NHRD Journal - National HRD Network

the merger, in whichever form has an impact
on them and thus, the 'People and
Organizational Issues' need to be factored in
and addressed in the context of merger.
The dynamics involved in the merger process
gives rise to different kinds of uncertainties in
the merger processes. Previous research has
shown that employees react unfavorably to
mergers and acquisitions. There are two
conditions that generate deprivation:
discrepancy between actual and desired
outcomes and a discrepancy between actual
and deserved outcomes. An organization
transformation process like merger could affect
the desired and deserved outcomes and impact
the actual; thus increasing the perception of
discrepancy. This could result in a feeling of
deprivation, leading to adverse reactions
(Buono and Bowditch, 1989). It has been argued
that the individual responses in a merger or
acquisition process are part of a fairly
predictable syndrome of merger related stress
and tensions. Again, human responses arise
from four factors:
1. Culture clashes that arise when
dissimilar cultures come into contact with
each other. The merger or acquisition
requires members of one organization to
interact with members of the other
organizations with different cultures,
behaviors, ideas, manners and working
styles. Cultural differences between
merging organizations influences the
extent of employees participation and the
creation of an atmosphere supporting
capability transfer.
2. Further, separate from cultural
differences, there exists an intense feeling
of "we versus they" resulting in distrust,
tension and hostility towards the other.
It has been sufficiently documented that
there exists a strong 'We versus They'
feeling even in cases where perceived
cultural differences were not very large.
3. Uncertainty associated with Process:
Uncertainty, as a reaction, is caused when
there is lack of understanding about the
causal relationships between the actions
and the potential outcomes of those
actions. Since the process of Merger and
the changes it brings forth are
evolutionary and the final outcomes are
not known during the pre-merger and
through merger period, it creates
uncertainty and ambiguity in
individuals, along personal, professional
and organizational dimensions.
Uncertainty, in context of merger leads
to dysfunctional outcomes like stress,
lowered job satisfaction, distrust and
decline in commitment, affecting job
performance.
4. Anxieties on account of the effect or
perceived effect it has on career plans
through transfers, job loss, relocation,
loss of individual influence and the
uncertainties associated with these
changes (Buono and Bowditch, 1989;
Larrson and Finkelstein,1999).
These factors, as mentioned earlier, give rise to
negative reactions in individuals--often
manifesting itself in active opposition (e.g.
voice, voluntary exits and sabotage) and
passive opposition (e.g. absenteeism,
disobedience), -- reducing their commitment to
successful integration of the organizations and
the extent to which they are willing to cooperate
with the members of the other organization
(Weber et al, 1996). As such, the negative
human responses do have an adverse effect on
the individual performance and effectiveness;
in the long term having an affect on the
organizational effectiveness.
Managing 'Organization and People Issues'
in the Context of M&A
Given the fact that mergers and acquisitions
would continue and there are bound to be
negative reactions from individuals in the
context of merger, the critical element is what
November 2007 NHRD Journal 87