Advances in Mergers and Acquisitions

Sydney Finkelstein, Cary L. Cooper, Sydney Finkelstein, Cary L. Cooper

• Editore: Emerald Publishing Limited
• Anno: 2018
• ISBN:
  9781787561373
• Argomento: Commerce
• Categoria: Fusions & acquisitions

Advances in Mergers and Acquisitions stands out from the competition due to its focus on three key characteristics: studies from scholars in different countries, with different research questions, relying on different theoretical perspectives. Such a broad and inclusive approach to mergers and acquisitions is not easily replicated in academic journals, with much narrower mandates and metrics. The chapters published in this volume provide cutting edge ideas by leading scholars, and help to inform mergers and acquisitions research around the world.

CHAPTER 1

REFLECTING ON THE USE OF ETHNOGRAPHIC METHODS IN THE STUDY OF MERGERS

Satu Teerikangas and Noelia-Sarah Reynolds

ABSTRACT

In this paper, we responded to recent calls for the use of a greater variety of qualitative methods in the study of inter-organizational encounters, including mergers and acquisitions (M&As). The paper provided a reflection on the authors’ experiences in carrying out two studies of merger processes in the UK and Finland, one ethnographic and one combing also auto-­ethnographic methods. Contrasts between the former case of an “outsider” entering into an ethnographic study and the latter case of an auto-ethnographer with a dual role as a researcher and integration team member were highlighted. The paper offered three contributions to extant research. First, the paper extended the methodological debate in the study of M&As to the level of individual methods. Second, the paper identified the finding types that emerge when using ethnographic methods in the study of mergers. Third, the paper discussed the unique challenges posed when conducting ethnographic work investigating organizational combinations in times of mergers as opposed to ethnography in traditional, single organizational settings.

Keywords: Merger; mergers and acquisitions; post-merger integration; qualitative research; ethnography; auto-ethnography

INTRODUCTION

Mergers and acquisitions (M&As) have become established as a primary means of corporate renewal and international expansion (Faulkner, Teerikangas & Joseph, 2012; Hitt et al., 2012). Academic interest in M&A has shifted from an early focus on financial and strategic perspectives (Chatterjee, 1986) to encompass human, cultural, and process-based lenses (for reviews, see Cartwright, Teerikangas, Rouzies, & Evered, 2012; Larsson & Finkelstein, 1999; Schweiger & Goulet, 2000; Stahl & Voigt, 2008), in both domestic and international contexts (Reynolds & Teerikangas, 2015; Shimizu et al., 2004). Despite their increasing number and several decades of academic and consultancy-based research interest, the performance impact of M&A on the acquiring firm retains a negative slant (King et al., 2004; Papadakis & Thanos, 2010; Zollo & Meier, 2008).

In response to this state of affairs, the way in which M&As are studied in academic research has been raised (Haleblian et al., 2009). Based on their review of methods used in the study of M&A, Meglio & Risberg (2010) call for more breadth in the methodological approaches used in the study of M&A, critiquing particularly the study of M&A performance (Meglio & Risberg, 2011; Véry, 2011). A recent special issue was dedicated to qualitative innovations in the study of inter-organizational encounters with a particular focus on M&As (Cartwright et al., 2012). Cartwright et al.’s (2012) review of the methods used in the study of M&A points to a strong quantitative bias, totalling 80.7% of the published work in top academic journals. Where qualitative methods have been adopted, the focus is on single or multiple case studies (29.5% and 52.5% respectively of all qualitative studies). Studies undertaking an ethnographic approach remain in a minority, representing 3.2% of all published qualitative studies in top journals. This means that a majority of M&A research undertakes an “external” lens to the studied phenomenon, exploring M&As through the lenses of interviewees or workshop participants. This led Cartwright et al. (2012) and Meglio & Risberg (2010) to call for more “insider” perspectives to M&A by undertaking ethnographic research. These calls parallel the rise of the ethnographic approach in organizational studies in the recent years (Watson, 2012; Yanow, 2012).

Over the past decade, some ethnographic studies on mergers or acquisitions have been published in leading academic outlets (Brown & Humphreys, 2003; Piekkari, Vaara, Tienari, & Santti, 2005; Yu, Engleman, & Van de Ven, 2005; Ailon, 2007), whereas other papers feature ethnographic elements in the data gathering process (e.g., Buono, Bowditch, & Lewis, 1985; Drori, Wrzesniewski, & Ellis, 2011; Vaara, 2003). These papers have paved the way for more in-depth appreciations of M&A integration (Brown & Humphreys, 2003), language (Piekkari et al., 2005), managerial attention (Yu et al., 2005), or identification processes (Ailon, 2007). Despite these advances in the use of ethnographic methods in the study of M&A, little interest is paid to the experience of conducting ethnographic research in M&A contexts. M&As represent forms of radical change (Huy, 1999), combining two if not more organizations together, often in an international setting (Reynolds & Teerikangas, 2015). As such, they represent research contexts that are characterized by more complexity and change than the study of a single organization. Yet the majority of ethnographic studies in management research study single organizations (e.g., Johri, 2015; Winkler 2013), at best set amid a radical within-organization change (Gioia & Chittipeddi, 1991). Nevertheless, the advice offered in ethnographic method handbooks is based on such studies. This leads one to ask – does this advice also hold for M&As? Does ethnographic work in M&A differ from other contexts? Where should M&A scholars seeking to widen their methodological span toward ethnographic methods turn to for advice?

In this paper, we start exploring this knowledge gap. Instead of an empirical paper, we offer a reflection on the experience of ethnography in the study of M&A. This means that the paper has a personal and subjective take. We focus our reflection on mergers. The research question guiding the paper is: “What can be learnt from the experience of conducting ethnographic research on mergers?” Our reflections are based on the two authors’ independent research projects on large-scale mergers. The first project used ethnographic methods in the study of a UK-based merger, while the second project combined ethnographic and auto-ethnographic approaches to the study of a Nordic university merger. Following these research projects, both researchers have published empirical findings based on the observational and reflective data gathered. The authors embarked on a reflection on this experience, as they sensed that despite calls for ethnographic research in the study of M&As, little is known about what this choice actually entails. The combination of ethnographic and auto-ethnographic methods is, to our knowledge, unique in the study of M&As.

The paper offers three contributions to extant research. By shedding light on the practice of ethnography in the study of M&As, the paper extends the methodological debate in the study of M&A from a generic review level (Cartwright et al., 2012; Meglio & Risberg, 2010) to the level of individual methods. Such inquiry is emerging in the study of M&As, as visible in recent contributions in the Routledge Companion to Mergers and Acquisitions (Risberg, King, & Meglio, 2015), with regard to the use of mixed methods (Kroon & Rouzies, 2015), social network analysis (Mirc, 2015), event studies (Harrison & Schijven, 2015), institutional ethnography (Lund & Tienari, 2015), and longitudinal methods in the study of M&As (Risberg et al., 2015). Extending this methodological inquiry to the use of ethnographic methods in the study of M&A is the main contribution of the paper. The paper’s second contribution is to identify the findings that emerge when using ethnographic methods. The third contribution is to offer the example of M&As to the study of ethnographic methods. We discuss the unique challenges posed when conducting ethnographic work investigating M&A as opposed to ethnography in traditional, single organizational settings.

The paper is structured as follows. We start with an introduction to ethnographic methods. Thereafter, we detail the two research settings that form the empirical basis for the subsequent methodological reflection. The third section focuses on reflections based on the use of ethnographic methods in the study of M&As. Section four discusses the paper’s contributions and concludes with suggestions for further work.

AN OVERVIEW OF EXTANT RESEARCH

Ethnographic work has its origins within 19th century anthropology and cultural studies (Geertz, 1973). Within this field, ethnography is a term used to describe the study of a society’s culture, in particular those cultures different to one’s native culture (van Maanen, 2008). Ethnography involves observing, participating and reflecting on the society that is being studied by being immersed within it. As such, ethnography enables the researcher to understand practices and processes in depth that would have not been understood through other methods of study (Hammersley & Atkinson, 2003; van Maanen, 2011). In the study of organizations, this enables a rich understanding of organizational processes and a focus on explaining why something happens or how something is done (Katz, 1997, 2002). Ethnography enables the researcher to link spoken words of those being observed to the cultural and organizational settings and contexts in which they occur (Watson, 2012). Since the main aim of ethnography is to understand the “cultural whole” (Watson, 2012:17), that is, the place in which we do our fieldwork, an ethnographer gains a deep understanding of both the research context and the problem under study (Hirsch & Gellner, 2001). As such, connections between concepts and actors might only be seen as a result of the rich interaction that the ethnographer enjoys when engaging in ethnographic work (Yanow, 2012). As a result, within the field of organizational studies, ethnographic research has increased in popularity in recent years (Kenny, 2008; Vorhoelter, 2012).

In parallel with these developments, scholars have reflected on the experience of carrying out ethnographic research itself (van Maanen, 2011). Fetterman (2010) points out that while ethnography is a mundane activity involving extensive note taking and martialling a large, sometimes overwhelming, volume of data (cf. Eisenhardt, 1989), it is also characterized by exciting, spontaneous insights on the part of the researcher. Ethnographic research is necessarily subjective (Hammersley & Atkinson, 2003) and involves the researcher trying to understand the point of view of the people being studied. However, Thomas (1993) cautions that in “going native”, the researcher risks compromising scientific enquiry by accepting the norms of the culture being studied. At the same time, there is significant scope for the researcher to be affected, perhaps emotionally, by what they observe, and this could impact on the write-up of their case (van Maanen, 2011). In the ethnographer’s efforts to arrive at a detailed knowledge of both the research phenomena and the context in which it is being researched they build knowledge and familiarity with, for example, organizational actors and processes and cultural and institutional norms (Hirsch and Gellner, 2001) and perhaps acquaintances and trusting relationships with individual actors (van Maanen, 2011).

Research into M&A has traditionally been quantitative, with a focus on measurable outcomes and variables, often linking these to performance (King et al., 2004; Lunnan & Haugland, 2008; Nielsen, 2007; Reus & Rottig, 2009). These methods have led to an appreciation of the financial, strategic, and economic aspects of this activity at the level of individual transactions, their effects on participating firms or the society overall (Faulkner et al., 2012). The 1980s saw a qualitative turn in the study of M&As, as the locus of attention shifted to include cultural, managerial, and human dynamics (Buono et al., 1985; Graebner, 2004; Olie, 1994; Vaara, 2003). Within this stream of research, scholars have focused on the human side of inter-firm encounters and especially on issues such as stress (Ager, 2011) and emotions (Kiefer, 2002; Kusstatscher & Cooper, 2005). It is well known that radical change, such as merging or acquiring, evoke strong emotions in managers and employees (Kiefer, 2002).

Despite these advances, recent reviews (Cartwright et al., 2012; Meglio & Risberg, 2010) call for more innovative approaches to the study of inter-firm encounters. In particular, the scant use of ethnographic methods is lamented (Cartwright et al., 2012). It is argued that the field can be further explored using observational and ethnographic methods, as these met...