Resistance to change in the case of mergers and acquisitions: part 1

• Published in: Industrial and commercial training Vol. 49; no. 2; pp. 87 - 92
• Main Authors: Appelbaum, Steven H., Karelis, Catherine, Le Henaff, Anne, McLaughlin, Beverly
• Format: Journal Article
• Language: English
• Published: Guilsborough Emerald Publishing Limited 06.02.2017; Emerald Group Publishing Limited
• Subjects: Acquisitions & mergers; Communication; Employees; Job satisfaction; Occupational training; Organizational change; Perceptions; Studies; Success; Change management; Transformational leadership; Mergers and acquisitions; Organization culture; Resistance to change
• ISSN: 0019-7858; 1758-5767
• DOI: 10.1108/ICT-05-2016-0032

Purpose Mergers and acquisitions (M&A) are inherent to firms evolving in today’s business world, whether they be corporate giants, SMEs or start-ups. While the ultimate objective of an M&A is to improve the newly constructed firm’s performance, financial and technical impacts are but some of the considerations the organization will need to face. Indeed, employee resistance appears to be a major factor in the overall success of this strategic move. The purpose of this paper, three part, is to provide a thorough overview of the forces at play in employee resistance to change, its influence on the M&A’s success, and the ways to address such resistance. Design/methodology/approach Based on existing empirical studies, industry expert findings and academic reviews, this paper sought to link together the concepts of communication at a time of change, leadership, employee involvement, feeling of adherence to the firm (the four key pillars) and their respective influences in how they may handicap or aid the firm in achieving its M&A objectives. Findings Although it may seem like a straightforward concept, resistance to change in the turbulent time that is a merger and acquisition situation is anything but simple. Classic assumptions of resistance being a negative force or participation being a requisite part of overcoming resistance are challenged. At the same time, leadership and employee feeling of adherence to their previous organization play a supporting role when compared to the significant influence of communication pre, during and after the merger. The ensuing portrait is thus multifaceted and underscores the complexity of handling an M&A at the human resources level. Research limitations/implications Whilst the paper allowed to identify and link the different factors at play, a thorough empirical study in order to compare and contrast those factors at an M&A’s different stages (pre-during-post), and thus evaluate their respective importance, would be commendable. Practical implications In providing an overview of several aspects at play in employee resistance to change, this paper allows a management practitioner to consolidate their knowledge on the process’ four key pillars. Social implications By illustrating not only its – expected – negative outcomes, but by also providing a glimpse at some potential benefits in terms of increased merger performance, this paper gives managers incentives to not always challenge but also embrace their employee’s resistance to change as a healthy part of the firm’s transformation process. Originality/value This literature review provides an overview of resistance to change and draws parallels between the concepts explored herein and the M&A situation, which would be useful to the general practitioner undergoing an M&A.