Crisis management and trust building after a failed merger : an exploratory case study

Abstract

The topic of this work is the analysis of a failed merger in a family-owned company, taking into account the delicate interplay between intra-organizational trust, company culture, pride, and psychological contracts on the one hand and crisis management and leadership on the other on the cultural situation after the crisis has been brought to an end. This is in general an interesting question due to the lack of scientific research in the respective area. The evolvement of trust, company culture, pride, psychological contracts during such a process is explored and compared to scientific results in literature. The objective is to get a cross-discipline overview about the parameters influencing a successful settlement of such a crisis. The analysis is performed on the basis of an exploratory case study. Interviews with the General Manager as well as the employees were conducted and evaluated. The changes of the above mentioned parameters during the process of a non-closed merger and the applied crisis management and successful leadership have been found to be in good accordance with the findings in literature, on the positive as well on the negative side of the outcome. Furthermore specific challenges in family firms have been verified for such phases in a company's life concerning culture, pride, trust, and psychological contracts. A set of recommendations has been found by evaluation of the interviews and research literature, respectively. In terms of an outlook, deeper research in the cultural issues after a failed merger of a family owned company is recommended in a generalized approach taking into account the parameters discussed above to get a deeper insight into the challenges of trust, pride, psychological contract, and culture, respectively, because due to the highly complex dependence of those parameters the results cannot be held generally valid.