewing technique we have chosen for this particular study. By choosing a semi-structured interview technique it allows us to have a more open conversation with the participants. It gives the ability to ask further questions, but at the same time keep to the topics that needs to be covered. A focus of semi-structured interviews is to get an understanding of the participants world (Easterby-Smith et al., 2018).

To start the interview process and develop questions a topic guide (Appendix 1) was developed. By having a guide when creating the interview questions, it is easier to construct a well-prepared interview. The topic guide will provide us with a description on how to conduct the interviews, in terms of an opening, key questions and a closing. The opening of this topic guide act as a start to the interviews with questions that are simple. These questions would help the participants to ease into the interview and start a conversation that were comfortable. The following questions revolved more around the chosen topic. In this part, we would go more in depth, to ask the participants more about the research topics. These topics being multicultural teams, post-acquisitions M&As and creating successful teams. The closing act of the topic guide would lead the interview to an end. The participants were asked if they had anything to add to their answers or something else they wished to put their opinion on. They were also made sure of our appreciation for their participation in the research.

The choice of a more open approach to the interviews were made by the us to make sure that the participants answers would not be short-ended nor standardised. That the participants would not answer in a manner of yes or no. These answers give no implication of their own opinion nor thoughts. The aim for us as researchers was to get deeper into the topics and make sure there was an understanding of their answers. Another reason for a more open approach was to be able to a have face-to-face conversation. As non-verbal communication is a large factor when conducting interviews. By seeing another person’s face, it can become easier for us to ask secondary questions. As the interviewer can watch a facial expression change or hear a difference in tone of voice (Easterby-Smith et al., 2018).

Researchers has to be sensitive, as well as skilled enough. Only then the researchers can get the right insight into another person’s thoughts and opinions. The researchers shall at the same time as carrying a conversation forward, assist the participants in exploring their own beliefs (Easterby-Smith et al., 2018).

3.4 Data analysis

As stated previously the aim of this study is to gain an understanding of the participants feelings and opinions, about the topic M&A connected to multicultural teams/ team formation. The research’s data collection procedure had to be open-minded. As it was highly important that the interview technique that was chosen, could ensure the

18

interviewee that him/her could speak freely. As well as be open with the answers, as M&As can be a sensitive subject. To obtain the most information from the interviews conducted they were later on analysed and broken down, to reveal different aspects that would relate to the subject of the research. This can also be named encoding and an example of encoding can be found in Appendix 2.

By encoding data from a qualitative study, we developed a thematic analysis. It is a method that can be used both to reflect reality and even open up the surface of reality. There are six phases that constitutes the thematic analysis. The first step is to familiarise with the data. This means that we go through transcribing the data that is collected. Second step is generating initial codes and the coding creates a systematic fashion throughout the entire data set collected. Where the codes from the data will identify a certain feature that can appear of interest for us. Phase three is searching for themes, where the codes that are created are then put in potential themes. The relevant data that is gathered is put in to a theme each. Fourth phase is reviewing those themes. Where we check if the chosen themes actually work, in relation to the codes and the data collected. This also generates a thematic map of the data to analyse, to get an overview. The fifth phase is to define and name the themes chosen. The analysis is an ongoing activity at this stage. However, the themes have to be refined to get more specific, to connect to the overall story that is told. At this stage clear definitions of the themes are created, as well as defined names. The last and sixth phase is producing the report. This phase is the final opportunity for us to do their analysis. The data that is selected is related back to research question and topic of the study, to produce a scholarly report (Braun & Clarke, 2006). As stated in the chapter 3.21 Data collection, the data was collected as interviews, and they were done in Swedish. The analysis process starts with understanding and familiarise with the data. This is done by transcribing the data. The interviews were recorded with the participant’s consent, and written down word by word. To ensure minimal loss of data, the collected data will have to be translated to English by us.

A few different methods were used for coding the data and collecting into themes relevant to the topics. The first method to handle the transcribed data was to summarise the interviewees answers, after every question. This was to get a new understanding of the data that was collected. By having a summary of each answer, it also made it easier to get an overview of all answers in the interview. The second step in analysing, colour coded summaries were developed. The chosen colours represented different topics and initial themes. By colour coding it made it even easier to categorise all collected answers, to get a better overview. Then all the answers regarding a certain topic can be gathered in its own document. These topics, colours and themes were all discussed during the whole analysis process. They were reflected upon and revised at different times.

19 3.5 Trustworthiness

In the following section, we will present an argumentation for why this report is worth acknowledgement and attention. This will be done through a quality control of the report’s trustworthiness were Guba’s four quality criteria's Guba and Lincoln (1989) were used as guidelines. The four criteria’s that will be elaborated on are Credibility, Transferability, Dependability and Confirmability.

Credibility

The first criterion, credibility, determines whether the reports empirical results match the respondents view of the problem. Possible actions that can increase the reports credibility are member checks, peer debriefings, triangulation etc (Guba & Lincoln, 1989).

After the analysis of the empirical data, in form of interviews, each participant was contacted and presented with the findings. Member checking gave us the ability to confirm or rethink on different findings. This was an important step for us as researchers, making sure that the reconstruction of thoughts and feelings remained true to the initial expression of the participant.

Peer debriefing was also helpful in strengthening the credibility of the study. Continuous seminars throughout the project together with supervisor and students from other thesis projects helped us to design the report. Also, in testing different hypothesis and making sure that we remained true to the scientific code of conduct.

According to Guba and Lincoln (1989), triangulation of data is a strong method for making sure that theories correspond to reality. The cross-checking of data within this study consisted of several comparisons between both scientific reports (for the theoretical frame of reference) and expressions from interviewees (for the empirical findings). Transferability

The second criteria, transferability, refers to whether the findings of the study can be applied in other similar contexts. What is important regarding transferability, is that the reader himself can make that judgement, if the findings may fit in studies elsewhere. Therefore, it is important to have a thick description of the report's context (Guba & Lincoln, 1989).

The transferability of this study has been enhanced through a thorough introduction about the context, see 1.1 Background. The introduction has been written in a way where all the themes of the study is being introduced so that both the overarching context and the sub-contexts is clearly stated. Both the background and the problem statement were written according to the funnel approach. I.e., the description of the context and the problem was funnelled down from the general to the specific.

20 Dependability

The third criteria used for the measurement of quality in a study, dependability, refers to how traceable, logical and well-defined the documentation of the study is. The dependability of a study is high when another researcher easily can follow each step of the study. E.g., if someone would like to recreate the study and confirm the findings. Enhancing the dependability is mainly done in the methodology section of the study, making sure that the methods used in the report are understandable and easy to follow (Guba & Lincoln, 1989).

To increase the dependability of this study, a lot of effort was put into explaining why certain method techniques were used and how they were applied. Each step of certain processes has been thoroughly explained so that it is easy to replicate.

Confirmability

The fourth and last criteria, confirmability, relates to the findings of the study and whether or not they are affected by our own beliefs (Guba & Lincoln, 1989). This study has throughout tried to stay detached from the data and only consider facts. Member checking's and peer-reviews has been of much help to correct eventual errors based on our personality.

3.6 Ethical considerations

Whilst gathering data through interviews with participants, it is unlikely that physical harm could affect the interviewees. However, mental- or economical aspects could harm the participants if their privacy or integrity is disregarded (Easterby-Smith et al., 2018). To ensure that ethical considerations are reserved during the progress of writing this study, we as researchers have considered the ethical principles that Easterby-Smith et al. (2018) state in their book. Ten principles in total are presented and they are divided into two sub-groups, Protection of informants as well as research subjects’ interests and

Protection of the integrity of the research community. The principles will be presented as

detached in the bullet points below, then, we will present how the principles were applied in the study. The principles are;

Protection of informants as well as research subjects’ interests 1. Ensuring no harm comes to participants

2. Respecting the dignity of research participants

3. Ensuring a fully informed consent of research participants 4. Protecting the privacy of research participants

5. Ensuring the confidentiality of research data

21

Protection of the integrity of the research community

7. Avoiding description about nature or aims of the research

8. Declaration of affiliations, funding sources and conflicts of interests 9. Honest and transparency in communication about the research 10. Avoidance of any misleading or false reporting of research findings

The first six principles, which relates to the ethical aspects of the interviewees, were mainly considered before, during, and after each interview. Actions performed by us as researchers, in order to respect their integrity, privacy, dignity and making sure they were fully informed were the following; (1) A clear presentation of the research subject, presented as a summary in an email before each interview, (2) Confirming that the participant fully understood their contribution to the study, (3) Confirming that the participant fully understood where they could find the finalised study, and (4) Confirming that the participant understood that s/he at any point could withdraw their contribution, until the 1st of May 2021. It was important for us as researchers to ensure that the participants were fully informed about their rights and obligations. Also, to gather the data in a professional manner.

The latter six principles were applied mainly through thorough descriptions and presentations. We as researchers have throughout the progress of writing this report, tried to be as transparent and descriptive as possible, carefully presenting results, findings and conclusions. Methods and techniques used for conducting the study have been thoroughly explained and followed by an argumentation of choice. Potential implications as well as limitations have been presented, therefore avoiding any misleading of the reader.

22

4. Results

The results chapter presents the empirical results from the interviews, and is divided into themes and sub-themes. The empirical findings are separated into three themes, that all stem from the Theoretical Frame of Reference; (1) Post-acquisition phase; (2) Teams; and (3) Multicultural teams.

The interviews that are presented in this chapter were conducted during spring of 2021. In total there were eight interviews and each were approximately 45 minutes. Afterwards, they were transcribed word by word and translated into English. As they were all held in Swedish. The interviews are all anonymised. However, as stated in the 3.2 Research

methods chapter, we keep track of them by identifying them with the capital letter I,

together with an additional number.

The empirical results are presented in themes that are based on the frame of reference, connected to the data collected from the interviews. These themes each covers several different aspects of post-acquisition, team development and multicultural teams.

4.1 Theme #1 – Post-acquisition phase

The interviewees were introduced by questions about the acquisitions that they had experienced. It was important for us to get an understanding of the different timelines of the acquisitions. Although, more importantly, the emotions and opinions of the participants during this time. Even though the participants were not asked about any technicalities of the mergers, it was important to understand how many were in the different teams, the reason for the M&A and what kind of acquisition was happening.

Regarding the post-acquisition phase, the answers were some of the ones that varied the most. Mostly due to that not all interviewees were from the same company, nor did they have the same positions within the company if they did. All interviewees had experienced their acquisition differently. The answer regarding on how they felt when they received the knowledge on the acquisition that was going to happen varied. Interviewee I1, I2, I4 felt mostly excited. The reason for their excitement was mostly related to their personality traits. I1 explained that s/he is a curious person and enjoys changes. I2 and I4 stated that they felt excitement and believed it could be an interesting change. However, they had an understanding on what their colleagues felt when going through the acquisition.

Compared to I2, who was feeling anticipation and curious, I6 felt doubtful. The interviewee expressed that s/he felt uncertain of the acquisition that was going to happen. This was due to the feeling of the merge not being a good idea. The interviewee felt irritated by the new organisation and the new ways of handling concrete situations. S/he believed that the acquiring company had another vision of work

23

and how to move a company forward. It created tension in the company board and the interviewee could not be as transparent towards her/his employees as s/he wished to be. The interviewees feelings regarding the acquisition led to a question about what they believed the others at the company felt and what their opinions could be. When they received the knowledge about the acquisition, without fully understanding how it would be played out. The participants were asked about what kind of conflicts they believed that they or others at the company experienced. This answer depended mostly on their position and the company’s position in the acquisition.

I1 stated that M&As can create discomfort and stress in many ways. It was enforced that it can be connected to the employee’s position in the company. The interviewee means that the people within the company who had tasks which were easy to rationalise, they felt a higher risk as being exhaled. Those people are the ones that most likely could be concerned. Often it can be based on feeling unsafe when there are changes happening. Rumours start to trigger people’s beliefs and values. It can also depend on what kind of company is acquiring the company people working on. At certain times a company can feel like they’re a fairly large competitor on the market. However, when a much larger company is acquiring, the employees all of a sudden feel small. This can also cause an unease around employees as they can feel degraded within their own company walls. This is compared to the ones that has special tasks. Those people could rely on their competence and did not experience the threat of an acquisition, in the same way others did. Those employees could sit safe in their positions disregarded to what was happening during the acquiring phase. As they could rely on their competence;

“Often it can depend on the position you have in the company too (…) There are large incentivises to rationalise certain work tasks and I believe that there are most

concern there. Rather than if you’re a product specialist who is unique”. – I1

I2 expressed that personally s/he did not feel as insecure about the acquisition as her/his colleagues did. I2’s colleagues felt scared and reacted anxiously to the news of the acquisition. They could feel something big was going to happen. When the news of the acquisition emerged I2’s colleagues became upset. This was due to the interviewee’s colleagues would be stationed at offices that was going to be much further away than they wished for. I2 also stated that the feelings about the acquisition was different from the country s/he was employed at, compared to the country s/he was working in when the news about the acquisition emerged. In the interviewee’s country s/he was employed in, the company was not known at all. Compared to the country s/he was currently working in, the company was large, and it was known that they had a different way of working than what the current employees were used to. This created different emotions among her/his colleagues towards the situation, depending on in which country they were in.

24

I4 stated that many of her/his colleagues felt forgotten in the acquisition. As they appeared to just be one of many that was being acquired. It was hard on people when the rumour about the acquisition started to go around within the company. Employees believed they would shut down their offices and move them to another office, which was hard on the employees that had been on the same spot for a long time. The interviewee stated that many of the colleagues felt small in the situation, and that they just had to be fine with it;

“I believe that one feels an insecurity when a lot of change is to happen (…) You feel safe in what you have and what you already know”. – I4

Interviewee I6 also stated that in the company s/he worked at, a lot of employees felt anxious. This was due to that many of the employees had been working with the company from the start. They had developed a tight and efficient way of working and communicating, that they knew worked well for them. Many of the employees felt worried about that efficient dialogue would disappear, as they were to become a much larger company. Now they became concerned about their everyday work, as they would become larger and they had no need to do so.

When asked more in detail about how they experienced the acquisition as a whole, it appeared that the answers were tied to concrete events or issues that had emerged from the situation. This was connected to the drastic changes many employees had to experience and deal with, as the acquiring company had new ways of how to organise the company. This was something that most interviewees felt was problematic, not only personally but for their colleagues. Some interviewees had a hard time accepting the new ways of working. However, this also depended partly on what their role in the acquired company was. The interviewees who had larger managerial roles had mostly an issue on how to continue handling their teams, but with new guidelines from the acquiring company. The interviewees with other roles had more issues with new IT-systems, bureaucracy or longer distances between teams.

I1 and I3 expressed that the acquiring company was interested in making a change. I1’s company was a quite calm, smaller company who had their ways of work routines. When the much larger company acquired the focal firm, the interviewee experienced that things became harder to deal with, such as bureaucracy and IT-systems. I3 expressed frustration as they had to go back to old IT-systems, as the acquiring company were somewhat behind in their technological development. The interviewee expressed that this affected their motivation to go back to, according to them, old processes. I3 also stated that s/he preferred working in the smaller company they were, as the decision-processes were faster. As they had been acquired, the decision making

25

took much longer and there was more bureaucracy and company politics that had to be done, before deciding. I3 experienced this as quite frustrating.

During the interviews it became evident to us that the strategies and purpose of the acquisition were important for the interviewees. They were asked how they experienced the post-acquisition phase was handled by the company and different parts included. Further it was discussed if they had any suggestion on what could have been handled better or in another way by managers of the different teams that were merged. In most situations it was clear for the respondents that they were going to be acquired and how that function happens. However, it was unclear on how it was going to be handled by managers and what the strategy would be when integrating into a new company. Several of the interviewees stated that they believed it is important from a manger’s perspective to be clear of what is expected from the acquisition. At some companies, it was not even clear for the managers what was going to happen within the company when acquired. As stated previously, many of the interviewees expressed there being an anxious mood within the company walls. A majority of the interviewees stated that this is something that managers has to take into consideration when building new teams from already existing ones.

I1 stated that it took a while before the company that was acquired could be fully integrated, compared to other departments. The interviewee’s department had its own life, and ways of working. The interviewee stated that the integration process took a long time, longer than they had wished for. I2 also stated that it took a few months before they even heard anything from the acquiring company, and the employees started to think they may have been forgotten. The interviewee explains that s/he believes there could have been an integration strategy, however not anything that was presented to the employees. When the integration process started there was much focus on technicalities. To make sure that the concrete practicalities ran smoothly, before handling the employees. I2 explained that there was no big speech about the acquisition and what was going to happen next. Instead, the company stared to slowly integrate different functions. The interviewee explained that the integration was done by someone who got the responsibility to become integration manager at the acquiring company, who was in charge of integrating different functions throughout the merger. This person also made sure that everyone at the company answered to the right person, who their new boss was or how to keep in contact with their new colleagues.

I6 stated that the main issue s/he encountered with the acquisition was that the acquiring company had another way of seeing how the integration process should be handled. I6 expressed that due to the acquiring company being from another country, they would clash due to cultural differences. The interviewee presents that the ambition was that the integration would be completed between both companies after one year. This