Examples Of Post-Acquisition Integration

Post-acquisition Integration

As mentioned before, culture is unique for each organization. There are no two companies are totally fit in term of their culture, therefore, every company in M&A have to experience an acculturation in the post-acquisition integration process. Larsson and Lubatkin (2001) defined acculturation in M&As as “the outcome of a cooperative process whereby the beliefs, values, and assumptions of two previously independent companies create a jointly determined culture.” Vancea (2011) suggested four possible strategies for acculturation. The first one is “integration” which means a combination of the two cultures through a reciprocal influence. The second strategy is “assimilation” which requires the adoption by the company

On one hand, it creates values for the company which may help to increase competitive advantage, on the other hand, it inevitably creates changes in the company as well. It may include relocation of production line, integration or development of systems in several aspects such as financial, information technology, marketing and distribution, management style, human resources practices such as staff movements or redundancies, and importantly corporate cultures. At this stage, employees may have a feeling of stress and anxiety due to a fear of losing their job or difficulty to adapt to a new culture or new manager after M&A. This stress of employees usually comes from uncertainty rather than changes. Employees may rely on rumors to reduce their uncertainty if there is a lack of formal information from management regarding on the M&A. This kind of rumors usually enlarges the negative information and would create greater stress or tension among employees. Therefore, communication is a key in the post-acquisition integration. Weber & Drori, (2011) argued that communication not only helps to reduce uncertainty, negative attitudes and behaviors of employees, but also increases cooperation and commitment of employees, enhance company’s image of caring and trustworthy, and ultimately establish a new organizational identity. Communication allows management to have a better understanding on the point of view of employees from the acquired company. It can also help to identify their concerns and keep monitoring their attitudes and expectations throughout the whole integration process. In order to mitigate their worries, the focus of communication should be on the employee’s major concerns in the M&A such as arrangement of redundancy, changes in compensation and benefit, work