POST-MERGER CONFLICTS - An explorative perspective on the application of conflict theories in merger analysis

Abstract

Purpose The aim of this study was to find out how the application of a conflict theory perspective can contribute to new and/or different knowledge in the field of mergers and acquisitions, as compared to the more commonly applied organisational cultural, financial and strategic theoretical approaches. This was achieved by first answering two research questions regarding the nature of conflicts in a post-merger case. To conclude with a final question: How can conflict theory add new and/or different insights to the research field of mergers and acquisitions? Theoretical framework For the understanding of different levels of action in conflict, the theory Levels of action by Jordan (2015) was used in this study. To deal with the relational aspects of conflict, the ABC-model by Johan Galtung (Jordan. 2015) was applied. The ABC-model served to gain an understanding of what the conflicts were about and what the causes of the conflict might have been. Finally, the theory on procedural justice by Gleason and Roberts (1977) and power dimensions as described by Jordan (2015) was applied as an addition to the ABC-model. Method A case study conducted at two Norwegian locations of a company in the security technology industry. The study applied qualitative method with semi-structured interviews with managers and employees as primary data source. Exit interviews and an employee survey were included as secondary data sources. In order to add nuance a comparative analysis was performed between the different data sources. This enabled the multiple data sources to support each other and contributed to the trustworthiness of the results. Results Previous research has suggested that strategic and financial perspectives to mergers and acquisitions is an insufficient measure of success (Weber et al. 2012). The solution to that has been to apply theories with a stronger emphasis on the human aspects, such as organisational cultural theory (Buono. 2003; Sarala, Vaara & Junni. 2017). However, little research has pointed out the possible limitations in applying such an approach. It seems as if there has been a common understanding in the research field of mergers and acquisitions, that implications and success of M&A’s can now be sufficiently explained with the addition of organisational cultural theories. However, the findings in this report suggests the contrary. By applying a conflict theory perspective to the analysis of a merger it was possible to produce much more differentiated findings than if applying strategic, financial and organisational cultural theories. The results indicated that there was a complex interrelation between different causes of conflict and the nature of the conflicts. Furthermore, the analysis pointed out specific types of conflicts which had been caused by the merger. The causes of conflicts were found on all levels (i.e. individual-, relational- and systemic -levels). However, the systemic level was the primary source of conflict in this case.