The art of building trust via e-communication channels: Post-acquisition integration as a special context

This study discusses the importance of establishing trust in post-acquisition integration context and how the use of e-channels facilitates or inhibits this process. The objective of this study is to analyze how the use of electronic communication channels influences the post-acquisition integration process in terms of trust establishment and overall integration efficiency, developing a framework as a result. Three sub-objectives are introduced: to find out the building blocks of trust in M&A’s, to analyse how the use of e-channels influence the process of trust establishment in post-acquisition integration context, and to define the consequences trust and use of e-channels have for the process. The theoretical background of the study includes literature and theories relating to trust establishment in post-acquisition integration context and how the use of e-channels influences the process of trust development on a general level. The empirical research is conducted as a single case study, based on key informant interviews. The interview data was collected between October 2015 and January 2016. Altogether nine interviews were realised; six with representatives from the acquiring firm and three with target firm members. Thematic analysis was selected as the main method for analysing and processing the qualitative data. This study finds that trust has an essential role in post-acquisition integration context, facilitating the integration process in various different ways. Hence, identifying the different building blocks of trust is important in order for members of the organisations to be better able establish and maintain trust. In today’s international business, the role of electronic communication channels has also increased in importance significantly and it was confirmed that these pose both challenges and possibilities for the development of interpersonal trust. One of the most important underlying factors influencing the trust levels via e-communication channels is the level of user’s comfort in using the different e-channels. Without sufficient and meaningful training, the communication conducted via these channels in inhibited in a number of ways. Hence, understanding the defining characteristics of e-communication together with the risks and opportunities related to the use of these can have far-reaching consequences for the post-acquisition integration process as a whole. The framework based on the findings and existing theory introduces the most central factors influencing the trust establishment together with the positive and negative consequences these have for the integration process. Moreover, organizational level consistency and the existence of shared guidelines on appropriate selection of communication channels according to the nature of the task at hand are seen as important

Uncertainty Management in Acquisitions: What Scenario Analysis Could Offer

This study answers to How scenario analysis could help acquiring companies to reduce uncertainty in the acquisition process? It is due to the mismatch between academic world’s caveat emptor and business world’s eagerness to pursue acquisitions that motivated this study. Acquisitions are as popular as ever, thus, managing the uncertainty surrounding these transactions is relevant. This study creates a generic theoretical model with a strategy-level scope. Thus, the study does not discuss nor does it seek answers to operational issues related in both fields. This study is explorative and constructivist in nature. It discusses briefly the concepts and relatedness of risk and uncertainty and establishes a hierarchy between these two: Risks being a “sub-section” of uncertainty, although not with clear boundaries. Acquisition theory follows the process view that understands acquisitions as a process with various levels – some strategic, some operational. Scenario analysis is presented as tool for management to enrich their strategic discussion and understand their future options. The empirical data collection is done through interviewing. The results are reflected on literature on strategic management, scenario literature, and on a consultancy’s report picturing firm’s strategies in accordance with their acquisition processes. The study has an abductive approach as it tries to combine multiple views and generates discussion between literature review, interviews, the report, and second round of literature. The model suggests three propositions: First, at the strategic decision making level, when the decision whether or not to pursue an acquisition growth strategy has been made, it provides firms new data and enriches the strategic discussion. Second, when the acquisition strategy has been created, it can be applied as a tool to measure possible acquisition targets against the backdrop of the first set of scenarios. Third, due to the scenario analysis’ requirement to include people with various backgrounds and from multiple levels of the corporate hierarchy, it could help managers to avoid biases stemming from hubris.