Personnel Resistance in Public Professional Service Mergers: The Merging of Two National Audit Organizations

University dissertation from Lund Institute of Economic Research, Lund Business Press

Abstract: The human side of mergers and acquisitions (M&A) – with focus particularly on resistance - has puzzled scholars for decades. Still, there is little discussion as regards to how the concept should be defined or understood. Often expressions of resistance, rather than its actual content, are described. What do personnel actually oppose? In this dissertation, the content, process, and context of resistance are explored in a broad and integrative approach. A personnel perspective is adopted. Observations from a longitudinal real-time case study on the merger of two national audit institutions in Sweden are reproduced. Analysis indicates that more attention needs to be directed to the moral side of M&A, in order to understand resistance. In the case study, management took the merger as an opportunity to increase organizational control, thereby breaking a psychological contract with personnel and turning to utilitarian values. Opposition to this united professionals in the two organizations, and resistance rapidly shifted from a horizontal to a vertical dimension. Such a displaced balance between trust and control may be a common reason for resistance in M&A. An evaluation of the competence and morality of the opposite party occurs, in order to establish a level of trust. With distrust comes a competition for control, since parties in this context may experience a moral obligation to optimize the new organization. A new definition of the resistance concept is suggested.

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