Mergers and acquisitions (M&As) continue to be a popular means for firms to grow, internationalize and gain access to new technologies. New research brings us one step closer to understanding this challenging process.

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In a study I recently conducted with Audrey Rouzies from the University Toulouse Capitole, we explored the acquisition of a small family owned Norwegian firm by a French multinational metals and mining company.

Our study followed the integration process over three years as the Norwegian family owned firm was integrated into the French multinational’s Norwegian subsidiary. As we interviewed managers and employees in both the newly acquired and the existing subsidiary plants, we soon discovered that a set of actors that is largely ignored in the M&A literature, played a key role in the integration process. These were the unions of the firms.

Union representatives’ role in the integration process

Post-acquisition integration is key to achieve the expected benefits of the acquisition. It involves the combining of the acquiring and target firms organizations, processes and activities. However, many firms struggle to achieve the desired level and speed of integration. Furthermore, integration often leads to disruptions to existing business through employee resistance and conflicts.

We found that union representatives were key in addressing these challenges. They acted as boundary spanners that both accelerated integration and decreased disruptions from the integration process.

Immediately following the announcement of the acquisition, they initiated contact with the union representatives in their partner plants. They shared knowledge about their respective plants and promoted the acquisition to their merger partner. Furthermore, as the process unfolded, they continued to share knowledge, mitigate conflicts and contribute to integration between the plants.

The union representatives also contributed to integration by sharing information and promoting the acquisition within their respective plants. They relayed the knowledge about their merger partner both to their peers on the shop floor, and with plant managers. In this manner, union representatives helped manage employee resistance and conflict within the plants.

Boundary spanning and existing relationships

We found that the contingencies for these boundary spanning actions were the union representatives’ existing relationships. First, the union representatives had existing relationships across the plants through their union affiliation. Second, they had existing constructive relationships within the plants, both with management and with the shop floor workers. These existing relationships allowed them to span the boundaries, both between the merging firms and between the levels in the hierarchy of the organization.

In the strategy research on mergers and acquisitions, it is often presumed that managers do most of the planning, implementation and communication, but our research shows that other actors may play an important role.

The role union representatives have as boundary spanners, and the importance of their pre-existing relationships and networks, adds another piece to the puzzle of mergers and acquisitions and provides new insight into what constitutes successful integration.

Only a small number of academic publications ranks as the best in their field world-wide. Last year, 16 BI researchers published papers in these ABS4* journals. These journals are considered among the highest in terms of impact factor and have the highest requirements of data and rigour in theory. Throughout 2019, we highlight these academics, their research and its impact on society.

Reference:

Colman, Helene Loe; Rouzies, Audrey: Postacquisition Boundary Spanning: A Relational Perspective on Integration. Journal of management 2018

 

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