Organizations have actively pursued mergers and acquisitions (M&As) over the past several decades but unfortunately almost half of these M&As have been unsuccessful, forcing researchers and practitioners alike to rethink the merger integration process that is so critical to M&A success. One vital aspect on the integration agenda is the integration of the two IT functions within the merging partners. In this paper, we offer a conceptual framework to understand why and when certain IT integration decisions are made during M&As. Three theoretical lenses – symbolism, power and strategic alignment are offered to interpret mergers in their pre-merger, merger and post-merger phases. It is contended that three factors govern much of the IT decision-making during merger integration: (a) the ‘aura ’ of the Wall Street – and the ‘promise ’ that the merging firms make to Wall Street analysts to achieve extraordinary cost-savings within a restrictive time frame; (b) the acquirer’s influence on the acquired firm, enforcing certain system choices on the acquired people; and (c) the goal to achieve business-IT strategic alignment. Influenced by Wall Street’s expectations and the acquirer’s persuasions, the new merged IT function may not be able to identify the best new arrangement of information systems infrastructure, people and processes, as prescribed by the strategic alignment lens, at least in the early phases of the merger process. We conclude the paper by illustrating some typical IT integration decisions that may be interpreted using these three lenses, and resulting practical implications. Through this paper, we hope to bring the M&A context to the IS researcher’s attention and provide a theoretical grounding to base future empirical research on.

Cultural differences are often used as explanations of organizational problems following mergers. This paper argues that this literature is to a large extent based on a realist epistemology where too little emphasis has been placed on the constructive processes. To partially bridge this gap, this study adopts a sensemaking approach to studying the (re)construction of cultural conceptions in the merger context. The study is based on extensive ethnographic material from eight cases of Finnish-Swedish mergers and acquisitions. The analysis of this material leads to a specification of three concurrent cultural sensemaking processes through which the top decision makers involved in the post-merger integration processes make sense of and enact cultural conceptions. First, this cultural sensemaking involves a search for rational understanding of cultural characteristics and differences. Second, cultural sensemaking also includes more or less suppressed emotional identification with either of the merging sides. Third, cultural sensemaking also involves purposeful manipulation of the cultural conceptions for more or less legitimate purposes. Based on this distinction, this study leads to specific propositions concerning how cultural conceptions are formed in post-merger organizations.

Abstract: We study the potential contribution of governance theories to analysing the post-merger integration of the IS. We provide a clarifying overview of neoclassical theory of the firm, the nexus of contracts perspective, agency theory, early incomplete contracting literature, transaction cost economics and property rights theory, and discuss their contributions to the existence, boundaries and internal organization of M&A, as well as their contribution to the analysis of post-merger integration of the IS. The key findings of this paper are firstly that the governance theories of the firm discuss amply a number of issues that are of essential importance in the analysis of M&A as well as the post-merger IS integration, and secondly that there are clear shortcomings in the way they try to define, explain and help in the governance of M&A. What this means is that the governance theories of the firm can and should be used in discussing M&A and the IS integration, and they have vast potential for the development of an integrative theory in this field. The study shows that the key contributions of the various governance theories of firm have direct applications to understanding and managing the post-merger information systems integration. Keywords: Mergers, M&A, IS integration, governance theories of the firm. IRIS27 Alaranta-Parvinen: Contribution of Governance Theories to the Analysis of M&A and PMI of the IS 1

Most research of post-acquisition integration examines integration of individual business units. The research pays less attention to corporate level integration processes, by which we mean the standardization of integration routines and synchronization of integration activities across a firm's business units. We argue that corporate level acquisition activities and post-acquisition integration processes strongly influence long term corporate performance, particularly as a firm which comprises interdependent business units becomes geographically diffuse. Acquisitions tend to increase system diversity and goal diversity across business units. Some goal diversity is beneficial, but excessive goal diversity and the existence of system diversity can reduce long run corporate performance by requiring greater managerial effort and increasing the opportunity cost of managerial efforts. The negative effects become stronger as a firm becomes geographically diffuse or if business units are interdependent. Firms that employ active corporate level integration processes – particularly firms that acquire frequently and have interdependent business units – can enhance the benefits and eliminate some of the problems of diversity. Many studies have examined post-acquisition integration. Questions include how acquiring firms

As deals are becoming more complex, and as technology, and the people supporting it, are becoming key drivers of merger and acquisition processes, planning of information and communication technologies in early stages of the integration process is vital to the realization of benefits of an Merger & Acquisition process. This statement is substantiated through review of literature from academics as well as practitioners, and case exemplifications of the financial service organization, the Nordea Group. Keywords: ICT Integration, Mergers & Acquisitions, Nordea Group. 1.

In post-merger integration, both human integration and IS integration play a crucial role. In the heart of both of these, lies the integration of the IS personnel. In this paper, we review the literature relevant to IS staff integration in order to explore the opportunities and challenges the IS personnel faces during post-merger integration. The challenges and opportunities the IS staff faces during postmerger integration stem from (1) the merger situation, (2) the IS personnel as an occupational group, and (3) the managerial interventions. A conceptual framework integrating these elements and studying their interdependencies is formed. Post-merger integration is a gradual and interactive process in which the individuals from two or more organisations learn to co-operate in the transfer of strategic capabilities. The post-merger integration takes place at several levels. Shrivastava (1986) calls these procedural, physical, and managerial/sociocultural, whereas Birkinshaw et al. (2000) use the terms task integration and human

The implications of several strands of the spatial geography literature suggest that firms incur substantial costs when they implement geographically distant acquisitions, where implementation costs arise both from searching for potential targets and from undertaking post-acquisition integration. In turn, the prescriptive literature on acquisitions strategy often suggests that firms should seek geographically proximate targets, especially while they gain acquisition experience, in order to limit implementation costs that have the potential to crowd out gains from acquisitions. To date, however, we lack systematic research examining whether expected implementation costs lead acquirers to prefer nearby targets and, if so, how acquisition experience or other factors may reinforce or reduce any such tendency. Indeed, there is no assurance that desirable targets will be located near acquirers, while anecdotal evidence suggests that some firms, at least, undertake distant acquisitions, even early in their acquisition experience. This study examines how the distance between acquiring and target firms influences target selection, exploring conditions under which acquirers exhibit a greater preference for geographically proximate targets and when they seek more distant targets. The study examines 2,070 domestic U.S. acquisitions from 1980 to 2004 by 767 US chemical manufacturing firms founded after 1979. The core conclusion of the study is that distance has a strong and persistent effect on target selection

les inconvénients d’une approche rationaliste,

les inconvénients d’une approche rationaliste,

Abstract 1 Mergers and acquisitions are not only economic decisions but can also be understood as social processes. Acquisition researchers often have a financial argument to justify their research, no matter their research focus. Social processes are mostly studied to find out why the acquisition failed and to find a formula to avoid future failures. In the literature one will often find representations of acquiring managers rather than the whole organisation. One could therefore describe most acquisition research as single-voiced rather than multi-voiced. Another common focus in the literature is that of integration. Acquisition researchers often describe the acquisition process as a unifying process. They prescribe that managers should manage the integration process so that the merging companies should become one with a consensus culture. The focus of this review is to identify a gap, the lack of certain social processes and of multi-voiced representation in that acquisition literature; that is, statements of ambiguities and ambiguous situations. 1 This review is based on chapter two and three in Risberg (1999) Ambiguities Thereafter – An interpretive approach to