Merger and Acquisition Communication Essay

In the present day, mergers and acquisitions are regarded as an intrinsic part of American business sphere. The main reason of two entities’ consolidation is the improvement of overall performance (Appelbaum et al., 2000). In addition, firms are united for other purposes, including the exploration of new markets, globalization, the creation of economies of scale, acquisition of new competences, and competitiveness (Papadakis, 2005). However, this process is associated with particular people-management issues that “are considered to be responsible for between one-third and one-half of all failures” during it (Zagelmeyer et al., 2018, p. 93). In other words, mergers and acquisition inevitably affect employees, and their impact started to attract the particular attention of researchers and managers for efficient response.

First of all, mergers and acquisitions are primarily associated with uncertainty that cannot be easily mitigated or avoided as these processes are frequently complex, unpredictable, and evolutionary. At the same time, in a considerable number of companies, managers fail to articulate changes, explain their consequences, and support employees. As a result, personnel rely on informal communications, rumors, and unverified or even fake information in order to reduce uncertainty concerning their future (Schweiger & Denisi, 1991). However, these means do not facilitate but contribute to the development of stress, anxiety, absenteeism, and resistance to changes among workers. In addition, according to Bartels et al. (2009), mergers and acquisitions may have a highly negative impact on employee identification. Without reliable information, employees who are highly committed to their organizations may perceive any restructuring as a direct threat to their well-being and self-esteem. As a result, employees’ stress, anxiety, and uncertainty lead to poor communication, employee turnover, integration difficulties, and a loss of productivity and motivation.

On the basis of this issue’s significance, multiple studies were organized for efficient response. Therefore, the majority of them indicates the necessity of appropriate communication strategies before and after merger or acquisition to reduce employees’ uncertainty and related stress (Papadakis, 2005). Zagelmeyer et al. (2018) identify several stages of communication process, including planning and preparation, due diligence, negotiation, agreement, and postmerger integration. Information about merger should be initially available only for specific employees and managers who will be responsible for articulating it and managing others’ emotions. Thus, Zagelmeyer et al. (2018) emphasize the significance of managers’ competence and communication and interpersonal skills as they ensure the success of merger communication. Moreover, employees’ acceptance or rejection in relation to merger depends on managerial communication style and the accessibility of official and reliable information to the fullest extent.

The efficiency of constant communication with workers prior to merger, during this process, and after it supported by the empirical results of experiments. For instance, Schweiger & Denisi (1991) evaluate a particular program of realistic communications called a realistic merger preview and its impact on the well-being of employees. According to the study’s results, employees who receive the preview demonstrate fewer dysfunctional outcomes in comparison with workers who receive limited and unreliable information (Schweiger & Denisi, 1991). They allow to conclude that in the case of mergers and acquisitions, it is incorrect to undervalue employee’s emotions and attitudes to these processes as their emotional state affect the company’s growth and development. That is why, managers should apply appropriate communication strategies to address people’s concerns, uncertainties, and negative emotions through honesty, openness, patience, the availability of reliable information, and negotiations.

References

Appelbaum, S. H., Gandell, J., Yortis, H., Proper, S., & Jobin, F. (2000). Anatomy of a merger: Behavior of organizational factors and processes throughout the pre‐during‐post‐stages (part 1). Management Decision, 38(9), 649-661.

Bartels, J., Pruyn, A., & de Jong, M. (2009). Employee identification before and after an internal merger: A longitudinal analysis. Journal of Occupational and Organizational Psychology, 82(1), 113-128. Web.

Papadakis, V. M. (2005). The role of broader context and the communication program in merger and acquisition implementation success. Management Decision, 43(2), 236-255. Web.

Schweiger, D. M., & Denisi, A. S. (1991). Communication with employees following a merger: A longitudinal field experiment. Academy of Management Journal, 34(1), 110-135.

Zagelmeyer, S., Sinkovics, R. R., Sinkovics, N., & Kusstatscher, V. (2018). Exploring the link between management communication and emotions in mergers and acquisitions. Canadian Journal of Administrative Sciences, 35(1), 93-106. Web.