INOM
EXAMENSARBETE INDUSTRIELL EKONOMI, AVANCERAD NIVÅ, 30 HP
STOCKHOLM SVERIGE 2020,
Assessing an IT system
implementation in a post merger scenario
JONAS FLORÉN KIAN ROUSTA
KTH
TRITA TRITA-ITM-EX 2020:367
Assessing an IT system implementation in a post merger scenario
by
Jonas Florén Kian Rousta
Master of Science Thesis TRITA-ITM-EX 2020:367 KTH Industrial Engineering and Management
Industrial Management SE-100 44 STOCKHOLM
Utvärdering av ett IT
implementationsprojekt efter ett företagsförvärv
av
Jonas Florén Kian Rousta
Examensarbete TRITA-ITM-EX 2020:367 KTH Industriell teknik och management
Industriell ekonomi och organisation SE-100 44 STOCKHOLM
Master of Science Thesis TRITA-ITM-EX 2020:367
Assessing an IT system implementation in a post merger scenario
Jonas Florén
Kian Rousta
Approved
2020-06-15
Examiner
Anna Jerbrant
Supervisor
Gisela Bäcklander
Commissioner Contact person
Abstract
Mergers and acquisitions (M&A) are today two common ways to expand and grow businesses. However, studies report that around 50-75% of all M&A transactions fail to yield expected results. This study focuses on the value creation realized in the post merger integration. During the post merger integration, organizational structures, IT systems and work routines need to change and integrate in order to achieve the desired synergies. Often when processes need to change or new ways of working are implemented, artifacts are utilized to facilitate the change. However, managers often fail to recognize the social perspective of organizational change.
This study analyzes how a warehouse management system was used in a post merger integration to drive organizational change and establishing a common way of working between employees from different companies. The researchers have conducted a case study at a private equity firm that recently acquired and merged six companies in the fast moving consumer goods industry. As part of the case study, interviews and observations were made.
This thesis presents two main results. First, that the choice to adopt a system-first-approach and neglecting human and task integration in the PMI resulted in several obstacles. The case company focused solely on system integration to realize the most obvious synergies of the different companies. This caused employee resistance and lack of trust and confidence towards managers and their intentions. It also yielded an ungiving and unhelping culture between employees that previously belonged to different companies. This indicates the
importance of mixing employees from different companies after the merger. Moreover, the importance of creating cultural-unity under one brand is discussed. The results indicate that there should be a balance between human integration and task integration when merging several companies. Consequently, we present a two-by-two matrix that outlays the dependency of company characteristics on integration focus.
Secondly, managers at the case company put too much faith and emphasis on artifacts and systems to change organizational behavior and neglected the perspective of sociomaterialism. This resulted in a failed implementation of the warehouse management system due to neglecting the employees’ perspective and ways of working. As a result, employees developed workarounds to the system and later abandoned the system.
Consequently, managers should have adopted a technochange perspective when driving organizational change with IT systems. This means that the implementation of an IT system should be consider in conjunction with employees and their routines.
Key-words: Organizational Change, post-merger integration, sociomaterialism, technochange, warehouse management system, artifacts
Examensarbete TRITA-ITM-EX 2020:367
Utvärdering av ett IT implementationsprojekt efter ett företagsförvärv
Jonas Florén
Kian Rousta
Godkänt
2020-06-15
Examinator
Anna Jerbrant
Handledare
Gisela Bäcklander
Uppdragsgivare Kontaktperson
Sammanfattning
Fusioner och förvärv är två vanliga metoder som idag används av företag för att växa och ta nya marknadsandelar. Trots detta visar studier att 50-75% av alla förvärv misslyckas med att realisera förväntade synergier. Denna uppsats fokuserar på värdeskapandet som sker i integrationsfasen efter sammanslagningen. Under integrationsfasen integreras IT system, arbetsprocesser samt organisationsstrukturer för att realisera synergier. I samband med att företag ändrar på arbetsrutiner brukar artefakter användas för att stödja förändringsarbetet.
Denna uppsats studerar hur företag kan använda sig av IT system under integrationsfasen för att driva förändring samt för att etablera ett gemensamt arbetssätt hos anställda med olika företagsbakgrunder. Denna uppsats är skriven tillsammans med ett riskkapitalbolag som tidigare köpt upp och slagit ihop sex företag inom industrin för snabbrörliga konsumentvaror. Som en del av fallstudien utfördes intervjuer och observationer på portföljbolaget.
I denna uppsats presenteras två huvudresultat. Det första; bristen av fokus på integration av anställda från olika bolag ger upphov till motstånd och lågt förtroende till beslutsfattande. Det resulterade även i en fientlig och icke-hjälpande kultur mellan anställda med olika företagsbakgrunder. Resultaten påvisar vikten av att blanda anställda från olika företag i nya arbetssätt för att skapa tillhörighet och hjälpsamhet. Resultaten indikerar också att det är viktigt att ha ett gemensamt varumärke som alla anställda kan ställa sig bakom. Därför diskuteras balansen mellan integrering av anställda samt processer i en sammanslagning. I uppsatsen presenterar vi en två-gånger-två matris för att illustrera förhållandet mellan ett företags industriella karaktärsdrag samt integreringsfokus.
Det andra huvudresultat visar att ledning samt styrelse hade för stort förtroende på artefakter för att förändra organisationellt beteende, det sociomaterilaistiska perspektivet följdes inte.
Detta resulterade i en misslyckad implementering av ett IT system som ämnade att förändra beteendet hos anställda och realisera synergier. Anledningen hänvisas till försummelsen av de anställdas perspektiv samt arbetssätt. Detta resulterade i att de anställda utvecklade egna lösningar och i ett senare skede slutade använda systemet helt och hållet. Följaktligen borde företaget ha anammat ett “technochange” perspektiv för att driva förändring genom IT system inom företaget. Detta innebär att IT systemet måste ses som ett ekosystem tillsammans med anställda och arbetsprocesser, inte som ett självständigt system.
Nyckelord: organisationsförändring, artefakter, sociomaterialism, integration, technochange, IT system, uppköp och förvärv
Table of content
1. Introduction 1
1.1 Background 1
1.2 Purpose and Research Question 2
1.2.1 Research Question 4
1.3 Delimitations 4
2. Literature Review 6
2.1 Mergers and Acquisitions 6
2.1.1 M&A research streams 6
2.1.2 Task integration 9
2.1.3 Human Integration 10
2.2 Change management and organizational routines 11
2.2.1 Sociomateriality and the role of artifacts in organizational change 11 2.3 Using information systems to drive organizational change 13
2.3.1 Technochange Projects and Systems Thinking 14
2.3.2 Status Quo Bias Perspective 15
2.4 Private equity firms 17
3. Methodology 18
3.1 Methodological approach 18
3.2 Researched case company 19
3.2.1 Case company 19
3.2.2 Portfolio company background 20
3.2.3 Case study rationale 21
3.3 Data collection 22
3.3.1 Primary data 22
Interviews 23
Observations 25
3.3.2 Secondary data 26
3.4 Analysis 27
4. Results 31
4.1 Challenges with the merger from a managerial perspective 31
4.1.1 Warehouse Management System 32
4.1.2 Personnel management 36
4.1.3 Customer communication 38
4.1.4 Product complications 39
4.2 Challenges with the merger from a shop floor employee’s perspective 40
4.2.1 Different work routines amid merger 40
4.2.2 Unorganized workspace 41
4.2.3 Implementation of the WMS 42
5. Discussion 45
5.1 Combining human and process integration 45
5.2 Technochange projects and systems thinking 50
5.3 Sustainable Development 53
6. Conclusions 54
6.1 Missing opportunities of efficiency improvements by neglecting human and task
integration 54
6.2 Time consuming efforts due to lack of knowledge about driving organizational change
with an IT-system 55
6.3 Limitations and Implications for Future Research 56
References 57
List of Figures
Figure 1. Brief introduction to perspectives used in the literature review 6
Figure 2. Human integration vs Task integration matrix 8
Figure 3. Inductive vs Deductive approach 18
Figure 4. Private equity firm’s current company portfolio 19
Figure 5. Inventory vision at case company 33
Figure 6. Employee pathway without WMS and with WMS 34
Figure 7. Location optimization using standardized put away rules 35
Figure 8. The 20/60/20 rule 37
Figure 9. Integration timeline 47
Figure 10. Process VS Human integration matrix 48
Figure 11. Phases of employee involvement in technochange projects 52
List of Tables
Table 1. Summary of research streams on M&A transactions 7
Table 2. Failed M&A transactions 9
Table 3. The five step process of the Naïve top-down-ism perspective 12
Table 4. Top management interviewees 25
Table 5. Production employee interviewees 25
Table 6. Time span of observations 26
Table 7. Tesch’s eight steps of coding 28
Table 8. Themes and Codes from reassembling 29
Acknowledgements
We want to devote our greatest appreciation to our supervisor Gisela Bäcklander at KTH Royal Institute of Technology for the continuous feedback and admirable guidance throughout the process of conducting this thesis.
Further, we want thank the case company for their time and efforts to support us in the process of writing the thesis. We are grateful for the time devoted for interviews amid the Covid-19 virus troubles.
1. Introduction
In the following chapter, the reader will be given a brief overview of the subjects covered in this thesis and its context of relevancy. The purpose and research question will be introduced to guide our intentions throughout the remaining parts of the report. Moreover, delimitations are established to further narrow down the scope.
1.1 Background
Many organizations today rely onmergers and acquisitions (M&A) to expand and grow their businesses. (Gomes et al., 2011; Rao-Nicholson, Khan & Stokes, 2015; Zollo, 2009) . An M&A activity aims to satisfy at least one of the following goals: creating synergies, acquiring knowledge, reducing costs or increasing market share (Puranam, Singh, & Chaudhuri, 2009). Studies reveal that around 50% of all companies witness decreased performance post acquisition(Cui & Leung, 2020; Bouwman, 2013) . Other studies report a failure rate, i.e.
the combined performance of the merged companies is less than the sum of what was expected from them separately of between 50-75% for mergers (Christensen et. al, 2011;
Marks & Mirvis, 2001) . Given that in the last two decades more than 750,000 transactions have been announced to a value exceeding 50 trillion USD, a 50-75% failure rate indicates a major loss of potential (IMAA, 2019). Consequently, many researchers have tried to understand the nature of M&A activities to increase the success rate. Literature has thus revolved around understanding M&A activities and their failures.
Different authors have tried to answer this question by analyzing different factors that are crucial in order to successfully complete an M&A transaction. Some authors argue that organizations must develop certain capabilities for M&A processes while others emphasize structural and cultural integrations as key success factors (Heimeriks et al. 2012; Zollo &
Singh, 2004; Pablo, 1994). The proponents of the former mean that top management’s industry knowledge and experience from previous transactions affect the outcome of potential M&A deals (Cui & Leung, 2020). Advocates of the latter mean that a lacking integration is one of the key reasons that M&A activities fail to improve performance. This could be because knowledge of the acquired company is lost through employee turnover, the culture could be undermined, or employees can show major resilience to change. These factors can lead to disappointing results following the transaction. Many problems arise due to different organizational routines in a post merger integration (PMI) scenario. It is during the PMI that the value creation is realized Pablo (1994). During the PMI, organizational structures, IT-systems, routines, departments and cultures need to change and integrate in order to achieve and realize synergies. However, the PMI is a complicated process that is plagued by many problems (Mulherin, Netter & Pulsen, 2017; Greenwood et al., 1994).
Often when processes need to change, or new ways of working are implemented, artifacts are utilized to facilitate the change. The term artifact is defined as “anything made by human art and workmanship” (Oxford English Dictionary Online). In a work setting, these could for example be checklists, forms, processes or softwares. Managers often use artifacts as leverage to change patterns of behaviors of employees. New artifacts are implemented with
the aim to develop effective and cost-efficient ways of working. However, many firms find themselves failing to achieve their goals (Wagner, Scott & Galliers, 2006).
Studies show that management often over rely on artifacts to solve problems. Several authors have analyzed the naïvety of overlying on artifacts as a tool to drive organizational change. The perspective of sociomaterialism tries to highlight the fundamental aspects of why realizing synergies with artifacts often fail. Frequently, managers believe that implementing new artifacts will automatically yield new ways of working among employees.
They neglect the perspective of several actors and dynamic development of new routines (Pentland & Feldman, 2008). Rather, managers often follow the perspective of technological determinism that believe that technology is the force that yields social and organizational change (Berg, 1998). This results in an over confidence in employees following implemented artifacts. Instead, managers should recognize the interdependencies between employees and artifacts (Cohen, 2007). They need to understand the viewpoints of the employees and how they would respond to changes in their work. Moreover, a larger emphasis should be put on the ostensive. This means enabling for trial-periods where employees can work with the new artifacts and routines to give their input (Kline, 2015; Leonardi & Barley, 2008) . Studies analyzing artifacts’ role in change have not been conducted in a PMI context.
Consequently, this thesis will aim to analyze and evaluate the implementation of artifacts in a PMI scenario.
In order to gain insights into the integration of organizational routines using artifacts in a post merger scenario, the merger of six companies in the fast moving consumer goods (FMCG) industry have been studied. An in-depth analysis of how management coped with different organizational routines and why the implementation of a standardized way of working, using artifacts, failed have been conducted. We introduce what we call a system-first-approach, which is when a disproportionate amount of time and effort is allocated to integrating systems in a PMI and neglecting human and task integration. Moreover, it highlights managers’ over reliance on systems to change routines and employee behavior.
More specifically, this thesis constitutes of an in-depth case study, where the implementation of a warehouse management system (WMS) following a system-first-approach, have been analyzed. The researched case allow us to gain a deeper understanding of how IT systems can be utilized to align working routines in a PMI scenario and the role of artifacts to drive organisational change. This will serve as the foundation for the qualitative research of this thesis. Furthermore, a comprehensive literature review has been conducted to understand the levers affecting the merger of different organizational routines.
1.2 Purpose and Research Question
The failure rate around M&A activities is high. One of the reasons attributed to failure is incompatibility of work routines, cultures and processes between the merged firms. The case company, analyzed in this thesis, invested in a WMS in order to cope with the differences in employees’ work routines and to create standardized ways of working in a PMI. However, the implementation was not successful and the results following poor. Studies analyzing the leverage of artifacts and systems when driving organizational change reveal that
management heavily rely upon artifacts to automatically set new ways of working, excluding the involvement of employees in the redesign of work processes.
We believe that the researched case company serves as a good data source as it previously merged six companies in the fast moving consumer goods (FMCG) industry. Furthermore, it has implemented a new WMS to create a common way of working as a response to different ways of working between the previously different companies. Consequently, this thesis aims to further understand the dynamics of implementing artifacts to change habits and routines of employees. More specifically by using a retroductive analysis of the PMI at the given case company to gain a better understanding. Given the background, this thesis will have two objectives.
First, we intend to contribute to the scientific research community. By answering the research question, the goal is to extend the theoretical knowledge within the field and give implications for future research. In the literature review, theories within the following areas will be explored:
● Human and task integration in a post merger integration scenario to cope with contrasting cultures and different ways of working
● The perspective of sociomaterialism that conceptualize the practice that systems, routines, structures and employees are analyzed independently in businesses
● The technochange perspective; using IT systems to drive organizational change.
Technochange projects, focuses on the entirety, how it affects employees, processes and overall business performance.
Through the literature review the separate fields of studies will be combined to develop a better understanding of using artifacts to drive organizational change in a PMI. The perspectives of, mainly, sociomaterialism, technochange projects and processes will be utilized as a lense of understanding phenomenons in the case study. ( Pentland & Feldman, 2008; Berg, 1998; Markus, 2004;Leonardi & Barley, 2008; Cohen (2007).
Secondly, the outcome of this master thesis, beyond scientific contributions, will aim to have managerial implications. Thus we will include sections for practitioners, where the results from the thesis are formulated in an action-oriented and general manner. The goal of this part is to generate practical methods to successfully integrate companies in a PMI using artifacts.
1.2.1 Research Question
Given the objectives of this master thesis the following research question is formulated:
● What challenges arise when over relying on systems when implementing a new warehouse management system that enforce a common way of working in a post-merger integration following a system-first-approach perspective?
1.3 Delimitations
In order to focus efforts on the research question and avoid getting side-tracked, establishing delimitations is a prerequisite for a transparent and focused thesis. Three delimitations has therefore been established and are presented below:
The first delimitation is the choice of only having one company for the case study. This choice is based on two factors mainly. Firstly, one of the authors is employed at the PE company that owns the case company, creating a bias in a potential multi-case study. It also becomes a question of confidentiality as other companies are unmotivated to provide information to students employed by a competitor. Secondly, the time span of the master thesis is limited to one semester, analyzing more companies in depth would not be viable.
Nonetheless, we believe this choice generate research depth ahead of width. Increased time with the case company gave us an holistic perspective developed over time. Moreover, relationships and trust generated with employees enabled us access to extensive details regarding the issue analyzed. Getting to know the employees led to less hostility towards our interviews and observations, thus, enabling us to gather more information. However, we recognize the limitations on the study’s generalizability compared to studies with multiple cases.
The second delimitation concerns the methodology. We chose to only do a qualitative study.
As the thesis analyzes work routines and how employees act in PMI a qualitative study were better suited than a quantitative study. This is because a qualitative study captures the dynamics in employees’ motivations, perceptions and underlying rationales for certain actions. This enables the thesis to dive deep into the problem analyzed and to yield nuanced answers. However, another reason of choosing a qualitative study in favor of a quantitative study is the availability of large samples of data at the case company. Studies using quantitative methods often utilize large data samples to draw reliable conclusions. We were limited by the choice of only doing one case and consequently, the sampling availability becomes small. Moreover, the nature of the thesis made a qualitative study more favorable for in-depth analysis of behaviors and rationales.
Thirdly, in this thesis we will not analyze how actions or implementations impact financial results. Instead we will focus on soft factors. Meaning that we will focus on how management perceived the previous implementation and how the employees perceived it.
We will focus on perception and behavioral aspects rather than financial and tangible outcomes.
Lastly, it is important to mention the outbreak of Covid-19 during the time of this thesis. The major effect on the thesis that the outbreak had was in the number of interviews being held with the case company. Because of the virus, the case company had much other things to address and consequently was left with less disposable time for thesis interviews. We, partly, countered this problems by doing interviews by following production workers in their work and asking questions. This resulted in longer interviews yet enabled us to conduct them as planned.
2. Literature Review
In chapter 2.1, we will introduce theories regarding human and task integration in a post merger integration. Concerns regarding cultural differences and discrepancies in work routines are discussed. The following section, chapter 2.2, includes a short introduction to change management and organizational routines, as a background to the following sections.
In chapter 2.2.1, we introduce the perspectives of sociomaterialism and technochange. We learn how businesses analyze systems, routines, structures and employees as independent to each other. Moreover, the technochange perspective describes how to leverage systems thinking when using IT-systems to drive organizational change. We highlight the importance of including employees and not solely focusing on the hard factors when driving change. We end the literature review with a short introduction of research within private equity just for clarifications regarding the owner of this project. The intention is that, at the end of the literature review, the reader will have a brief understanding of the different perspectives used as lense of analysis in this paper.
Figure 1. Brief introduction to perspectives used in the literature review
2.1 Mergers and Acquisitions
2.1.1 M&A research streams
The term mergers and acquisitions (M&A) refer to the activities of purchasing and consolidating companies. M&A activities are used by companies as an investment strategy to grow operations and gain competitive advantages (Cui & Leung, 2020). An M&A activity could vary in size and scope and there are many aspects to consider. Consequently, there are several perspectives in the field of M&A research. Haspeslagh and Jemison (1991) proposed in their study four main categories to divide studies within M&A transactions into.
Each research stream has its own theoretical foundation, objectives and areas of focus. A brief summary is given in Table 1 on the next page:
Table 1. Summary of research streams on M&A transactions according to Haspeslagh and Jemison
The research stream of capital markets addresses the effect of M&A transactions on shareholder value. It studies the prices and dynamics of the stock market affecting wealth among owners. Moreover, it is mostly concerned with the time frame of when an M&A transaction becomes known to the public. The rationale for this is based on the efficient market hypothesis. This means that the benefits of the merger will be instantly reflected in the stock price at announcement. This is the reason the research stream of capital markets will be excluded from this thesis as the scope of analysis differs from the purpose and scope of this thesis. Findings in this field have shown that shareholders of the target firm experience positive gains while not the same has been noticed at the acquirer. (Haspeslagh
& Jemison, 1991; Birkinshaw, Bresman & Håkanson, 2000)
Scholars within the field of strategic management address the pre-merger compatibility between companies. The compatibility of the firms are used to forecast and estimate future synergies and improvement potentials. The analysis is often high level and many studies do not mention the underlying factors of realizing the synergies, e.g. integrating tasks (Zaheer et al., 2013; Bauer and Matzler, 2014). Instead it concerns how pre-merger characteristics affect the merged organizations. Compatibility is a broad term and can refer to similar work processes, cultures or long-term goals (Cartwright, 2006; Aguilera and Dencker, 2004).The compatibility increases when the two firms have similar ways of working, social constructs and strategies. Compatibility does not refer to tangibles like systems or products but more the mindset of the employees and how they perceive themselves and their company. The analysis of compatibility is conducted in the pre-merger and naturally, also, falls outside the scope of this thesis. (Bauer & Matzler, 2014)
The field of organizational behavior under the scope of M&A theory focuses on the employees of the organizations. Compared to the research stream of capital markets and strategic management, organizational behavior addresses the post merger integration phase. Moreover, it uses a cultural perspective as lens when analyzing the PMI.
Consequently, employee and competence turnover, cultural differences and social belonging are aspects discussed in this area. (Weber & Drori, 2011; Ahammad et al., 2016).
The fourth and last research stream is the process perspective. This research stream analyzes M&A transactions on a more granular level to understand the details of realizing
synergies and how. This means that actions are analyzed based on a change management point of view. (Dao & Bauer, 2020; Bijlsma-Frankema, 2004)
Both the research stream of organizational behavior and process study the PMI phase. We have earlier stated that we will focus on the work routines in the post merger integration which would fall into the process perspective. However, Bresman & Håkanson (2000) argue that the process perspective needs to be analyzed in conjunction with studies of organizational behavior. This is in order to realize the full potential of the PMI. Consequently, we will cover both of these streams to create an exhaustive understanding of PMI dynamics.
Figure 2 (developed by Birkinshaw, Bresman & Håkanson) shows that an increased focus on human integration can result in content employees but reduce operational synergies. On the other hand, solely focusing on process/task integration can lead to a loss of motivation and increased employee resistance (Haspeslagh and Jemison, 1991). The two different perspectives require completely different actions from managers. Consequently, different actions are required to create new routines and procedures in contrary to creating a culture of collaboration and trust Buono and Bowditch (1989).Therefore, both perspectives need to be taken into consideration when analyzing a PMI scenario to efficiently realize potential synergies.
Figure 2. Human integration vs Task integration matrix (adapted from Birkinshaw, Bresman &
Håkanson, 2000)
Below we will shortly describe the characteristics of task integration and human integration in a PMI setting.
2.1.2 Task integration
Task integration concerns integrating operational structures from different companies. This could be plants, finance departments, production lines or sales activities. During the PMI, organizational change is a fact and consequently, the employees need to change and adapt their way of working to fit the new organizational routines (Vuuren, Beelen & Jong, 2010).
When merging two or more companies, management need to recognize each company’s unique way of working. Every company has its own characteristics that represent the way its employees define themselves and the way they work. This could be routines, norms, habits and best practices that are different from other companies(Ravasi & Schultz, 2006; Hatch, &
Schultz, 2002). If the routines and ways of working of the two merged companies are incompatible, the integration process can be complicated. Disagreements can result in employees having a hard time understanding the work process and norms of their new colleagues. This will create irritation, dissatisfaction and resistance (Very, Lubatkin & Calori, 1996; Larsson & Finkelstein, 1999) . Moreover, discontent can result in high employee turnover, resulting in loss of knowledge and competence which could be critical for the success of the merger (Caroll & Harrison, 2002) . Many times mergers fail because the acquiring company fail to recognize the target’s way of working and their differences.
Consequently, the success of the merger is highly dependent on the compatibility of the firms and more importantly, recognition of disparities (Peters and Waterman, 1982; Deal and Kennedy, 1982). Table 2 shows four M&A transactions that failed due to incompatible ways of working.
Table 2. Failed M&A transactions (Gelfand et al. 2018; Jacobsen 2012; Marr, 2007)
However, studies indicate that the law of diminishing returns come to play. There is a balance between the integration and employee resistance caused by the level of integration.
The actions required to perform process integration are time and resource consuming. This means that at one point, the cost to realize a synergy becomes greater than the synergy itself. Consequently, management need to be aware of the law of diminishing returns when realizing synergies in a PMI. The benefits of more integrations could be outweighed by the cost of integrating and time it take to do it. (Slangen, 2006; Teerikangas & Very, 2006)
Another trade-off that is mentioned in the literature of task integration is that of speed vs communication (Birkinshaw et al., 2000) . An increased focus on quick implementations of processes leads to less transparency and communication about each decision. This in turn can lead to uncertainty around new routines and areas of responsibility
(Lukas, Menon, &Bell, 2002). Proponents of gradual task integration mean that it takes time for new routines to mature. To change work routines is a step of uncertainty that can result in stress and reduction in performance among employees. Consequently, not rushing implementations of new routines allows time for awareness and reduces the barrier of resilience. (Nonaka, 1994; Yu, Engleman & Van de Ven, 2005)
2.1.3 Human Integration
While the task integration perspective analyzes the integration of routines and tangible structures, studies within organizational behavior address the questions regarding emotional resilience, resistance and loss of motivation among employees during the integration (Stahl et al., 2013). The human integration perspective emphasizes transparency and communication with employees in order to reduce the uncertainty of the merger. Uncertainty can create resistance towards integrations and other synergy realizing actions. Pressure and stress from creating new process that employees are unfamiliar with has been registered to reduce cognitive ability and performance. (Bauer, King & Matzler, 2016)
Studies show that a fast human integration, i.e. creating a feeling of belonging, shared identity and clear structures and procedures reduces the barrier of resistance (Benner and Tushman, 2003; Stahl and Voigt, 2008). However, studies on human integration still indicate that there is too little focus on the employees during M&A transactions by management.
Instead, employees are de-naturalized to a high degree in M&A activities, i.e. their character and knowledge linked to their previous company are neglected together with their autonomy.
This could in turn cause resistance and high employee turnover (Dao & Bauer, 2020). (Khan et al.,2017) try to address this problem by suggesting that management need to recognize more than financial and non-financial rewards to avoid employee resistance. One aspect is procedural fairness which is how employees treat each other and what they are “allowed” to do. Fairness issues play a significant role in developing the employees’ emotional resilience.
Thus, reducing the possibilities of high employee turnover and resistance in the integration process that could reduce the value creation possibilities. If the employees understand the new processes and think they are treated fairly they will be more willing to open to integrate into the new company.
Leadership becomes very important when focusing on human integration during the PMI. It is important that leaders create an environment where employees from different organizations can sense belonging (Sitkin & Pablo, 2004) . Employees do not want to be stripped of their character and knowledge linked to their previous company. Consequently, it is important for managers to develop and build credibility in the process of merging the companies. This is important in order to avoid resistance and create commitment to new processes and procedures. Transparent communication is stressed as important, and explaining why things are changed as they are. Moreover, Guth (2002) argues that leaders need to communicate the effects of changes by connecting goals of the organizations with
the ones of the individual employee. This indicates that leaders need to create trustworthiness in order to create credibility in the choices they makes.
2.2 Change management and organizational routines
Organizational change is part of every business and is the key to successfully compete on the market. Change could concern organizational structures, decision processes and routines to strategic and operational alterations. (Leana & Barry, 2000; Taylor-Bianco &
Schemerhorn, 2006).
Driving change in organizations can be complicated as it can evoke resistance and defensiveness among employees (Labianca, Gray, & Brass, 2000) . Altering processes and creating new ways of working can be confounding for employees (Gioia & Thomas, 1996;
Weick, 1995). Sense-making is the concept of communicating to employees the reasons and end-goals of change. It is about creating an organizational-wide understanding of why change is needed. This could significantly alter employees’ willingness to commit to changes in routines. Sense-making is thus a social process in organizations, largely attributed to leaders and their responsibility to influence others to cope with change. Studies show that if sense-making is conducted properly, driving change becomes significantly easier (Brown &
Jones, 2000, Maitlis, 2005; Banker, 2012). This report will limit its focus to changes of routines in organizations when discussing change.
Some researchers argue that routines are rigid and continuous which leads to organizational inertia (Baum & Singh, 1994; Aldrich, 1999) . Others argue that routines are dynamic and change over time and are therefore an important factor driving change (Adler et al., 1999;
Feldman, 2000). However, more recent studies mean that routines are dynamic rather than static (Lazaric & Denis, 2001; Hodgson, 2003; Feldman & Pentland, 2003) . An important aspect of organizational routines is that they are intertwined between several actors with interdependent tasks (Pentland & Feldman, 2005).
2.2.1 Sociomateriality and the role of artifacts in organizational change
Many organizations seek to continuously improve their operations by redesigning new efficient ways of working. Pentland & Feldman (2008) study the implementation of artifacts in driving organizational change. Artifacts are man-made objects and in a work setting these could be checklists, forms, processes or softwares. Managers often use artifacts as leverage to change patterns of behaviors of employees. New artifacts are implemented with the aim to develop effective and cost-efficient ways of working. However, many firms find themselves failing to achieve their goals (Wagner, Scott & Galliers, 2006).
Often times, managers fail to recognize the essence of organizational processes when implementing artifacts to drive organizational change. What has been called “Naïve top-down-ism” (Pentland & Feldman, 2008; Winter 2005 ) 1 describes the naïve belief that artifacts, themselves, will improve performance, a kind of technological determinism (Berg,
1 From the second International Conference on Organizational Routines, Nice, France, 2005 (From Pentland and Feldman, 2008)
1998; Leonardi & Barley, 2008) . The phenomena has emerged from the wider term, sociomateriality, that describes the concept of systems, routines and structures being separated and analyzed individually in practice. When in reality these aspects should be seen as interdependent and interconnected in the development phase. The perspective of sociomaterialism emphasize the neglection of the fact that artifacts and employees are highly interdependent. Personnel should not be viewed or expected to follow routines like machines or computer systems. You don’t install a routine in people the way you install a program on a computer. There is always an aspect of adoption and having different ways of working in between different work days (Orlowski & Scott, 2009; Sousa & Machado, 2014) . Firms embracing the naïve top-down-ism believe that artifacts generate effective routines, resulting in good company performance. There are five steps of an implementation that follow the naïve top-down-ism perspective:
Table 3. The five step process of the Naïve top-down-ism perspective (From Pentland & Feldman, 2008)
The problem with the naïve top-down-ism arises when the gap between development and usage becomes to wide. Often, the developers set the required specifications of the system independently from the personnel using the system. This causes problem in the implementation as there is a lack of understanding from the designing perspective on the user, and vice versa (Greenbaum and Kyng 1991). Problematics arise from a gap of knowledge and comprehension of each other’s needs. The gap is further increased by silo-designed organizations with different departments caused by the lack of cross-department communication. Another aspect, that further reinforces the naïve top-down-ism, is that companies use the systems to take more control and further de-neutralizing their employees. Companies, indirectly, try to strip the autonomy of employees by create strict and automated processes to be followed (Bannon 1997; Agre 1995; Robinson 1991). Neglecting the perspective of the users subsequently results in non-satisfying results from driving change using artifacts. Managers often develop “dead routines” (Cohen 2007). That is, a sequence of activities developed for the employees in order to enact and realize efficiency improvements from implementing new artifacts. These pre-programmed processes and routines are often neglected and not followed by
employees. This is because dead routines do not enable flexibility and change in its specification, that could arise as users learn to use the system (Pentland & Feldman, 2008).
Instead, companies should follow the concept of live routines. Live routine is a concept developed as a counter perspective of dead routines based on the sociomaterialism beliefs.
Live routines embodies the concept that routines are shaped by humans rather than artifacts (Cohen, 2007). Problems resulting from dead routines could be overcome with development meetings including all participants. To include all participants would for many companies indicate a greater trust and empowerment to employees. Moreover, it would indicate a shift in focus from technical specifications to employee routines and social aspects of organizational change. Consequently, companies need to readjust their perception and strategy of organizational change using artifacts. Consequently, it becomes important to adapt artifacts based on current organizational prerequisites and employee ability (Berg, 1998; Leonardi & Barley, 2008). Managers and developers should start off with asking themselves what the end result should be. If the artifacts intend to change behavior, employee routines or organizational structures would result in different project approaches.
Depending on the project characteristics, different aspects of the organization need to be addressed and different stakeholders involvedOrlikowski (1996). Narrative network (NN) is a perspective that further builds on the perspective of sociomaterialism. It serves as a model to improve projects concerning organizational change. The NN model enables visualization of habits and actions taken in organizations. It is used to map out and evaluate patterns in organizational routines when implementing IS systems. It works as a tool to identify actions taken by employees in the business, thus, making it easier to design the system to fit desired routines. The NN model could therefore be utilized by organizations to more efficiently and precisely drive change (Yeow, 2008; Yeow & Faraj, 2011).
Moreover, project responsibles need to acknowledge that behaviors of the users change post system launch as employees adapt their way of working. This further emphasized the importance of bridging the gap of development and use. The two phases should be seen as in symbios rather than two independent workstreams (Thomas, 1994; Pollock, 2005, Cohen 2007). In different stages of the development, and later in the usage phase, different groups of employees are involved which has to be accounted for. Various users will bring different inputs based on their routines and work habits yielding different inputs. The social impact of the technology is thus important to map out. Managers thus need to understand how employees interact with each other and technologies and how this will be affected by organizational changes and artifacts. (Leonardi & Barley, 2008; Orlikowski, 1996)
2.3 Using information systems to drive organizational change
There are two terms that often arise in literature when analyzing governance using technology in companies; Information systems and Information Technology systems. While IT systems refers to the use of technology and computers to solve organizational issues (Slyter, 2019). The term information systems (IS) includes systems, employees and processes utilized to create, gather and distribute information. IS are not limited to softwares and can, at its simplest form, be a protocol. This implies that information technology (IT) is a subcategory of IS. (Juneja, 2019)
Implementations of a new IS opens up for possibilities in changing many aspects of a business. Organizations implement a new IS in order to change organizational routines and processes with the goal of achieving operational and strategic improvements (Heiskanen, Newman & Eklin, 2008; Sligo et al., 2019) . On a more granular level, IS could be used to create standardized ways of working, increase transparency or alter current work routines (Markus, Majchrzak & Grasser, 2002) . The implementation of IS therefore includes changing behaviors, work patterns and mindset among employees. However, studies within organizational change often analyze employees, soft factors and organizational structures, few studies mention IS solutions as a factor to drive change (Markus, 2004).
2.3.1 Technochange Projects and Systems Thinking
Organizational change driven and supported by technology and IS systems are referred to as technochange projects. Organizations need to realize the difference between an IS project and a technochange project. When implementing a new IS system, organizations focus on the technical specifications and improving the system technically (Harison &
Boonstra, 2009). Technochange projects, on the other hand, focuses on the entirety, how it affects employees, processes and overall business performance. This means adopting a systems thinking perspective that recognizes interdependencies and distinctions between perspectives, systems, employees and relationships. Neglecting the technochange perspective when driving change using IS could consequently yield unwanted results in other aspects than initially expected. Alternatively, organizational aspects not consider could inhibit the change expected from the implementation. (Cabrera & Cabrera, 2015; Markus, 2004)
Studies show that it is easy to neglect the bigger picture and solely focus on changing routines and technologies within the firm. Therefore, they need to embrace a systems thinking approach (Checkland, 1981). Technochange projects leads to disruptions in organizational structures, work processes and previous expertise among employees. This implies that the project is characterised by cross functional communication both in-house and with suppliers. Consequently, there are many stakeholders that need to be considered.
It is important early on in the project to conduct a stakeholder analysis to clearly map out their level of influence, engagement and cooperation in the project. Because of the nature of technochange projects, one improvement for one department could decrease performance of another which is why the systems thinking perspective becomes important. (Harison &
Boonstra, 2009; Markus et al., 2000)
A technochange project often involves transformations in the way employees work. It is important to be aware of the openness and willingness of the employees to change. Many attempts to change work process fail due to employees’ resistance to change the way they work. The biggest risks when implementing a new software to drive organizational change is that the employees continue to work as previously, i.e. do not change the way their working.
Instead, they develop workarounds to the system in order to perform the work as they perceive best (Markus, 2004). In addition, users of a new technological system often change their behavior over time from what was intended in the beginning (Orlikowski, 1996).
Consequently, changes in the system need to be done continuously to adapt to the new way of working. A software implementation is thus an interactive journey together with the users (Leonardi & Barley, 2008).
Common pitfalls include solely implementing the IS and then hoping for all synergies to be self-realized. This body of research is similar to the over reliance on artifacts presented in chapter 2.2. During the process of implementation, cultures, personnel behavior, and processes change all need to be weighed in for (Sawyer, 2000). As a result, proponents and drivers of the project need to have a holistic perspective of the project and possess knowledge in systems thinking. The outcome of the project is dependent on how managers cope with interdependencies that are affected by actions conducted in the project ( Cabrera et al. 2018; Checkland, 1981).
Three other aspects of systems thinkings are mentioned briefly in the literature. First, the history of the firm is important to recognize. This is because past changes made to the business affect the decisions and ways of working today. Moreover, previous decisions affects employees’ willingness and cognitive ability to change. Technochange projects are thus constrained by decisions made previously in the firm. This is an aspect that is complicated to recognize yet vital for the success of the project. (Collins, 1998; p.135;
Argyris, 1970). Secondly, communication and transparency are critical in a technochange project. These aspects are crucial in order to drive change and clearly reach out with goals (Goffman 1983; Schein, 1993). Thirdly, conflict-resolving competencies are emphasized as organizational changes often result in disagreements (Mahmood, 2007). If conflicts are not solved it can stall the project when conflicts can blossom and affect other parts of the business. (Harison & Boonstra, 2009)
In summary, studies conclude that there are three key aspects of a technochange project:
1. Process driven problematics, the project needs to be planned correctly and all aspects need to be recognized. Moreover, management need experience from similar projects that drive fundamental change in an organization.
2. Context driven issues, concerns company culture and politics arising as a consequence of the project.
3. Content driven aspects concerns technology-based questions like the development of the IT system and its specifications.
2.3.2 Status Quo Bias Perspective
The Status quo bias perspective describes why people actively and to a disproportionate degree choose to work against a certain line of action that will yield change. They become opponents to change even though the new routine/process could be better than the old one (Marakas & Hornik, 1996; Jeremias, 2001; Gawronski, 2012). Thus, the perspective becomes interesting when implementing a new IS system that create new ways of working.
It creates an understanding on why users may resist the implementation, resulting in delays.
The status quo bias is well settled in the fields of economy and psychology. (Samuelson &
Zeckhauser, 1988; Li, Liu & Liu, 2016; Guney & Richter, 2018)
The resistance is caused by fear of having skills or knowledge lost when implementing a new IS system. It can also be that employees feel that they lose the control of their jobs and get told what to do, i.e. they no longer manage their own time as they would like to/used to do (Polites & Karahanna, 2012). The feeling of losing control can arise from the implementation of a system that results in new work processes ( Kim & Kankanhalli, 2009).
More specifically, there are three aspects to the status quo bias:
● Loss aversion
● Transitions costs
● Social Norms
The first aspect, loss aversion is based on the understanding that people prefer avoiding losses than gaining the same value. The loss aversion consequently results in the status quo bias as a loss or hinder is amplified in perception. The behavior this yields is that employees rather seek to avoid any change rather than increasing benefits from changing working processes (Li, Liu & Liu, 2016; Kim & Kankanhalli, 2009) . The fundamental reason is that employees have their own routines and tools to conduct their work and manage the experience needed to get the job done. A new process might inhibit this employee’s way of processing knowledge which results in loss aversion. This is because they perceive the new system or change hollowing their knowledge and thus being less competent as individuals (Alessandri, Mammen & Eddleston, 2018; Lindsay, 2019)
Secondly, transition costs arise when people adapt and learn to follow a new routine. Often, new systems require the users to acquire completely new skills and work in a very different way this increases the cost of moving from status quo to the new scenario. This is because their competency and role in the company is threatened to be hollowed. This threat reinforces the status quo bias among employees and consequently their resistance towards a new system (Kim, 2011; Polites & Karahanna, 2012). The transaction cost perceived by the employees are weighted towards the benefits of the change. If the costs of change outweigh the benefits the employees will resist the change. Consequently, it becomes increasingly important to clearly communicate the benefits of the change. It is important to instill the feeling of improvement from the change among employees. Managers need to show their commitment and beliefs that the system will yield clear benefits. (Samuelson and Zeckhauser, 1988)
Lastly, social norms is the psychological aspect of the the status quo bias. This describes how individuals act in the context of other people (Ajzen, 1985). More specifically, the social norms affect how willing employees could be to change their way of working. People are influenced by group thinking and consequently a negative attitude could spread and cause a downwards spiral (Cenfetelli, 2004). This furthermore emphasize the importance of clearly communicating the benefits of change. Moreover, managers’ commitment to the process can hinder negativity and resistance caused by group thinking and influence by others. ( Gächter, Nosenzo, & Sefton, 2013)
These three factors can all result in the status quo bias among employees. Consequently, managers need to proactively work against these concepts.
2.4 Private equity firms
Private equity (PE) firms usually invests in mature and privately held firms. A PE firm’s only operation is to buy, hold and sell companies to a profit. The average investment horizon of PE firms is four to seven years. Consequently, PE firms focus on increasing the company valuation in the short-term (Upton & Petty, 2000; Wright & Robbie, 1998). When investing in a company, the PE firm can either take a minority or majority stake, however, this paper will focus on the latter (Schickinger, Leitterstorf, & Kammerlander, 2018) . In order to increase the valuation of the acquired target, many PE firms take an active role in the acquired company’s board to give strategic and operational advise. When a PE firm acquires another firm, they could either do a management buy-out (MBO) or a management buy-in (MBI).
Wood and Wright (2009) describe the difference as:
● MBO: The current management remains and purchases the assets and operations of the business they manage
● MBI: The PE firm assigns a new management team post-acquisition and replaces the existing management
Many times the PE firm’s ambitions intervene with the company acquired (Hall & Nordqvist, 2008). Acquired companies may have many non-financial goals while the PE firms solely focus on the financials(Berrone, Cruz, & Gómez-Mejía, 2012; Dawson, 2011). This problem is especially present when PE firms only acquire a minority stake in family owned firms.
Family members can occasionally make long term strategic choices at the expense of profits. This reduces the company’s attractiveness to outside investors which is undesirable for PE firms. This causes conflicts of interest which could inhibit the company’s growth and wealth. (Berrone et al., 2012; Fernando, Schneible, & Shu, 2014)
The acquisition process can include several complications and research regarding the area is crowded. PE research covers many subjects, e.g. finding attractive targets, valuation, negotiation and information sharing (Ahlers et al., 2016) . Moreover, the post-deal research, as mentioned by Chrisman et al. (2012), focuses more on the interactions of the PE firm and the acquired company. These areas of research falls outside the scope of this thesis which is why it will not be covered in-depth.
3. Methodology
In this chapter, we will explain the methodology used in our research. This include the methodological- rationale and approach together with a background to the researched case company. Furthermore, the process of analysis will be described to create transparency regarding how we achieved the results.
3.1 Methodological approach
The thesis uses a literature review and a case study as data gathering methods. The case study, which serve as the foundation for the empirical study of our thesis, include primary data collected from semi-structured interviews and observations. The interviews were conducted with interviewees from top management, production managers and production workers. This allows for a nuanced understanding of the historical events that are relevant for our research question. Furthermore, an analysis is then conducted to interpret the results to yield research contributions and managerial implications. More specifically, a thematic analysis is conducted to transparently and systematically derive results from interviews and observations.
As part of a thematic analysis the researcher combine an inductive and a deductive approach (Anna, 2011; Langemar, 2008). The inductive and deductive approach are two broad established research approaches for analysis (Trochim, 2006). Research following a deductive approach works from the “top-down”, whilst an inductive approach works from the
“bottom-up” Plano Clark and Creswell (2007).
Figure 3. Inductive vs Deductive approach
The strategy to do an inductive analysis, commonly referred to as a “general inductive approach” is a well established approach for analysis of qualitative data (Bryman & Burgess, 1994; Dey, 1993).Despite this, researchers describe inductive analysis differently. Thomas (2006)describe that inductive analysis refers to approaches where new themes, concepts or models are derived from raw data. Other researchers describe the inductive approach in similar ways, e.g. Strauss and Corbin’s (1998), which describe that the inductive approach allows theory to emerge from interpretations of the data by the researchers. Both of which fits Plano Clark and Creswell’s (2007) description of “bottom-up”.
The other common research approach is deductive analysis. A deductive approach starts off with a body of research from which the hypothesis arises. The researcher then choses a relevant method to prove or disprove its hypothesis (Wilson, 2010).The deductive approach is more commonly used in quantitative analysis and the inductive approach is more commonly used in qualitative analysis (Karen, 2010).
However, best suited for our thesis is an abductive approach. The abductive approach enables researchers to go between theory and observations in their research. Consequently, the data gathering is dynamic and depends on information arised in either the case study or the literature review. Moreover, we use an abductive approach as this enables us to better observe and ask better questions at the interviews as we better understand the subject and the problems that can arise. Moreover, the approach enables students, as ourselves, to read and gather data in a back and forth way. This enables us to better grasp concepts, perspectives and established theories to develop theory and follow conventional research processes. (Awuzie & Mcdermott, 2017)
Consequently, the research approach has been a dynamic process, where the scope of relevant literature has changed in pair with the progress of the study. While conducting the case study, new themes and concepts were derived as we gained a deeper understanding of the case. Therefore, we argue that a continuous literature review is feasible as it allows for a dynamic scope of relevant literature. Moreover, this follows the structure of an abductive study.
3.2 Researched case company
3.2.1 Case company
This master thesis was conducted together with a private equity firm at one of their portfolio companies, aside from supervision from the university. The private equity firm has a diversified portfolio with companies of varying sizes, and from multiple industries. In the illustration below, the private equity firm’s current portfolio is illustrated.
Figure 4. Private equity firm’s current company portfolio
The portfolio company, in the figure above referred to as “Company X”, is operating in the fast moving consumer goods industry with perishable food. The portfolio company was established in 2018 as a result of merging six companies. We believe the case company serves as a relevant case selection based on the research question and scope of the thesis.
For the benefit of clarity, we want to emphasize that the study will not analyze research concerning PE firms and their acquisitions, neither will we focus on ownership models.
Consequently, the focus of the report will be on the portfolio company, however, the PE firm is mentioned to increase transparency, as it remains a key stakeholder.
By doing a case study, we believe that we get hands on information and practical information in its context. According to Gibbert, Ruigrok & Wicki (2008) case studies are often conducted when managerial implications are of interest. However, it is of equal importance to have a rigorous case study to create relevancy in the context of research (Scandura & Williams, 2000). In order to achieve a rigorous case study and a credible report, we have followed the advices from our supervisor and inputs from seminars during the course of writing this thesis as well as followed acknowledged methodologies from research.
3.2.2 Portfolio company background
The PE firm acquired six companies in the fast moving consumer goods (FMCG) industry in 2017. The acquired companies had a turnover of between 20 MSEK and 100MSEK. The companies were in different financial shape, where profit margins ranged from -20% to 5%.
In 2018, the acquisitions were consolidated into one common production facility with a revenue of approximately 200 MSEK. As a result of this, a common brand was established in 2018 for the merged companies. Subsequently, the owners have worked on increasing margins by improving sourcing, pricing, routines and increasing presence in the local areas.
Since the consolidation, issues regarding how employees work and collaborate have been an ongoing problem. Each employee had previously worked for a small, family-owned company, where all the employees knew each other. Consequently, they were not used to working at a industrial company with standardized working routines. Instead, each employee worked according to their old habits. Problems associated with lack of standardized working routines became especially apparent in the warehouse. Most of the employees originated from a small size company with no, or a very small, dedicated warehouse area. Therefore, the employees had limited experience working in a warehouse that because of the size, required standardized processes to run efficiently.
This has caused management to have little-to-none control over material locations, quantity on hand, and material flow. Inefficiency costs associated with the low degree of material- and space utilization have been estimated by management to approximately 1 MSEK per year. In order to achieve standardization within the warehouse, and to increase the material- and space utilization, the PE firm decided to implement a warehouse management system (WMS).
A WMS is an IT-system designed to assist organizations and management with managing, monitoring, and optimizing warehouse functionality and layout. This aims to facilitate operations such as purchase ordering, goods receival, put-away rules and raw-material in/out flow from the warehouse.
However, despite the management's decision to implement a WMS, employees kept following old habits and working routines. As a result, the project has not yielded the cost savings and efficiency increase management expected.
For this thesis, The PE firm want us to an in-depth research regarding IT-system implementation in order to understand what went wrong, and what to do differently next time.
In addition to the literature contribution of this thesis that we aim to achieve, the managerial implications of our findings therefore remains as another primary goal of our findings.
Henceforth, the WMS system will be referred to as an information technology system to increase the generalizability of the report. We believe the implementation of a WMS to change work patterns have many similarities with the implementation of other IT systems aimed to drive change. We based this on the rationale that the WMS was aimed to drive changed patterns and routines within the analyzed case company in order to improve the organization’s efficiency. The implementation thus had several similarities to research and case studies within the field, e.g. lack of communication between system developers and users, neglection of the interdependency between employees and systems, employee resistance and lack of education.
3.2.3 Case study rationale
In order to answer our research question, a single case study at a mid-size bakery has been conducted. According to (Yin, 2018), the feasibility of a case study design is dependent on three conditions:
(1) The form of research question
(2) The control the researcher has over actual behavioural events (3) The degree of focus on contemporary events
Furthermore, there are three types of case studies; Explanatory case studies, descriptive case studies, and exploratory case studies. Which type of case study one should conduct depends on the fulfilment of the conditions above.
For condition (1),(Yin, 2018)mention that if the research question is composed of “what”, an exploratory case study may be feasible if the goal is to develop pertinent hypothesis or propositions. As our goal is to develop propositions for how managers can cope with different working routines in a PMI scenario, we argue that this condition is fulfilled.
For condition (2),(Yin, 2018)mention that in order for a case study to be feasible, it needs to have some elements of both recent historical events, and present. Consequently, researchers should be able to analyze recent historical events that is relevant for a present
