The Story of Mergers and Acquisitions: Using Narrative Theory to Understand the Uncertainty of Organizational Change

Authors: Philip T. Roundy

Abstract:

This paper examines the influence of communication form on employee uncertainty during mergers and acquisitions (M&As). Specifically, the author uses narrative theory to analyze how narrative organizational communication affects the three components of uncertainty – decreased predictive, explanatory, and descriptive ability. It is hypothesized that employees whose organizations use narrative M&A communication will have greater predictive, explanatory, and descriptive abilities than employees of organizations using non-narrative M&A communication. This paper contributes to the stream of research examining uncertainty during mergers and acquisitions and argues that narratives are an effective means of managing uncertainty in the mergers and acquisitions context.

Keywords: Narrative Theory, Mergers and Acquisitions, Employee Uncertainty.

Digital Object Identifier (DOI): doi.org/10.5281/zenodo.1063048

References:

[1] M. Kroll, B. A. Walters, and P. Wright. (1997) "Board vigilance, director experience, and corporate outcomes." Strategic Management Journal 18: 363-82.
[2] D. Gupta and Y. Gerchak. (2002) "Quantifying operational synergies in a merger/acquisition." Management Science 42: 517-33.
[3] K. M. Ellis, T. H. Reus, and B. T. Lamont. (2009) "The effects of procedural and informational justice in the integrated of related acquisitions." Strategic Management Journal 30: 137-61.
[4] A. F. Buono, and J. L. Bowditch (2003). Human side of mergers and acquisitions managing collisions between people, cultures, and organizations. Washington, D.C: Beard Books.
[5] M. L. Marks (1982) "Merging human resources: A review of current research." Mergers and Acquisitions 17: 50-55.
[6] S. A. Paruchuri, A. Nerkar, and D. C. Hambrick. (2006) "Acquisition integration and productivity losses in the technical core: Disruption of inventors in acquired companies." Organization Science 17: 545-62.
[7] M. A. Griffen, A. Neal, and S. K. Parker (2007) "A new model of work role performance: Positive behavior in uncertain and interdependent contexts" Academy of Management Journal 50: 327-347.
[8] K. C. O'Shaughnessy and D. J. Flanagan. (1998) "Determinants of layoff announcements follows M&As: an empirical investigation." Strategic Management Journal 19: 989-99.
[9] P. Bordia, E. Hunt, N. Paulsen, D. Tourish, and N. DiFonzo. (2004) "Uncertainty during organizational change: Is it all about control." European Journal of Work and Organizational Psychology 13: 345-65.
[10] A. F. Buono and J. L. Bowditch (1989). The Human Side of Mergers and Acquisitions London: Jossey Bass.
[11] P. Bordia, E. Hobman, E. Jones, C. Gallois, and V. Callan. (2004) "Uncertainty during organizational change: Types, consequences, and management strategies." Journal of Business and Psychology 18: 507- 32.
[12] S. Ashford, (1988). "Individual strategies for coping with stress during organizational transitions." The Journal of Applied Behavioral Science. 24: 19-36.
[13] A. Nelson, C. L. Cooper, P. R. Jackson (1995) "Uncertainty amidst change: The impact of privatization on employee job satisfaction and well-being." Journal of Occupational and Organizational Psychology 68: 57-71.
[14] D. M. Schweiger, and A. S. DeNisi. (1991) "Communication with employees following a merger: A longitudinal field experiment." Academy of Management Journal 34: 110-35.
[15] J. R. Johnson, M. J. Bernhagen, V. Miller, and M. Allen (1996) "The role of communication in managing reductions in work force." Journal of Applied Communication Research 24: 139-164.
[16] D. T. Bastien (1987) "Common patterns of behavior and communication in corporate mergers and acquisitions." Human Resource Management 26: 17-33.
[17] J. M. Ivancevich, F. R. Power, and D. M. Schweiger. (1987) "Strategies for Managing Human Resources During Mergers and Acquisitions." Human Resource Planning 10: 19-35.
[18] M. Schraeder and D. R. Self. (2003) "Enhancing the success of mergers and acquisitions: an organizational culture perspective." Management Decision 41: 511-22.
[19] P. T. Whalen (2002) "Correcting common misconceptions about communicating during mergers and acquisitions." Communication World 19: 6-10.
[20] R. L. Heath (1994) Management of Corporate Communication: From Internal Contacts to External Affairs. Hillsdale, NJ: Lawrence Erlbaum & Associates.
[21] W. R. Fisher (1985) "The narrative paradigm: In the beginning." Journal of Communication 35: 74-89.
[22] R. C. Schank and R. Ableson (1977). Scripts, Plans, Goals, and Understanding. Laurence Earlbaum. Hillsdale, N. J.
[23] L. D. Browning (1992) "Lists and stories as organization communication." Communication Theory 2: 281-302.
[24] K. E. Weick and L. D. Browning. (1986) "Argument and narration in organizational communication." Journal of Management 12: 243-59.
[25] R. F. Baumeister and L. S. Newman. (1994) "How stories make sense of personal experiences: Motives that shape autobiographical narratives." Personality and Social Psychology Bulletin 20: 676-90.
[26] J. Bruner (1986). Actual Minds, Possible Worlds. Cambridge: Harvard University Press.
[27] N. DiFonzo and P. Bordia (1998) "A tale of two corporations: Managing uncertainty during organizational change." Human Resource Management 37: 295-303
[28] M. W. Kramer, D. S. Dougherty, and T. A. Pierce. (2004) "Managing uncertainty during a corporate acquisition." Human Communication Research 30: 71-101.
[29] B. J. Allen, P. K. Tompkins, and S. Busemeyer (1996) "Organizational Communication" In M. B. Salwen and D. W. Stacks (Eds) An Integrated Approach to Communication Theory and Research New York: Lawrence Erlbaum and Associates.
[30] M. Cornett-DeVito and P. G. Friedman (1995) Communication Processes and Merger Success. Management Communication Quarterly 9: 46-77.
[31] S. Onega and J. A. G. Landa. Narratology: An Introduction. London: Longman, 1995
[32] B. J. Elliot (2005) Using narrative in social research: qualitative and quantitative approaches London: Sage.
[33] D. Herman (2007) The Cambridge Companion to Narrative Cambridge: Cambridge University Press.
[34] K. Burke (1969) A Grammar of Motives. Berkeley: University of California Press
[35] R. Altman (2008) A Theory of Narrative. New York: Columbia University Press.
[36] G. Shaw, R. Browning, and P. Bromiley. (1998) "Strategic stories: How 3M is rewriting business planning." Harvard Business Review May- June: 41-50.
[37] C. Rhodes and A. D. Brown. (2005) "Narrative, organizations, and research." International Journal of Management Review 7: 167-88.
[38] R. Barthes (1988) Image, music, text. New York: Noonday Press.
[39] D. E. Polkinghorne (1988) Narrative knowing and the human sciences. Albany, NY: State University of New York Press.
[40] P. Ricoeur (1984). Time and narrative (Vol. 1). Illinois: University of Chicago Press.
[41] W. G. Lehnert (1981) "Plot units and narrative summarization" Cognitive Science 5: 293-331.
[42] E. M. Forster (1990) Aspects of the Novel Harmondsworth: Penguin.
[43] B. T. Pentland (1999) "Building process theory with narrative: From description to explanation." Academy of Management Review 24: 711- 24.
[44] M. Lounsbury and M. A. Glynn. (2001) "Cultural entrepreneurship: stories, legitimacy, and the acquisition of resources." Strategic Management Journal 22 (2001): 545-64.
[45] C. A. Bartel and R. Garud. (2009) "The role of narrative in sustaining organizational innovation." Organization Science 20: 107-17.
[46] D. Herman "Introduction." (2000) Narrative Theory and the Cognitive Sciences. Chicago: Chicago UP.
[47] F. J. Milliken (1987) "Three types of perceived uncertainty about the environment: State, effect, and response." Academy of Management Review 12 (1987): 133-43.
[48] N. DiFonzo, P. Bordia, and R. Rosnow. (1994) "Reigning in rumors." Organizational Dynamics 23: 47-62.
[49] C. R. Berger (1987). Communicating under uncertainty. In M. E. Roloff & G. R. Miller (Eds.), Interpersonal processes: New directions in communication research (p. 39-62). Newbury Park, C.A.: Sage.
[50] M. T. Matteson and J. M. Ivancevich. (1990) Merger and acquisition stress: Fear and uncertainty at mid-career. Haworth Press.
[51] R. S. Schuler (1980). Definition and conceptualization of stress in organizations.Organizational Behavior and Human Decision Processes, 25, 184 - 215.
[52] Z. Zaleski (1996) "Future Anxiety: Concept, measure, and preliminary research." Personality and Individual Differences 21 (1996): 165-74.
[53] D. Herman "Introduction." (2003) Narrative Theory and the Cognitive Sciences. Chicago: Chicago UP.
[54] R. C. Schank and R. Abelson (1995). "Knowledge and memory: The real story." In Wyer, R. S. (Ed.), Knowledge and memory: The real story. Advances in social cognition, 8, 1-85.
[55] J. H. Astrachan (2004) "Organizational Departures: The Impact of Separation Anxiety as Studied in a Mergers and Acquisitions Simulation." The Journal of Applied Behavioral Science 40: 91-110.
[56] J. R. Rentsch and B. Schneider. (1991) "Expectations for Postcombination Organizational Life: A Study of Responses to Merger and Acquisition Scenarios." Journal of Applied Social Psychology 21: 233-52.
[57] M. L Martens, J. Jennings, P. Jennings, and P. Devereaux. (2008). "Do the Stories They Tell Get Them the Money They Need? The Impact of Strategy Narratives on Resource Acquisition" Academy of Management Journal 50: 1107-1132.
[58] M. H. Brown and G. L. Kreps (1993). Narrative analysis and organizational development. in S.L. Herndon & G.L. Kreps (eds.), Qualitative research: Applications in organizational communication, (pp. 47-62). Cresskill, N.J.: Hampton Press, Inc.
[59] D. L. Miller and L. Karakowsky. (2005) "Gender Influences as an Impediment to Knowledge Sharing: When Men and Women Fail to Seek Peer Feedback." The Journal of Psychology: Interdisciplinary and Applied: 101-18.
[60] R. Larsson and S. Finkelstein. (1999) "Integrating strategic, organizational, and human resource perspectives on mergers and acquisitions: A case survey of synergy realization." Organization Science 10: 1-26.
[61] S. Cartwright and R. Schoenberg. (2006) "Thirty Years of Mergers and Acquisitions Research: Recent Advances and Future Opportunities." British Journal of Management 17: S1-S5.
[62] M. Bal (1997). Narratology. 2nd ed. Toronto: University of Toronto Press.
[63] P. T. Roundy. "Gaining Legitimacy by Telling Stories: The Power of Narratives in Legitimizing Mergers and Acquisitions" Submitted for publication.
[64] P. M. Leonardi, and M. H. Jackson (2004) "Technological determinism and discursive closure in organizational mergers" Journal of Organizational Change Management 17: 615-641
[65] K. Culp, K., and M. Pilat. (1998) "Converting qualitative feedback into quantifiable categories." Journal of Extension 36: 5.