Socio-Cultural Integration in Mergers and Acquisitions

Post-acquisition socio-cultural integration has received increasing attention from both scholars and practitioners since the early 1990s. During the past decade, research has increasingly focused on emotions and identity in mergers and acquisitions. This chapter introduces the reader to the vibrant research field and its relevance. This section sets the scene for the book, which provides a deeper understanding of how emotions—both positive and negative—as well as values and identity enable a deeper socio-cultural integration after a merger or acquisition, and how leadership plays a crucial role in making it all happen. This chapter also highlights how the Nordic approach to post-acquisition socio-cultural integration refers to a large community of Nordic academics focusing on the softer social and human side of acquisition, often relying on a huge variety of qualitative methods, and to Nordic companies that are not afraid of adopting a more collaborative approach to post-acquisition integration.

This chapter digs deeper into the theory and practice of why and how emotions emerge during mergers and acquisitions. The chapter discusses emotions from a cognitive appraisal theory viewpoint, and examines them in practice through a case study of a Finnish–German acquisition where employees were invited to reflect on their emotions regarding integration. The findings suggest that acquisitions raise several emotions, both positive and negative, both in the acquiring and acquired companies. These emotions are triggered by events employees perceive as personally relevant in the workplace. The conclusions offer managers ideas on how to foster positive emotions at different organisational levels to enable smoother and swifter integration following an acquisition.

Values are an integral part of an organisation’s identity. However, during mergers and acquisitions, the accustomed values and, consequently, the identity of an organisation may be threatened. This can cause defensive behaviour that can be detrimental to organisational change efforts. In this chapter, we suggest a joint identity construction as a way to overcome such threats. We look into the relational approach to identity construction, arguing that through values, organisations can attempt to harmonise members’ identity work during post-acquisition integration. Such attempts are well illustrated in our empirical case.

This chapter explores middle managers as agents and recipients of change when involved in mergers and acquisitions. We capture the characteristics of middle managers, who, when faced with such radical organisational change, not only have to personally thrive amidst this change, but, moreover, must act as the driving force of this change. The middle managerial challenge is embedded in this double-hatting—simultaneously delivering, while personally living through the same change. We argue that middle managers’ development towards leadership positions depends on their ability to personally undergo and lead such changes when and where they arise. This requires learning to both implement change and personally make sense of change. Going forward, we call for more attention to be given to the ‘inner world’ of change agents.

Speed in integration may not always deliver what it promises. If organisational unity is sought for, the integration should not be regarded as a one-time ad hoc event, but rather as a long-term socio-cultural process. By evaluating employees’ perceptions of fairness in their organisation the chapter suggests how fairness may constitute the building of organisational unity in a multinational organisation after a merger and acquisition. From the data collected in seven different countries, cultural differences in interpreting fairness in an organisational context are also noted.

This section provides an overview of the book and introduces future research avenues. Socio-cultural integration is a complex process involving many activities, events and, most importantly, human engagement. This book does not offer a comprehensive, holistic approach to socio-cultural integration, but instead it highlights the role of emotions and values in the identity-building process and formation of a joint culture.