Dealing with mergers and acquisitions (M&A) means dealing with change, uncertainty, and in many cases reasonable fear of job loss. These are circumstances that ideally bring forth competition, better performance, more efficiency on personal as well as institutional levels. However, what they always bring forth are emotions.
Emotions, often associated with our `human side’, our ‘nature’, have regularly been overlooked by strategists and strategy scholars alike. This is at least somewhat puzzling, considering that the roots of modern strategy scholarship and practice are often traced back to the works of Niccoló Machiavelli or Carl von Clausewitz, authors who put emotion center stage in their writing.
One of the reasons why emotions are often overlooked by strategy scholars and practitioners may perhaps be related to the fact that strategy scholarship and practice are still steeped in some of the premises that these disciplines have inherited from pre-1950s economics; for instance, that it is ok to perceive humans as rational decision makers, that we usually think before we act, etc.—notions that intuitively make sense and, conveniently, allow formulating models of reality that are characterized by a certain degree of consistency, generalizability and simplicity (Arkes & Hammond, 1986).
However, there is a problem with simplicity. And the identification of this problem can be traced back to Aristotle who said that “it is simplicity that makes the uneducated more effective than the educated when addressing popular audiences” (Aristotle, n.d.), meaning that most of us are likely to believe what is easier to believe—a notion that captures what scientists later termed `availability heuristic´, which explains our reluctance to admit complexity (Kahneman, 2011).
It is fair to say that we have come a long way since Aristotle, and that modern science in its many disciplines now offers pictures of the world that go well beyond the obvious, against our intuition, our natural understanding of things and against our reluctance to admit complexity. What is noteworthy here is that the journey was effortful. Effort is the main feature that distinguishes deliberation from intuition (Kahneman, 2011) and allows us to understand the world beyond the obvious. Some ideas just don’t come to mind effortlessly like intuitions but instead have to be worked out deliberately.
Thanks to the efforts of neurologists and psychologists, we now have a fairly good understanding of the human mind. We know the many ways we humans are not rational decision makers. We know that many of our actions are not based on any deliberate thinking. Moreover, we know that virtually all our actions are infused by emotion.
Antonio Damasio, a renowned neurologist, pointedly states that we should perceive ourselves not necessarily as thinking machines, but as feeling machines that think (Damasio, 2010). Unpopular as this notion may be, but we are emotional beings first. Acknowledging the role of emotions, our ‘human side’ is further reflected in the realization that human beings are best not perceived as rational decision makers (Simon, 1992) or as someone who thinks before taking most actions (Klein, 1998). Instead, we now know that we are best perceived as “satisficers” (Simon, 1992), who make sense of our decisions in retrospect (Klein, 1998; Weick, Sutcliffe & Obstfeld, 2005).
Various aspects of this notion are now being embraced by M&A researchers. One is reflected in the realization that the integration of organizational tasks and the integration of human beings are two entirely different things (Birkinshaw, Bresman & Hakanson, 2000), that these things do not necessarily need to occur at the same time (Birkinshaw et al., 2000; Gates & Very, 2003), to the same extent (Birkinshaw et al., 2000; Larsson & Finkelstein, 1999; Marks & Mirvis, 1998; Pablo, 1994; Weber, Tarba & Reichel, 2009, 2011) or with the same speed (Bauer, Schriber, Degischer & King, 2018; Garcia-Canal, Rialp Criado & Rialp Criado, 2013; Uzelac, Bauer, Matzler & Waschak, 2016).
We also know that our decision making is influenced by myriad of factors, ranging from the nature of the task at hand to subliminal influences like the music playing in the background (Bargh, 2002). In the context of M&A this translates, for example, into the realization that seniority and the relative power position within an organization influence our decision-making style (Matzler, Uzelac & Bauer, 2014); or that the effects of human and task integration speed are moderated by the decision-making style of those in charge of integration (Uzelac et al., 2016).
Insights like these are evidence that M&A research has recognized the importance of human aspects (Cartwright, Tytherleigh & Robertson, 2007; Swart & Kinnie, 2003; Weber & Fried, 2011) and the role that emotions play in human decision making. However, there is much more complexity to be revealed if we are to understand the conundrum that M&A performance still posits.
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