Enabling control in post-acquisition integration

Thesis event information

Date and time of the thesis defence

Place of the thesis defence

Linnanmaa campus, Oulu Business School, lecture hall TA105

Topic of the dissertation

Enabling control in post-acquisition integration

Doctoral candidate

MSc (Econ. & Bus. Adm.) Marjo Väisänen

Faculty and unit

University of Oulu Graduate School, Oulu Business School, Economics, Accounting and Finance unit

Subject of study

Accounting

Opponent

Professor Josep Bisbe, ESADE Business School

Custos

Professor Janne Järvinen, University of Oulu

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Successful mergers and acquisitions integrate people not only systems

Successful mergers and acquisitions (M&A) require organizations to implement effective management control systems across the organization and its subsidiaries. In practice, organizations often resort to a top-down integration of these control systems due to high pressure to standardize the systems across the global firm. These actions are likely to induce negative responses and fuel mistrust among the new organizational members in acquired subsidiaries.

In her doctoral dissertation MSc Marjo Väisänen has studied management control integrations in the context of M&A. Her study enhances our understanding on the use and effects of management control integrations in mergers and acquisitions particularly from employee’s perspective.

According to Väisänen: “Often it seems that international organizations acquire technologies and innovations from Finland but forget that it is the employees who came up with the innovations in the first place. My research suggests starting the integrations with humans by building trust and openly sharing information, being very transparent.”

The research shows how management control systems can be perceived as enabling instead of coercive by the organizational members during post-acquisition integration.

“My results show that when the acquirer’s managers put effort into trust-building in the early phases of the integration process, it really pays off in getting the acquired workforce on board.”

The study suggests focusing more on how to integrate people, not only systems, by creating trustful interpersonal relationships between key persons of the parties of the M&A. When those relationships have been formed between people, it is easier for the personnel to ask for help and assistance.

“Acquired personnel will learn to appreciate benefits of tight processes, such as improvements in efficiency, quality, accuracy and predictability.”

The results show that the perceptions of employees can change from “coercive” to “enabling” during the course of integration. Trust and good interpersonal relationships form a good base for organizational members of merging organizations to work together towards mutual goals. It further shows how enabling control systems can support socialization of new employees during post-acquisition integration. While harmonizing the control systems the values and the social norms of the headquarters are transferred to employees.

By rationalizing and opening up the reasons behind for changes to the personnel, management of the organization will gain people’s trust. This, in turn helps organization be successful also in the future, including after M&A.
Last updated: 7.6.2022