People integration during mergers and acquisitions: managing emotions & communication

Abstract

Mergers and acquisitions have become common for organizations that look for growth in an efficient way. The human resource aspect of these integration processes are very important to ensure a clean and successful completion. However, leaders ignore the human angle in most integrations. This ignorance results in change communication which causes the integration to fail. For this process of failure, past research has indicated many contributing factors of which emotions are a major part. However, the linkage between communication from leaders and success or failure of an M&A process due to the impact on emotions of employees is missing in the past investigations. This paper develops the concept of communication of leaders giving rise to six different categories of emotions resulting from positive or negative emotions during the three phases of change, namely pre-integration, during integration and post-integration. Merger syndrome and Herzberg’s two-factor theory along with cases from different geographies and industries have been considered to conceptualize the impact of the communication from different leaders i.e. top management team, HR leaders and Board members; on the emotions of employees to drive the success or failure of the M&A in terms of cultural integration, motivation & retention of employees and financial success of the merged entity.