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  • Writer's pictureRaid Attir

4 - The Merger Syndrome... How To Cure It?

Updated: Oct 26, 2018

As we are seeing more and more Mergers & Acquisitions in today's financial world, we have to inspect how such transactions affect employees. While a Merger & Acquisition transaction might be sound from a financial stand point, it is not necessarily the best course of action when you factor-in the human aspect.

The Merger Syndrome, a term that was first coined by Marvis & Marks in 1985 in an academic documentation, puts an emphasize on the human factor and employees psychology during a Merger and Acquisition transaction.

What Is The Merger Syndrome?

Merger Syndrome describes the stress, anxiety, and crisis management employees demonstrate during a Merger & Acquisition transaction.

What Are The Symptoms Of The Merger Syndrome?

There are several symptoms of The Merger Syndrome, but the most observed ones are:

  • Loss-of-identity due to corporate-culture differences.

  • Job Insecurity as downsizing becomes a rational decision due to roles duplication.

  • Culture Conflict which results in making co-operation more difficult, particularly from employees of the acquired company.

  • Work alienation as a result of reducing communication to a “need to know” basis.

  • Crisis Management mentality due to fear of losing control.

  • Staff Turnover due to decision centralization and lack of autonomy.

  • Adoption of a combat mentality, exacerbated by an "Us versus Them" attitude.

How Can We Reduce The Impact Of The Merger Syndrome?

It starts by acknowledging the importance of the human factor and employees psychology. As long as this central cause is identified and acknowledged, companies can start implementing the following:

  • Transparent and Continuous Communication by providing clear and up-to-date information as the M&A transaction progresses. While disseminating information prior the merger might have adverse results, it proves to be a good practice to enhance communication at least in the post-merger stage.

  • Implement a People-Centric Approach by preparing employees to cope with the change, and working on facilitating a co-operative work-environment.

  • Establish an Employee Retention Program to retain key-personnel.

  • Build up a common culture to overcome conflicts and turbulence during and post the merger.

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