News

In corporate acquisitions, managers construct an impression of control

The early integration phase following a corporate acquisition requires tolerance of uncertainty.

Business managers are in a conflicting situation, as they are expected to manage decisions and situations they are facing during the early integration with confidence. However, the various different versions of the early integration, which managers construct when interviewed, reveal the challenges and uncertainties of the transition phase, Laura Erkkilä, M.Sc. (Econ.), states in her doctoral dissertation to be examined at Aalto University School of Business on 11 December.

‘Traditionally the acquiring company is expected, inter alia, to take control of the acquired company by creating a control system in accordance with the level of integration for running the acquired company,’ Erkkilä points out.  

Previous studies have often been based on the understanding of the integration from the perspective of the acquiring party, highlighting a rational and manageable integration process.  

Erkkilä's doctoral dissertation provides new information on how corporate leaders and business managers in both the acquiring company and the acquired one experience the early integration and cope with the pressures created by it. Even though all managers create an impression of control of the situation in their talk, the analysis of how they speak exposes ‘in-control’ elements as well as opposite elements, which disrupt the impression of control. Using these elements managers reveal that situations are at the same time also beyond their control.

‘By building up an impression of control, managers fundamentally fulfil a social obligation for control. This is based on a strong leadership culture that emphasises the manager's responsibility to be credible, solve problems and be in control,’ says Erkkilä.

The managers of the acquired company also participate in creating the impression of control. They do it by highlighting their own personal strengths and experience as well as those of the whole former organization.

Control-based talk may distance people

The study opens new perspectives on the development of integration in such a manner that the managers of the acquired company participate in taking control of the early integration.

‘Successful outcomes can be promoted by making integration and being in control of it a common goal and responsibility. A common understanding of the priorities of the new organization during the initial phase of integration is also necessary. The current conception of good integration is no longer based on strong control only, but on mutual commitment and participation,’ Erkkilä points out.

Erkkilä notes that the corporate management's overemphasis on talk about the manageability of the initial integration may contradict with the experiences of the acquired company or even the entire personnel. She, therefore, calls for open communication about the challenges of early integration to avoid escalation of diverging views into resistance.

Further information:
Laura Erkkilä
tel. +358 40 778 0451
[email protected]

  • Published:
  • Updated:
Share
URL copied!

Related news

Research & Art Published:

EIT Climate-KIC supported Ioncell directly offers an innovation that regenerates fibres, while enabling them to be recyclable and biodegradable.

Ioncell, conceptualised out of Aalto University, provides a closed-loop technology to regenerate cellulosic fibres without using harmful chemicals.
media lab demo day
Research & Art Published:

Xmas Demo Day 2019 in photos

Collection of photos from the latest Demo Day organized on the 5th of December 2019.
arkkitehdit Philip Tidwell, Kristo Vesikansa ja Laura Berger seisovat katsoen kameraan
Appointments, Cooperation, Research & Art Published:

Finland’s exhibition in the Biennale Architettura 2020 honors the Finnish prefabricated wooden houses of the WWII era

The exhibition will be conceived and curated by three researchers and teachers at Aalto University.
Quantum Garden
Research & Art Published:

Making understanding quantum computers easier

IBM collaborates with Professor Sabrina Maniscalco and her group to develop new transformative tools for teaching and outreach about quantum technologies