Institutions and Organizational Socialization: Connectivity in the Human Side of Post-merger and Acquisition Integration

A common finding in research on mergers and acquisitions (M&As) is that these deals fail during integration in part due to a lack of connectivity with regard to the human side of merging organizations. A dilemma is that employees from the merging firms need to learn how to work together in the newly merged firm to attain common goals and avoid conflict. Thus, an important issue in M&A integration research is how to socialize employees post-merger. We examine the complementarities between institutional theory and organizational socialization in order to demonstrate how human capital can be effectively integrated post-merger. We argue that organizational socialization, through which employees acquire social knowledge and skills necessary to assume an organizational role in a newly merged firm, can be enhanced by understanding the types of institutions that are being internalized by employees. In particular, we examine how different socialization domains, defined by Chao et al. (1994) as individual work roles, organizational goals and values, people, language, organizational politics, and organizational culture, are affected by three institutional pillars: normative, regulative, and cognitive (Scott 2001). By understanding how institutions relate to socialization domains, scholars and managers can more effectively implement the socialization process that it is so crucial in M&A integration.