An exploration of the influence of sensemaking on the process and outcomes of postmerger integration. Case studies in four manufacturing companies

Abstract

Mergers and acquisitions have become very popular in recent decades for firms seeking competitive advantage. The high failure rates of these initiatives make a closer look at the influence of the human factors and their complexity on these change activities necessary. This study traces the development of merger and acquisition activities in four companies, with a particular focus on individuals’ sensemaking over time and on the influence of human functional factors on the process and the outcomes of the mergers reviewed. A qualitative case-study approach is adopted with sixteen in-depth semistructured interviews in four post-merger organisations. The analysis of the collected primary data is done through a descriptive analysis of each individual case and a cross-case analysis of the four investigated cases. The findings show that there is a direct influence of the researched human functional elements and of the individual sensemaking on both the process and outcomes of the reviewed merger and acquisition cases. Based on the findings, a human functional merger and acquisition model – reflecting the interaction and influence of the human functional elements – and a management guideline for adopting this, are developed. This study provides a review of the influence of some significant organisational and individual human functional elements, such as leadership, communication, decision-making, relationship, and individual beliefs, values, attitudes and learning on the process and outcome of mergers and acquisitions. Such an investigation of these elements and their complexity, interaction with and influence on the process and outcome of change initiatives, and more specifically in the context of mergers and acquisitions, has not been undertaken previously.