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Merger expert: If a merger doesn’t make sense to the staff, management has a problem

(Photo: Thomas Tolstrup )

Eight CBS departments are facing a large reorganization as 14 departments are cut down to 11. So far, some welcome the changes while others voice their criticism. CBS WIRE asked a professor what CBS can learn from her research on merger processes.

News |   14. May 2018

Anne M. Lykkegaard

Journalist

When the 271 municipalities in Denmark were to be cut down to 98, and the 13 counties were to become five regions back in 2007, the former minister of the interior, Lars Løkke Rasmussen and the Local Government DK (KL – Kommunernes Landsforening) invited CBS professor Anne-Marie Søderberg to share her insights.

Anne-Marie Søderberg has studied domestic and international mergers and acquisitions for decades. Among others, her work includes a longitudinal study together with six other Nordic business scholars of how four big Nordic banks merged into the Nordea corporation, and advising Denmark’s largest hospital, Rigshospitalet, on their merger with Glostrup Hospital.

And then she has, as an employee, experienced the latest merger at CBS first hand. This merger affected the Department of Intercultural Communication and Management (ICM) and the Department of International Business Communication (IBC), which later became the Department of Management, Society and Communication (MSC).

Now, eight departments (see fact box) are facing a substantial amount of restructuring, as 14 departments are being cut down to 11. Two departments are being split into three units in order to merge with other departments and to form an entirely new department, and some of the others are being merged as whole departments.

But what are the best ways to deal with merger processes? What roles are senior and middle management expected to play in order to make the process as frictionless as possible? And what happens if a merger is badly orchestrated and the voices of staff members are not listened to?

CBS WIRE met with Anne-Marie Søderberg to talk about her research and draw some parallels about the ongoing merger processes at CBS.

“I do hope that the ongoing reorganization processes at CBS can benefit from the knowledge that other CBS scholars and I have acquired through empirical studies of public and private mergers and the demanding post-merger integration processes. You should be aware that it can take years before those affected fully accept the organizational changes and engage themselves wholeheartedly in closer collaboration within new constellations,” she says.

The decision-makers have to give sense

The reason for the restructuring of the departments at CBS is rooted in a wish to “balance an existing overlap and to further strengthen the departments”, as the small size of several departments “entail fragility.”

Read more: Merging, fusion, reorganization? Eight CBS departments are facing restructuring

This reason in itself is rational, says Anne-Marie Søderberg, however, management – whether it be at CBS or in any organization – must also play a crucial role as “sensegivers” to the merger decisions as Anne-Marie Søderberg puts it.

“When private companies merge, top management often points out that the fusion can lead to new market shares, new products in the portfolio, or that a stronger research and development unit can ensure a more prosperous future for the company and its employees. When a CEO can point that out, the merger is much more likely to be met by acceptance among the employees, even when the merger may also imply moving to a new location, getting a new boss, or new colleagues. These are issues that may create anxiety among some employees, but others may perceive these changes as beneficial,” she says.

The merger means that the department’s clear and strong international profile is weakened publicly

CBS Professor in leading position

When the merger of the Department of Intercultural Communication Management (ICM), with the Department of International Business Communication (IBC) was announced, Anne-Marie Søderberg and many of her colleagues at ICM had difficulties making much sense of the management decision.

The employees were informed about the planned integration of the two departments at a meeting, in a press release, and in an email that stated that the merger would give rise to “new synergies”, and that as one unit, the two departments “would create a vibrant work environment” at Dalgas Have.

But when she and the other ICM employees asked senior management what they would actually gain by integrating IBC in ICM and moving from Porcelænshaven, where they had close collaborations with three other departments (INT, DBP and MPP),  they were encouraged to find more synergies by themselves and “create new activities in Henning Larsen´s beautiful building” that would “be buzzing with academic activities”.

“If management can’t point to why it makes good sense to go through with a merger and doesn’t succeed in convincing the staff, it will have a strong impact on the entire merger process,” she says.

Voices of dissatisfaction

CBS WIRE talked to several staff members currently affected by the approaching reorganization. However, as it is a sensitive topic and because the merger process is ongoing, most of the staff members have chosen either to be anonymous or have not wanted to comment on the situation.

A professor, who wants to remain anonymous, writes in an email “the process is without any form of legitimacy. We haven’t got one single valid reason for the reorganization, and especially for the dissolution of the Department of Business and Politics. The management have put themselves in a difficult situation and show themselves to be small leaders, as they don’t dare to 1: pull back the decision in recognition of it not being valid, or 2: stand by the decision and admit that it is a political decision.”

An unintended consequence of a badly organized merger is, according to Anne-Marie Søderberg, that it can be difficult to get everyone to embrace the new organization.

“If senior management does not listen to critical voices, and does not offer convincing arguments that support their own decision making, it can be difficult to get everyone to embrace the new organization”, says Anne-Marie Søderberg and adds:

“Groups of employees will talk negatively about the new organization. Maybe not publicly, but with colleagues who share their opinion. They can confirm each other’s experiences of not being seen or heard, and in the long run it may create difficulties in integrating these staff members in the new departments as a cultural community,” she says.

The employees have a professional pride, and part of their professional identity is connected to the department.

Jens Gammelgaard, head of INT

The Department of International Economics and Management (INT) is one of two departments facing a larger reorganization, as the department is being split in three and discontinued. However, Jens Gammelgaard, the head of the department, is, to a large extent, positive about the reorganization.

“In this process, it has been important for me to engage in decisions which make sense. It is my experience that we have had the time to investigate the possible outcomes and that our arguments have been taken into account. The results of the merger is sensible in terms of the people who will join the other departments and for the ones who are joining us to create a new one,” he says.

However, Jens Gammelgaard does not make a secret out of the fact that it is not an easy process for the employees who have had to stand on the sideline in a state of waiting.

“It is obvious that a restructuring like this creates a lot of insecurity for the employees. They have a professional pride, and part of their professional identity is connected to the department. All of a sudden, they need to address that feeling of connectivity and make it flourish elsewhere. That isn’t easy.”

Let’s walk together

The process of announcing and putting the reorganization in motion is not necessarily long. However, developing new cultures and creating new departmental identities takes time.

A professor in a leading position at CBS, who wants to remain anonymous, expresses his concerns about the future of the culture and identity in his department.

“The merger means that the department’s clear and strong international profile is weakened publicly. It would be a challenge to brand ourselves in the same way as part of another department,” says the professor and adds:

“We have walked around the same totem pole together for such a long time. Now, we have to throw it away and find a new one with some new people. It is not impossible, but it is challenging.”

If management can’t point to why it makes good sense to go through with a merger and doesn’t succeed in convincing the staff, it will have a strong impact on the entire merger process

Anne-Marie Søderberg, CBS professor

Anne-Marie Søderberg explains that during a merger it is important to listen to the different voices in the organization and the stories being told, both by those who are enthusiastic and those who are deeply concerned.

As an example of how to do that, she mentions that she organized a workshop at Rigshospitalet after it was merged with Glostrup Hospital. Before the workshop, the employees of the hospitals – doctors, nurses, bioanalysts, medical secretaries, and hospital porters – were asked to, anonymously, write down their positive and negative thoughts about the merger.

At the end of the day, the employees’ opinions about the merger process were taken into consideration, and they received further support from middle management to improve communication and strengthen collaboration across units and locations.

Another way of creating a feeling of community is to assemble task forces in the new organizations.

“When IBC and ICM was going to merge, staff met at research seminars and across study programs to get an overview of the expertise and interests people have and to discuss how they could benefit from being together. This is where the head of a new department, a head of the secretariat, and center directors play crucial roles in setting up task forces, scheduling seminars, and in planning events that may – gradually – develop a new departmental culture,” she says.

Furthermore, Anne-Marie Søderberg also encourages CBS staff faced with the reconstruction process not to focus too narrowly on their affiliation to one or another department, since we all have multiple identities:

“I never think of myself only as an MSCer. I teach at interdepartmental study programs and I collaborate closely with researchers from other universities and other countries. I am a member of a large and strong international network of researchers and business people, and they contribute just as much to my sense of belonging, or perhaps even more.”

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Comments

  1. Robert Phillipson says:

    The disastrous effects of merging being enforced top-down on departments is one aspect of the mismanagement of universities in the United Kingdom. See ‘Speaking of Universities’ by Stefan Collini, Verso 2017. Warmly recommended for anyone concerned with the trends of recent decades. Denmark has many similarities with the UK. The massive reduction of foreign languages in both countries, not least at CBS, is also symptomatic of an excessive reliance on financial constraints and blind faith in market logic, without the mid- and long-term consequences for the country being considered.

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