Managing failure in the merger process: evidence from a case study

Abstract

Purpose

Despite their high number, most mergers end in failure. Academic studies of how these failures occur have remained rare, first, because of the difficulty of accessing the cases, and second, because of the difficulty of obtaining – for the purposes of qualitative analysis – objective and freely shared perceptions from the stakeholders, who tend to avoid speaking about failure. This is unfortunate, however, as failure can serve as a stimulus for organizational learning and readaptation for the future.

Design/methodology/approach

The author investigated how an organization managed failure during the post-merger integration stage. The author described the merger of two listed French companies using longitudinal data.

Findings

This in-depth case study provides new insights into failure during post-merger integration. The paper highlights the complexity of post-merger integration processes and the failures that the integration stakeholders had to address. The author underlined how they recognized failures and put into place solutions. They particularly highlighted two failures and how they were managed by the managers who acted as knowledge brokers within the new organization and by stakeholders who deconstructed the organization to ensure its future.

Research limitations/implications

The limitations are those concerning a single case study.

Practical implications

The paper identified trigger events in the merger process that prompted stakeholders to step in and manage and resolve failures during the integration period. Such triggers can be considered as steps for managers and stakeholders to solve organizational issues in the merger process. The paper highlighted the complexity of post-merger integration processes and the failures faced by integration stakeholders. The analysis thus contributes to an inclusive and integrative view of the challenges in this process.

Social implications

Despite their high number, merger and acquisition failures remain surprisingly high. This paper explored how stakeholders deal with failures by identifying which solutions are best adapted to their organization.

Originality/value

The case provides a vivid illustration of failure management during a merger process. Theoretical concepts and empirical findings from the literature are combined to present a single consistent picture.

Citation

Thelisson, A.-S. (2021), "Managing failure in the merger process: evidence from a case study", Journal of Business Strategy, Vol. 42 No. 1, pp. 33-39. https://doi.org/10.1108/JBS-10-2019-0187