A qualitative study on resistance to change and its impact on organizational harmonization in M&As.

Abstract

M&As are regarded as a strategic approach to achieve corporate growth. Many M&A ventures have failed to achieve the desired results, which highlights the complexities surrounding M&As and why many of such failures have been recorded over the years. The focus has been on the financial and strategic reasons for these failures which have left other significant areas such as the integration process uninvestigated in the effort to understand M&A failures. To investigate the importance of the PMI process to the performance of M&As, this study explores employee resistance to change in the acquisitions and the key traits and approaches of managers in managing the PMI process successfully. This study has adopted a qualitative research strategy with a multiple case study of four SMEs that have been acquired by larger MNEs in both domestic and international contexts. Findings showcase that employee perceptions of change are developed over time. While negative employee perceptions influence resistance, it is usually fueled by how changes are managed. In the case of SMEs acquired by MNEs, employee attachment to acquired company culture can influence their resistance to changes when the acquired companies embark on major changes too quickly. Furthermore, the study found that for managers to effectively manage the integration process they need to have a good knowledge and understanding of changes, be clear and transparent in their communication, and have good interpersonal relations which builds employee trust in managers.