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

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.

Authors:

• Philip T. Roundy

Keywords:

• Narrative Theory
• Mergers and Acquisitions
• Employee Uncertainty.

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.