but it may exacerbate the stress of the transition when expected decisions are
not forthcoming.
Another aspect associated with speed is the need for management to
demonstrate to the employees that the merger/acquisition is showing signs of
success quickly, and to communicate the accomplishments to the whole orga-
nization. One of the fundamental principles of successful change is that of cel-
ebrating small wins (Kotter, 1996; Kouzes and Posner, 1987). This has the
salutary effect of reinforcing in the minds of people that the decision to merge
was a good one, diminishing the influence of those who are critical of the
merger, and increasing morale in the new organization.
The optimal speed depends on the strategic intent behind the acquisition
and the desired end-state for the culture of the new organization. Absorption
or transformation strategies generally require more urgency than those ori-
ented to preservation. When the objective of the acquisition is to acquire
knowledge and intellectual capital, the pace of change must be especially care-
fully calibrated to minimize the risk of alienating talent.
Obviously, speed can be increased proportionately to the degree to which
a comprehensive integration plan has been formulated in the pre-merger
phase. The old adage ‘speed kills’ is still true if decisions are being made with-
out a context of a carefully crafted plan. Alternatively, a slow pace due to the
lack of a credible plan also has a negative impact, as it reinforces in the minds
of many subordinates that no one amongst the executives knows what they are
doing, that no progress is being made, and that the entire merger or acquisi-
tion was a folly to begin with. This argues, of course, that good preparation
during the pre-merger/acquisition phase is vital if the post-merger phase is to
be successful.
5 CONCLUSION AND IMPLICATIONS FOR MERGER
AND ACQUISITION PRACTICE
In M&A special emphasis is usually placed on the strategic and financial goals
of the transaction while the psychological, social, and cultural implications do
not receive much attention. The purpose of this chapter has been to delineate
the dynamics of people issues and cultural processes inherent in M&A, and to
discuss their implications for the management, in particular the human
resource management, of M&A.
Whether a merger or an acquisition fails or succeeds depends primarily on
the management of the post-combination integration process (Haspeslagh and
Jemison, 1991; Jemison and Sitkin, 1986). While the conditioning factors in a
M&A, such as buyer strategy, prior acquisition experience, or initial cultural fit
between the combining organizations, form the upper limit on the degree of
HRM in Cross-Border Mergers and Acquisitions 107