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Allocation Processes in Mergers and Acquisitions: An Organizational Justice Perspective
Author(s) -
Meyer Christine Benedichte
Publication year - 2001
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/1467-8551.00185
Subject(s) - mergers and acquisitions , ambiguity , equity (law) , perspective (graphical) , distributive justice , productivity , procedural justice , business , economics , economic justice , industrial organization , microeconomics , marketing , computer science , political science , psychology , finance , macroeconomics , law , perception , artificial intelligence , neuroscience , programming language
This paper contributes to the understanding of allocation processes in mergers and acquisitions by applying an organizational justice perspective. This is a perspective that has been neglected in past research on mergers and acquisitions, but which is important in understanding the challenges managers face in allocating human resources and other resources of symbolic importance. In particular, the paper examines the trade‐offs between multiple goals in selecting distributive and procedural justice rules, and identifies factors that constrain these choices. Mergers and acquisitions are typically driven by multiple motives. The findings presented in this paper suggest that there are different approaches to applying justice rules in mergers and acquisitions and that these approaches have different implications for meeting multiple goals. The choice of equity in combinations with fair procedural rules is an approach which complies with the two goals of maximizing economic productivity and fostering relationships. However, the choice of this approach rests upon an unbalanced power relationship and relatively low ambiguity. When there is a high degree of ambiguity and a balanced power relationship, management has to make trade‐offs between maximizing economic productivity and fostering relationships.