Business and Management INK

Post-Merger Integration: It’s All About Positive Emotions, Isn’t It?

February 7, 2022 1460
One blue cable in strand of white cables being wound
(Photo: DCG_MAK/Pixabay)

In the post below, David P. Kroon and Hannah Reif discuss their article, “The role of emotions in middle managers’ sensemaking and sensegiving practices during post-merger integration,” published in Group & Organization Management. Their thoughts appear below the abstract for the academic article.

In this in-depth, qualitative case study, we elucidate how the emotions of middle managers impact their sensemaking and sensegiving practices during post-merger integration (PMI). The recursive and reciprocal interactions between emotions, sensemaking, and sensegiving we observed led to the development of a process model illustrating how middle managers make sense of the PMI phase through the processes of “senseseeking” and “rationalizing.” The model further demonstrates two important sensegiving practices, “emotional reversal” and “emotional hiding,” which turned out to be essential drivers for enacting (positive) emotions among organization members. Our findings have important implications for research on sensemaking and sensegiving, the crucial role of middle managers in organizations, and studies on PMI.

Merger and acquisition (M&A) activity has exceeded historic levels in recent years. At the same time most M&As reportedly fail, or do not live up to expectations. It is therefore not surprising that both practitioners and academics have long been interested in explaining M&A outcomes.

It seems that post-merger integration is one of the most crucial phases in determining the success or failure of M&As. We had a unique opportunity to observe a company that was going through such an integration phase. Already at the beginning of our study we realized that several factors impacted the transition towards the new firm. The alignment of systems, processes and structures posed challenges, but these seemed small in comparison to the integration of people. A closer examination of the human aspects of post-merger integration led to the conclusion that it is not just about finding a common way of working or the creation of a shared culture, but that emotions play a decisive role in a post-merger integration process.

David Kroon and Hannah Reif headshots
David P. Kroon, left, and Hannah Reif

The greatest challenge of our study was to actually reveal these emotions and the role they play during a post-merger integration phase, as people tend to be reluctant in talking about their emotions. In organizational settings emotions are often ignored or only given superficial attention. However, in particular middle managers are presumed to have a high level of emotional competence. Therefore, we decided to focus our study on this group of organization members and we were able to collect data by means of interviews, observations, and company documents.

One of our most interesting findings is that negative emotions turn out to have a positive impact on the post-merger integration process. Although previous studies point almost exclusively to their negative consequences, our study suggests the opposite and explains how middle managers turn these negative emotions into positive emotions for themselves as well as among their subordinates, through delicate interactions with their sensemaking practices.

In the end, we believe that our study changes the way people view the role of emotions, in particular during post-merger integration. Not only do emotions impact middle managers’ as well as employees’ behavior but they can also explain the success or failure of human integration and, as a result, are crucial in predicting M&A outcomes.

David P. Kroon is an associate professor of strategy and organization at the School of Business and Economics of Vrije Universiteit Amsterdam, the Netherlands. Hannah Reif is an instruments and field service specialist at Merck Life Science.

View all posts by David P. Kroon and Hannah Reif

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