The human side of mergers and acquisitions: a look at the evidence

Abstract

This paper surveys the strategy literature on human resources’ role in the process of mergers and acquisitions. Although many studies acknowledge the important role of the “human” side in these major events in the life of a firm, we do not have up to now a comprehensive and encompassing survey of this literature. At the micro level we find consistent results across studies, mainly supporting the idea that M&A are disruptive events in the lives of the employees involved, they lead to increased stress and uncertainty which leads to dysfunctional outcomes. However the evidence is not so clear on whether these observed psychological and behavioral reactions have an impact on performance (at the individual or firm level). From a macro level perspective the hypothesis of a fit between the merging firms seems to have some empirical support, as it is found to have a positive impact on performance across the studies surveyed. The dynamic effects of this fit hypothesis, though, are not well understood yet. The impact and importance of social and formal controls and cultural fit are issues still begging for an explanation.