Mergers and Acquisitions (M&As) are tough. It seems they rarely realize their potential, and both the academic literature and business press are filled with stories of organizations that fail to achieve the returns they expected from M&As. The academic literature has recently emphasized the way incongruent cultures of the two merging firms may be responsible for many common M&A problems. If two companies have much different organizational cultures, then there may be problems. The question then becomes - what can managers do about it? Actionable research into improving M&A outcomes on a cultural level is sparse.
Todd Creasy (DM 2007) and Mike Stull (DM 2005) have begun rectifying this situation with their study of employees and M&As in an article that was recently published in the Journal of General Management. Working with Case Western faculty Simon Peck, these two DM graduates surveyed employees that have recently experienced M&As in an effort to investigate how managers might improve their job satisfaction and their organizational citizenship in the wake of an M&A. In addition to other findings, a key element of M&A success appears to involve the notion of "procedural justice." As Creasy, Stull, and Peck indicate: "Management should make certain that decisions are fair and equitable to all parties, communicated overtly and honestly and are open to questions." According to their findings, procedural justice directly encourages corporate citizenship, and also encourages employees to identify with the newly merged organization and helps send a message to these employees that the newly merged organization is there to support them.
The article was based on Dr. Creasy's quantitative research he pursued in the third year of the DM program. Reflecting on the program, Dr. Creasy indicates that the DM program really equipped him with the tools to tackle such research: "The experience itself was wonderful... world-class education on how to really perform research, really consume research and make sense of it... Once you begin to read theories and understand them, you begin to look at situations through these lenses... it makes your thinking, your conversation, and your work so much more robust."
After completing the DM program, Dr. Todd Creasy (left above) has continued his consulting work and is now a full-time faculty member with the Western Kentucky University. Dr. Michael Stull (right below) was Dr. Creasy's methods advisor in the DM program, and Dr. Stull is a member of California State University San Bernardino's faculty.
The article is titled "Understanding employee level dynamics within the merger and acquisition process," and was published in Volume 35 (Winter 2009-2010) of the Journal of General Management: http://www.braybrooke.co.uk/dynamic/viewarticle.php?articleid=181.