Mergers and acquisitions are a product of change. The companies involved join together to form an alliance to create a more competitive position. During the process, many employees in the acquired organization will feel uncertain of their futures. This uncertainty can cause " lowered morale, which leads to increased disloyalty, increased turnover, higher absenteeism, increased stealing, and sabotage." (Bruckman) The purpose of this paper is to identify issues that could affect an organization in the event of a merger/acquisition and strategies for dealing with these issues. This paper focuses on morale and the effects of anxiety, sabotage, and the use of internal and/or external management consultant. Finally, strategies to mitigate failing morale are presented.
Managers face many people-issues when a merger is announced. "The majority of all merger/acquisitions fail, according to studies by Harvard and the AMA. They fail due to culture and people issues, unless the price was excessive." (Bruckman 4) An organization can dramatically increase their chances of a successful merger or acquisition by paying careful attention to the people-issues and by carefully reviewing some of the lessons learned from some of history's most notable business mergers. During a merger, people can feel vulnerable and helpless. Emotions such as fear, uncertainty, euphoria, anxiety, stress and anger are quite common. These emotions can lead to loss of focus, rumors, conflicts, suffering job performance, increase in accidents, choosing of sides, isolation, absenteeism, focus on self, etc.
During a merger, anxiety is usually one of the byproducts of uncertainty. People are concerned with change, change in the organizational structure, established communication links, future direction, policies and procedures, along with anxiety about the stability of their jobs, in the form of separation anxiety.