Trust in the Climate of Mergers and Acquisitions: A Case Study

Abstract

In many businesses, growth, and dominance are terms that define some of their strategies and plans for the company’s future. Mergers and acquisitions are processes that help to achieve those strategic goals. Mergers and acquisitions can happen for an array of reasons from both the seller’s side and the buyer’s side. In the basket of offerings on the table are infrastructure, technology, and resources, including the employees. Oftentimes, the human side of business transactions is neglected and not meticulously planned for concerning integration. This neglect is noticeable especially when communication within the selling organization is not filtered to the employees. Employee engagement is crucial to routinely service the wheels of trust within the company and its leaders. Many merger and acquisition transactions rely on maintaining high levels of employee engagement and retention throughout the transaction, from the deal announcement, implementation preparation and execution. Trust in the climate of mergers and acquisitions can attribute to the success of these transactions. Lack thereof can also frustrate the latter stages of M&A, where the integration of work culture begins. The research seeks to find the differences and/or similarities in the role of trust at different levels of the employee organogram. The study's goal is to learn more about people's perspectives, experiences, and the overall impact of trust on the behavior and performance of employers and employees in the workplace. Surviving employees of the chosen company are interviewed and requested to recall how trust played a factor during the acquisition period. Data collection was using recorded individual interviews. The key findings from this study revealed that trust has a big role in the process of M&A. Trust in the outgoing selling company and its leaders is as important as trust in the incoming buying company. Trust is not earned instantaneously; it must be worked for. However, it may be quickly and easily broken.