Mergers and acquisitions (MandA) have been a popular strategy for organizations to consolidate and grow for more than a century. However, research in this field indicates that MandA are more likely to fail than succeed, with failure rates estimated to be as high as seventy-five percent. People-related issues have been identified as important causes for the high failure rate, but these issues are largely neglected until after the deal is closed. One explanation for this neglect is the low involvement of human resource (HR) professionals and the HR function during the MandA process. The strategic HR management literature suggests that a larger role for HR professionals in the MandA process would enable organizations to identify potential problems early and devise appropriate solutions. However, empirical research from an HR perspective has been scarce in this area.
This dissertation examines the role of the HR function and the HR processes followed in organizations during MandA. Employing a case-study research design, this study examines MandA undertaken by two large organizations in the electricity industry through the lens of a “process” perspective. Based on converging evidence, the case studies address three sets of related issues: (1) how do organizations undertake and manage MandA; (2) what is the extent of HR involvement in MandA and what role does it play in the MandA process; and (3) what factors explain HR involvement in the MandA process and, more generally, in the formulation of corporate goals and strategies. Results reveal the complexity of issues faced by organizations in undertaking MandA, the variety of roles played by HR professionals, and the importance of several key contextual factors–internal and external to the organization–that influence HR involvement in the MandA process. Further, several implications for practice and future research are explored.