Trust dynamics in acquisitions: A case survey

TRUST DYNAMICS IN ACQUISITIONS: A CASE SURVEY G Ü N T E R K . S TA H L , R I K A R D L A R S S O N , I N A K R E M E R S H O F, A N D S I M B . S I T K I N Drawing on the organizational trust literature and research on postmerger integration, the authors develop a model that conceptually synthesizes the antecedents and consequences of trust in acquired organizations. The model proposes that the acquiring and target fi rms’ relationship history, the inter- fi rm distance, and the acquirer’s integration approach will affect target fi rm member trust in the acquiring fi rm’s management. Target fi rm member trust, in turn, may infl uence several sociocultural integration outcomes as well as postacquisition performance. The results of a case survey suggest that certain aspects of the relationship history and interfi rm distance, such as the fi rms’ collaboration history and preacquisition performance differences, are poor predictors of trust, whereas integration process variables, such as speed of integration, communication quality, and acquirer multiculturalism are major factors infl uencing trust. The implications for postmerger integration research and practice are discussed. © 2011 Wiley Periodicals, Inc. Keywords: mergers and acquisitions, postmerger integration, trust, case survey Introduction F or the past three decades, a growing body of research has addressed the vari- ables that affect the success of mergers and acquisitions (M&A). Despite this large body of research, however, the key factors for M&A success and the reasons why so many M&A fail remain poorly understood. In a meta-analysis of 93 empirical studies, King, Dalton, Daily, and Covin (2004) revealed that the performance of acquiring firms failed to surpass that of nonacquiring firms. This meta-analysis also showed that none of the most commonly researched antecedent variables (degree of diversification, degree of relatedness, method of payment, and prior acquisition experience) were significant in explaining variance in postacquisition perfor- mance. King et al. (2004) concluded that “despite decades of research, what impacts the performance of firms engaging in M&A activ- ity remains largely unexplained” (p. 198). In recent years, research attention has shifted to the less tangible sociocultural vari- ables and human resource issues involved in the postmerger integration process as possible contributing factors to the success or failure of M&A. Variables such as cultural fit (Stahl & Voigt, 2008; Weber, Shenkar, & Raveh, 1996); management style similarity (Datta & Grant, 1990; Larsson & Finkelstein, 1999); the pat- tern of dominance between merging firms (Cartwright & Cooper, 1996; Hitt, Harrison, & Ireland, 2001); the acquirer’s degree of cultural tolerance (Chatterjee, Lubatkin, Correspondence to: Günter K. Stahl, Vienna University of Economics and Business, Augasse 2-6, Vienna, Austria, Phone: +43-(1)-31336-4434, E-mail: [email protected] Human Resource Management,Human Resource Management, September–October 2011, Vol. 50, No. 5, Pp. 575 – 603 © 2011 Wiley Periodicals, Inc. Published online in Wiley Online Library (wileyonlinelibrary.com). DOI:10.1002/hrm.20448 576 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm Schweiger, & Weber, 1992; Pablo, 1994); issues of procedural and distributive justice (Ellis, Reus, & Lamont, 2009; Meyer & Alten- borg, 2007); attention to cultural and HR issues in the due diligence process (Gebhardt, 2003; Pucik, Evans, Björkman, & Stahl, 2010); the acquiring managers’ leader- ship style (Kavanagh & Ashka- nasy, 2006; Sitkin & Pablo, 2005); and more broadly, the social climate surrounding a takeover (Birkinshaw, Bresman, & Håkan- son, 2000; Vaara, 2003) have increasingly been recognized as critical to the success of M&A. A potentially important, but underexplored, variable in the postmerger integration process is trust. Indirect evidence for the critical role of trust in M&A can be drawn from research that has sug- gested that developing trust is critical to successfully forming and implementing cooperative alli- ances between firms, such as joint ventures, research and develop- ment collaborations, and market- ing partnerships (Gulati, 1995; Inkpen & Currall, 2004; Zaheer, McEvily, & Perrone, 1998). In the context of M&A, a large body of anecdotal and case study evidence (e.g., Chua, Engeli, & Stahl, 2005; Olie, 1994), as well as evidence from interviews with man- agers and employees affected by M&A (e.g., Krug & Nigh, 2001; Schweiger, Ivancevich, & Power, 1987) has suggested that trust is criti- cal in the postmerger integration process. The following quote from Daniel Vasella (Chua et al., 2005), CEO of Novartis, concerning the merger that created the Swiss pharmaceutical giant highlights both the importance and fragility of trust in M&A: Only in a climate of trust are people willing to strive for the slightly impos- sible, to make decisions on their own, to take initiative, to feel accountable; trust is a prerequisite for working together effectively. … Among all the corporate values, trust was the one that suffered most from the merger. (pp. 391–392) Despite the large body of anecdotal evi- dence supporting the critical role of trust in M&A, little is known about the factors that facilitate or hinder how trust emerges in ac- quired organizations and how that trust might influence the postacquisition integration pro- cess. In this study, the researchers used a case survey design to test a model that synthesizes current understanding of the antecedents and consequences of trust in acquisitions, with target firm member trust in the acquiring firm management as the central variable. The Role of Trust in the Postacquisition Integration Process Research on trust within and between organi- zations has shown that trust exists at differ- ent levels. Whereas most research on interorganizational trust has been carried out at the firm level of analysis (e.g., Das & Teng, 1998; Ring & Van de Ven, 1992; Vlaar, Van den Bosch, & Volberda, 2007), trust has also been conceptualized at the individual, dy- adic, or group level, or as a multilevel phe- nomenon (see Currall & Inkpen, 2002). Because this study focuses on target firm member’s trust in the acquiring firm’s man- agement, the level of analysis chosen for the trustor is the individual, or on an aggregated level, the group (i.e., the members of the target firm). This conceptualization of trust is consis- tent with Zaheer et al.’s (1998) definition of in- terorganizational trust as “the extent of trust placed in the partner organization by the mem- bers of a focal organization” (p. 142). Although trust expectations ultimately reside within the individual, this definition of trust does not preclude the possibility that individuals within an organization have a collectively held trust orientation toward another group or organiza- tion (Gulati, 1995). Central to most definitions of trust are the notions of risk and vulnerability. In the absence of risk, trust is irrelevant because there is no vulnerability (Lewicki & Bunker, 1996; Mayer, Davis, & Schoorman, 1995; Rousseau, Sitkin, Burt, & Camerer, 1998). In this study, we refer Despite the large body of anecdotal evidence supporting the critical role of trust in M&A, little is known about the factors that facilitate or hinder how trust emerges in acquired organizations and how that trust might influence the postacquisition integration process. TRUST DYNAMICS IN ACQUISITIONS 577 Human Resource Management DOI:10.1002/hrm to trust as “a psychological state comprising the intention to accept vulnerability based upon positive expectations of the intentions or behavior of another” (Rousseau et al., 1998, p. 395). Conversely, distrust can be defined as negative expectations of another’s intentions or behavior (Lewicki, McAllister, & Bies, 1998; Sitkin & Roth, 1993). This conceptualization of trust has also been applied to interorganiza- tional relationships. For instance, in joint ventures, factors such as open communication and information exchange, task coordination, informal agreements, and levels of surveil- lance are all manifestations of trust based on a willingness to rely on, or be vulnerable to, another party under a condition of risk (Currall & Inkpen, 2002; Inkpen & Currall, 1997). In the context of M&A, scholars have observed that the turbulence following the announcement of a merger or an acquisition creates a breeding ground for distrust be- cause the situation is unpredictable, easy to misinterpret, and people feel vulnerable (Krug & Nigh, 2001; Stahl & Sitkin, 2010). Social networks and mutual understanding established through years of working to- gether are sometimes destroyed in an in- stant. With a new organization, a new top management team, and a new superior, trust is lacking initially, and employees are left wondering what the next wave of changes will bring and whether they will be affected negatively (Lubatkin, Schweiger, & Weber, 1999; Marks & Mirvis, 2001). Employees may perceive a merger as a psychological contract violation or a breach of trust, which requires renegotiating the broken psycho- logical contract (Buono & Bowditch, 1989; Cartwright & Cooper, 1996). The period fol- lowing the takeover announcement is thus one of intense vulnerability and risk assess- ment in which trust is essential. Theoretical work on trust has suggested that five factors determine whether a given party will have a greater or lesser amount of trust for another party: perceived ability, benevolence, integrity, openness, and value congruence (Gabarro, 1978; Mayer et al., 1995; Whitener, Brodt, Korsgaard, & Wer- ner, 1998). For example, of the nine bases of trust that Gabarro (1978) identified, four— functional competence, interpersonal com- petence, business sense, and judgment — are related to the ability dimension of trust. Be- nevolence involves a concern for the other’s welfare and the motivation to maximize joint outcomes (Mishra, 1996). For instance, in manager–subordinate relationships, act- ing in a way that protects em- ployees’ interests, being sensitive to employees’ needs, and refrain- ing from exploiting employees for the benefit of one’s own inter- ests all affect the degree to which managers are judged as trustwor- thy (Whitener et al., 1998). The third dimension, integrity, can be explained as expectations regard- ing the reliability, dependability, or consistency of a person’s be- havior. The consistency of a par- ty’s past actions, credible communications about the trustee from other parties, and the extent that the party’s actions are congruent with his or her words all affect the degree to which that party is judged to have integrity (Mayer et al., 1995). In addition, several schol- ars have identified openness as an important element of trust (Mishra, 1996; Whitener et al., 1998). A person can be consid- ered open to the extent that he or she freely shares thoughts, feelings, and information with another person. In the absence of open communication, a person may be perceived as dishonest and untrustworthy. Finally, re- search has shown that perceived value con- gruence helps establish trust among individuals, groups, and organizations (Gab- arro, 1978; Sitkin & Roth, 1993). For exam- ple, it has been observed that shared norms, goals, and values help create and maintain trust among alliance partners (e.g., Sarkar, Cavusgil, & Evirgen, 1997). In this study, we propose that the acquir- ing managers’ perceived ability, integrity, be- nevolence, openness, and value congruence are important to understand the factors that influence how trust develops in the aftermath In the context of M&A, scholars have observed that the turbulence following the announcement of a merger or an acquisition creates a breeding ground for distrust because the situation is unpredictable, easy to misinterpret, and people feel vulnerable. 578 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm of a takeover. From the trust literature, how- ever, it is not clear how the bases of trust combine to influence overall trust. Although some scholars have suggested that the dimen- sions of perceived trustworthiness combine multiplicatively in determining overall trust (e.g., Mishra, 1996), others have argued that in certain situations, a meaningful amount of trust can develop with lesser degrees of one or more of the factors. This suggests an additive effect on trust (e.g., Mayer et al., 1995). Yet others have proposed that the different bases of trust do not combine; instead, individuals tend to “partition” their trust and work with interaction partners around specific and com- partmentalized interdependencies (Lewicki et al., 1998). The model presented in this ar- ticle rests on the idea that the five dimensions of perceived trustworthiness vary largely inde- pendently of one another and represent different components of an overall trust con- struct. This implies that each of the dimen- sions contributes to a general assessment of how much the other party can be trusted (or must be mistrusted). In the next section, this study explores how factors related to the firms’ relationship history, interfirm distance, and integration approach may affect target firm member trust in the acquiring firm management. Because little theoretical clarity exists concerning how these antecedent variables influence tar- get firm members’ perceptions of the acquir- ing executives’ ability, integrity, benevolence, openness, and value congruence, this study explores the effects on overall trust. Note, however, that different antecedents may in- fluence the five trustworthiness attributes in different ways (Stahl & Sitkin, 2005, 2010). Antecedents of Target Firm Member’s Trust in the Acquiring Firm’s Management Figure 1 indicates that target firm member trust in the acquiring firm management is af- fected by the firms’ relationship history and interfirm distance, as well as by process vari- ables related to the acquirer’s integration ap- proach. This is consistent with extant theory on M&A integration. A “process perspective” (Haspeslagh & Jemison, 1991; Jemison & Sit- kin, 1986) on M&A suggests that whereas factors such as strategic and organizational fit determine the potential for synergies, the extent to which that potential is realized de- pends on the acquirer’s ability to manage the integration process effectively. Status Variables Process Variables Integration Approach • Autonomy preservation • Multiculturalism • Integration speed • Perceived benefits • Communication quality Relationship History • Collaboration history • Mode of takeover Interfirm Distance • Cultural distance • Power asymmetry • Performance differences Perceived Trustworthiness of Acquiring Firm Management • Ability • Integrity • Benevolence • Openness • Value Congruence Trust Sociocultural Integration Outcomes • Commitment • Satisfaction • Acceptance of change • Intent to stay • Willingness to cooperate • Information sharing • Job performance Postacquisition Performance • Sales growth • Realized profit FIGURE 1. Model of the Antecedents and Consequences of Trust in Acquisitions. Note: Solid arrows indicate relationships tested in this study; dotted arrows indicate proposed relationships. TRUST DYNAMICS IN ACQUISITIONS 579 Human Resource Management DOI:10.1002/hrm Relationship History Relationship history encompasses the target firm’s preexisting relationship with the acquir- ing firm and the mode of takeover. This study proposes that the extent to which the mem- bers of the target firm perceive the acquiring firm management to be trustworthy is a func- tion of prior interfirm contact, specifically a history of collaboration. Prior research on the role of trust in work groups, strategic alliances, and socially embedded partnerships has sug- gested that trust evolves over time through repeated interactions between partners (Lewicki et al., 1998; Ring & Van de Ven, 1992; Zaheer et al., 1998). As Rousseau et al. (1998) noted, “[r]epeated cycles of exchange, risk taking, and successful fulfillment of expectations strengthen the willingness of trusting parties to rely upon each other and expand the resources brought into the exchange” (p. 399). Furthermore, part- ners learn each other’s idiosyncrasies and develop deeper mutual understanding over time, which improves the relationship’s affec- tive quality (Parkhe, 1993). Indirect evidence from the alliance literature suggested that in acquisitions, familiarity through prior contact may facilitate the emergence of trust. Ring and Van de Ven (1992) argued, however, that trust can be expected to emerge between organiza- tions only when they have successfully com- pleted transactions in the past and they perceive one another as complying with norms of equity. If members of the target firm and the acquiring firm had a conflict-rich or inequita- ble exchange prior to the acquisition, this is likely to limit the potential for trust to emerge. Thus, both the length and the quality of the prior relationship with the acquiring firm will be critical in influencing trust. In addition to interaction history, this study proposes that the mode of takeover or tone of the nego tiations—whether friendly or hostile—is an important factor in determining target firm member trust. It has been argued that hostile takeover tactics can result in sharp interorganizational conflict and difficulties integrating acquired firms (Buono & Bowditch, 1989; Hambrick & Cannella, 1993; Hitt, Har- rison, & Ireland, 2001). Hambrick and Can- nella (1993) observed that bitterness and acrimony characterize the atmosphere sur- rounding a hostile takeover, making smooth social integration after the deal less likely. Fur- ther, trust can erode when executives from a hostile takeover target and those of the acquiring firm battle one another in a public forum, with each being suspicious of the other’s intentions and claiming the other party lacks integrity. Support for this proposi- tion can be found in research show- ing that hostile takeover attempts lead to resistance and increased cohesiveness among the target firm members; for example, as mani- fested in “us-versus-them” think- ing (Elsass & Veiga, 1994; Marks & Mirvis, 2001; Vaara, 2003). In contrast, friendliness is likely to generate perceptions of openness, goodwill, and trustworthiness (Buono & Bowditch, 1989). Collectively, these arguments suggest that the firms’ relationship history will be critical in influencing target firm member trust. Thus, the following hypotheses are advanced: Hypothesis 1a: The longer the fi rms’ col- laboration history, the higher the level of trust that target fi rm members have in the acquiring fi rm’s management. Hypothesis 1b: The more positive the fi rms’ collaboration history, the higher the level of trust that target fi rm mem- bers have in the acquiring fi rm’s man- agement. Hypothesis 2: The friendlier the mode of takeover, the higher the level of trust that target fi rm members have in the acquiring fi rm’s management. Interfi rm Distance The second set of trust antecedents affect trustworthiness attributions through percep- tions of interfirm distance. These variables include cultural distance, power asymmetry, and differences in performance. Collectively, these arguments suggest that the firms’ relationship history will be critical in influencing target firm member trust. 580 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm The cultural distance hypothesis (Shenkar, 2001; Ward, 2003) suggests that the difficul- ties, costs, and risks associated with cross-cul- tural contact increase with growing cultural differences among two or more individuals, groups, or organizations. Although studies that tested the cultural distance hypothesis in the context of M&A have yielded incon- clusive results (see Stahl & Voigt, 2008; Teeri- kangas & Very, 2006; Weber & Drori, 2008 for reviews), research on trust has shown that shared norms and values facilitate the devel- opment of trust and the emergence of a shared identity (Lewicki et al., 1998; Sarkar et al., 1997). Conversely, trust can erode and the potential for conflict can increase when a person or group is perceived as not sharing key values (Sitkin & Roth, 1993). Social iden- tity theory (Tajfel, 1982; Turner, 1982) sug- gests that in a merger, the mere existence of two different cultures is enough to lead to in- group/out-group bias (e.g., Elsass & Veiga, 1994; Hogg & Terry, 2000; Kleppestø, 2005). In-group bias and out-group derogation are likely to be greatest when the out-group is perceived to be very different from the in- group, such as in cross-border acquisitions (Björkman, Stahl, & Vaara, 2007). In interna- tional acquisitions, cultural stereotypes and xenophobia may further fuel feelings of re- sentment, hostility, and mistrust (Teerikangas & Very, 2006; Vaara, 2003). Power asymmetry refers to the extent to which there can be a unidirectionality of in- fluence from acquirer to target. The ability and tendency of the acquiring firm to exer- cise power to enforce its preferences upon the target is particularly strong when the acquirer is significantly larger than the target firm. In such cases, the acquirer tends to overlook or trivialize the target firm members’ needs (Datta & Grant, 1990; Jemison & Sitkin, 1986). As Pablo (1994) noted, the effect of power differences “is not simply the over- whelming and domination of the smaller entity through sheer magnitude, but also the intensification of beliefs about superiority and inferiority” (p. 810). Acquiring execu- tives tend to adopt an attitude of superiority and treat the members of the target firm as inferior, thus leading to status degradation and, in many cases, the voluntary departure of key employees (Hambrick & Cannella, 1993; Lubatkin et al., 1999). Research has suggested that the mere existence of power asymmetries may generate suspicion and mistrust because members of the target firm may anticipate being dominated by the ac- quiring executives. For instance, it has been observed that target firm members altered their behavior in response to the threat of a powerful buyer even prior to being acquired; that is, they sought employment elsewhere (Hambrick & Cannella, 1993; Krug & Nigh, 2001). As power asymmetry increases, the weaker party tends to become distrustful be- cause the more powerful party has no need to be trusting and can use its relative power to obtain cooperation (Das & Teng, 1998). Finally, preacquisition differences in per- formance may also affect trust between the combining firms. Underperformance of the target relative to the acquirer is likely to in- crease the acquirer’s tendencies toward arro- gance and domination (Datta & Grant, 1990; Jemison & Sitkin, 1986). Hambrick and Can- nella (1993) observed that even if executives of a poorly performing firm are not fired out- right after being acquired, they may feel infe- rior or depart voluntarily because they anticipate the dominating behaviors of their “conquerors.” Lower-level employees are likely to experience anxiety from fears they might lose their jobs or be unable to meet the acquirer’s performance standards. Paradoxi- cally, though, it has been observed that when a financially healthy buyer acquires an un- derperforming firm, target firm members sometimes welcome the takeover and are en- ergized to become part of something larger or more successful than themselves (e.g., Chaud- huri, 2005). This is especially true when they see the acquiring company as being a savior or having a more enlightened culture or when they see other positive outcomes (bet- ter pay, more prestige, etc.) of being associ- ated with the acquirer. Thus, the authors propose that there is not a general effect of performance differences on target firm mem- ber trust; rather, the relationship is charac- terized by ambivalence—trust and distrust TRUST DYNAMICS IN ACQUISITIONS 581 Human Resource Management DOI:10.1002/hrm coexist. The authors will explore this issue in the study and posit a nondirectional hypothesis. Taken together, these arguments support the following hypotheses: Hypothesis 3: The greater the cultural distance, the lower the level of trust that target fi rm members have in the acquir- ing fi rm’s management. Hypothesis 4: The greater the power asymmetry, the lower the level of trust that target fi rm members have in the ac- quiring fi rm’s management. Hypothesis 5: Underperformance of the target relative to the acquirer will affect the level of trust that target fi rm mem- bers have in the acquiring fi rm’s man- agement. Integration Approach In addition to the status variables discussed above, the authors’ analysis suggests that trust is influenced by a set of process variables relating to the acquirer’s postacquisition inte- gration approach. Theoretically, integration can result in a balanced merging of two organizations, cultures, and workforces, yet this balance rarely occurs in acquisitions. Instead, the acquirer typically removes auton- omy from the target firm and imposes a rigor- ous set of rules, systems, and performance expectations to gain control quickly (Jemison & Sitkin, 1986; Marks & Mirvis, 2001; Pablo, 1994). Removing autonomy can be devastat- ing from the perspective of the members of the target firm and lead to resistance and hos- tility (Hambrick & Cannella, 1993; Krug & Nigh, 2001) as managers and employees vig- orously defend their autonomy. This is a situ- ation that Datta and Grant (1990) have termed the “conquering army syndrome” (p. 32). Moreover, because tight controls tend to signal the absence of trust, the use of controls typically hampers trust from emerging, often resulting in a cycle of escalating distrust and conflict (Jemison & Sitkin, 1986). In such a situation, the acquirer’s executives may be perceived as uniformly malevolent and lacking integrity, especially in cases where target firm members perceive a gap between the acquirer’s stated goals and intentions (e.g., a so-called merger of equals) and the actual integration approach taken, as could be observed in the case of the Daimler-Chrysler merger (Epstein, 2004; Gebhardt, 2003). Another potentially important influence on trust is the acquirer’s multiculturalism (Chatterjee et al., 1992; Nahavandi & Malekzadeh, 1988; Pablo, 1994). The term multiculturalism refers to the degree to which an organization values cultural diversity and is willing to tolerate and encourage it (Naha- vandi & Malekzadeh, 1988). A multicultural acquirer considers diversity an asset and is therefore likely to allow an acquired firm to retain its own values and modus operandi. In contrast, a unicultural acquirer emphasizes conformity and adhering to a unique organi- zational ideology; therefore, it is more likely to impose its culture on the target firm. Jemi- son and Sitkin (1986) observed that cultural arrogance and insensitivity can trigger feel- ings of resentment, anger, and hostility within target firm members. Cultural intoler- ance is also likely to increase the tendency to overemphasize cultural differences, thereby resulting in perceived value incongruence and attitudes polarized toward distrust (Sit- kin & Roth, 1993; Vaara, 2003). Another aspect of the integration approach that may affect trust is the speed of integration. In the M&A literature, there is considerable disagreement about the nature of the relation- ship between the speed of integration and integration outcomes. Although some authors (e.g., Jemison & Sitkin, 1986) have cited the tendency to consummate deals too hastily as a major contributor to the high failure rate of M&A, others (e.g., Buono & Bowditch, 1989; Killing, 2003; Marks & Mirvis, 2001) have sug- gested that a window of opportunity exists during the short time after an acquisition when the organization is “unfrozen.” During this time, employees expect change and are thus malleable to new ways of doing things. Yet other scholars have suggested that 582 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm integration speed is a relative concept and should be contingent upon the strategic intent behind the acquisition and the integration ap- proach (Angwin, 2004; Stahl, Pucik, Evans, & Mendenhall, 2004). Despite these complexi- ties, compelling arguments exist for rapid inte- gration following an acquisition. From a trust perspective, hesitation in approaching integra- tion and telling employees that little will change is likely to create suspicion; indeed, employees expect significant change following a takeover (Buono & Bowditch, 1989; Marks & Mirvis, 2001). On the contrary, proceeding slowly prolongs the time employees experi- ence uncertainty and increases the exponen- tial effect of the rumor mill (Angwin, 2004). Collectively, these arguments suggest that a high speed of integration is associated with greater target firm member trust. Evidence also exists that the perceived benefits of the organizational changes that result from the takeover, particularly the qual- ity of postacquisition job security and reward changes, are critical factors in determining employees’ reactions to an acquisition (Hunt, 1990; Schweiger & Walsh, 1990; Van Dick, Ullrich, & Tissington, 2006). For instance, Graves (1981), in a case study of an acquisi- tion of a firm of brokers in the reinsurance industry, found that employees’ reactions depended largely on the personal benefits and losses attributed to the takeover. If members of a target firm see the takeover offers opportuni- ties for increased job security and prospects for compensation and promotion, this will likely affect their perceptions of the acquirer in a positive way (e.g., in terms of the benevolence and competence dimensions of trust). This perception thereby increases overall trust and reduces the potential for conflict. For exam- ple, Chaudhuri (2005), in a case study of one of Cisco’s acquisitions, found that strong financial incentives and a vision of the merged entity that included an important role for the acquired employees helped promote trust and encouraged acquired employees to stay. Finally, the authors propose that the qual- ity of communication is a key factor in deter- mining the level of trust target firm members have in the acquiring firm’s management. Mergers and acquisitions are associated with high degrees of stress and uncertainty for the individuals affected, especially those in the target firm. Providing acquired employees with credible and relevant information can reduce this uncertainty and mitigate feelings of mistrust and suspicion (Bastien, 1987; Sch- weiger & DeNisi, 1991), as well as increase employees’ identification with the postmerger organization (Ellis et al., 2009). A lack of cred- ible and open communication, on the other hand, has been found to result in rumors, anxiety about job security, and mistrust in management (Buono & Bowditch, 1989; Marks & Mirvis, 1998). Although the credibility of the information the acquirer provides can be considered a sine qua non for trust to emerge, Hogan and Overmyer-Day (1994) found that too much information disseminated in acqui- sitions characterized by high levels of integra- tion actually exacerbated undesirable attitudes and behaviors. This is because it increased anxiety in a situation where employees already felt uncertain about their jobs. This suggests that the quality of communication may be more important in affecting trust than the amount of information the acquirer provides. The foregoing discussion suggests the following hypotheses: Hypothesis 6: The greater the extent of retained autonomy, the higher the level of trust that target fi rm members have in the acquiring fi rm’s management. Hypothesis 7: The greater the acquirer’s degree of multiculturalism, the higher the level of trust that target fi rm mem- bers have in the acquiring fi rm’s man- agement. Hypothesis 8: The greater the speed of integration, the higher the level of trust that target fi rm members have in the ac- quiring fi rm’s management. Hypothesis 9: The greater the per- ceived benefi ts from the takeover, the higher the level of trust that target fi rm members have in the acquiring fi rm’s management. TRUST DYNAMICS IN ACQUISITIONS 583 Human Resource Management DOI:10.1002/hrm Hypothesis 10: The higher the quality of communication by the acquirer, the higher the level of trust that target fi rm members have in the acquiring fi rm’s management. Collectively, the evidence suggests that aspects of the firms’ relationship history, in- terfirm distance, and the acquirer’s integra- tion approach affect target firm member trust. The next section discusses the conse- quences of that trust for the postmerger inte- gration process. Consequences of Target Firm Member’s Trust Figure 1 proposes that the degree to which the target firm members trust the acquiring firm’s management is likely to affect a variety of behavioral and attitudinal outcomes and postacquisition performance. Sociocultural Integration Outcomes Sociocultural integration represents an impor- tant dimension of acquisition success from an organizational and human resources perspec- tive. It has been defined as creating positive attitudes toward the new organization, devel- oping a sense of shared identity and compat- ible values, and gaining commitment and motivation from acquired personnel (Birkin- shaw et al., 2000; Björkman et al., 2007; Shrivastava, 1986). In M&A research, socio- cultural integration success has been assessed using various behavioral and attitudinal meas- ures, including employee commitment (e.g., Weber et al., 1996), resistance (e.g., Larsson & Finkelstein, 1999), turnover (e.g., Schoenberg, 2004), acculturation (e.g., Larsson & Lubat- kin, 2001), and cooperation (e.g., Weber et al., 1996), among others. These variables capture different aspects of the sociocultural integra- tion process, but have also been shown to be highly interrelated (Stahl & Voigt, 2008; Weber et al., 1996). Most of these attitudes and behaviors require a willingness to be vulnerable on the part of the target firm members and to engage in behaviors that put them at risk— and thus require trust (Lewicki, Tomlinson, & Gillespie, 2006; Mayer et al., 1995). After a takeover, the willingness to be vulnerable may appear in target firm em- ployees who engage in open and candid communication with ac- quiring firm managers, who are willing to subjugate their per- sonal goals for the goals of the new organization, who remain with the organization even though they could get attractive jobs elsewhere, and who engage in other behaviors that put them at risk (Stahl & Sitkin, 2010). Conversely, the negative em- ployee reactions and integration outcomes often observed in M&A, such as resistance, lack of com- mitment to the new organiza- tion, focusing on personal security rather than goals, a ten- dency not to pass information up or down, and high rates of turnover (Buono & Bowditch, 1989; Marks & Mirvis, 1998; Olie, 1990; Schweiger, 2002), may reflect target firm members’ unwillingness to be vulnerable and to engage in behaviors that put them at risk. These dysfunctional atti- tudes and behaviors can thus be explained partly in terms of trust (or a lack thereof). The results of two meta-analyses of research on the role of trust in organizational settings (Dirks & Ferrin, 2001, 2002), which suggest that trust affects a variety of attitudinal and behavioral outcomes, support this reason- ing. Such outcomes include communication and information sharing, organizational commitment, citizenship behaviors, and in- tent to stay in the organization—the very variables that have been observed to suffer during the postmerger integration phase. Taken together, the two streams of research on organizational trust and on sociocultural integration in M&A suggest the following hypothesis: Hypothesis 11: The higher the level of trust that target fi rm members have in the acquiring fi rm’s management, the greater the likelihood of positive socio- Collectively, the evidence suggests that aspects of the firms’ relationship history, interfirm distance, and the acquirer’s integration approach affect target firm member trust. 584 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm cultural integration outcomes, such as employee commitment, satisfaction, willingness to accept change, willingness to cooperate, information sharing, and intent to stay. Postacquisition Performance We propose that target firm members’ lack of trust will not only undermine the sociocultural integration process, but will also lead to poor performance in the post- acquisition period. A growing body of research (e.g., Birkin- shaw et al., 2000; Haspeslagh & Jemison, 1991; Larsson & Lubat- kin, 2001; Schweiger, 2002) has shown that executing a well- designed integration process that minimizes interorganiza- tional, interpersonal, and inter- cultural friction is essential to capturing anticipated synergies. For example, Birkinshaw et al. (2000), in a study of foreign ac- quisitions made by Swedish mul- tinationals, found that mutual respect and trust made the postacquisition capability transfer and re- source sharing easier. Successful efforts to transfer knowledge and capabilities, in turn, facilitated the development of a shared identity and trust. These findings suggest that poor sociocultural integration and lack of trust may limit the effective- ness of efforts to integrate tasks and hinder abilities to exploit synergies. Failure to re- alize anticipated synergies may be reflected in accounting-based performance measures such as declining sales, profits, or return on assets (Harrison et al., 1991). Collectively, these arguments suggest that lack of trust may affect the postacquisition performance in two ways: (a) through its ad- verse effect on the sociocultural integration process, and (b) by undermining the transfer of capabilities, resource sharing, and interor- ganizational learning. This leads to our final hypothesis: Hypothesis 12: The higher the level of trust that target fi rm members have in the acquiring fi rm’s management, the greater the likelihood of positive postac- quisition performance outcomes, such as sales growth or increased profi ts. Method The hypotheses were tested using the case survey method. Case surveys involve quanti- fying a group of case studies for statistical analysis (Bullock & Tubbs, 1987; Jauch, Os- born, & Martin, 1980). The basic procedure includes (a) selecting a set of case studies rel- evant to the research question, (b) develop- ing a coding scheme to systematically convert the qualitative case descriptions into quanti- fied variables, (c) using multiple raters to code the cases and measure interrater reliabil- ity, and (d) statistically analyzing the coded data (Larsson, 1993). Prior research has established the useful- ness of the case survey method for investigating complex organizational pro- cesses (e.g., Larsson & Finkelstein, 1999; Miller & Friesen, 1980). Such research has indicated that the case survey method is an economical, yet powerful method in research fields where case studies dominate. It allows researchers to capture a broad range of con- ditions and identify and test patterns in situ- ations where an experimental design is not possible and a large-scale survey design would be impractical. The major strength of the case survey method is that it permits in-depth analysis of rich and detailed case descrip- tions, while providing large amounts of data to allow statistical testing and generalization of findings. These strengths make the case survey method particularly well suited for studying the postmerger integration process. Merger and acquisition case studies provide rich longitudinal process descriptions that allow coding of the social, cultural, and human resources issues involved in M&A (Larsson & Lubatkin, 2001). The validity of the case survey method is constrained by the quantity and espe- cially the quality of available case studies, We propose that target firm members’ lack of trust will not only undermine the sociocultural integration process, but will also lead to poor performance in the postacquisition period. TRUST DYNAMICS IN ACQUISITIONS 585 Human Resource Management DOI:10.1002/hrm as well as nonrandom collection of case studies and simplification of cases in the coding process. These validity concerns, however, can be addressed in several ways. These include analyzing the effects of research design characteristics on the case survey results and having the case authors participate in the coding process and vali- dation of case codings (Larsson, 1993). Pos- sible sampling biases can also be tested, and if needed, controlled through strati- fied sampling (Lucas, 1974). Sample Case Study Search To prevent sample bias and guarantee broad coverage, the case search involved computer- ized and manual searches of published and unpublished cases. Computerized searches were performed on the following databases: ABI/INFORM, Business Source Premier, Proquest, EconLit, PsychInfo, and Disserta- tion Abstracts Online. Other search strategies included screening bibliographies and case catalogues, Internet searches using standard search engines, and manual searches in rele- vant books and journals. More than 150 case studies of M&A completed over a 25-year period (1980–2005) were identified through this process. The cases were then screened for completeness and relevance. Selection Criteria For a case study to be included, it had to fulfill several criteria. First, only real-life cases qualified for inclusion in the case survey; fictional cases or cases that con- tained fictional elements, as are sometimes used for educational purposes, were excluded. Second, only cases covering the postacquisition integration period were selected; cases that focused only on the pre- acquisition phase or the time of the legal combination were excluded. Third, because this study‘s purpose was to examine the role that trust plays in acquisitions, only cases that addressed issues related to trust were included; cases dealing solely with financial or strategic issues were excluded. Fourth, because the model tested in this study is applicable only to M&A in which the pattern of power is asym- metrical, cases related to mergers of equals did not qualify for inclusion in this case survey. A closer inspection of the case stud- ies indicated that all mergers de- scribed in the cases (including those termed mergers of equals) showed clear signs of power asymmetry; hence, all cases were included. Sample Characteristics Fifty cases meeting the eligibility criteria were identified through this process. The final sample comprised both domestic and cross- border acquisitions in a variety of industries. Twenty cases involved U.S. acquirers, 25 cases European acquirers, two cases Asian acquir- ers, and in three cases the nationality of the acquirer was unclear. The Appendix provides a synopsis of the cases. Coding and Interrater Agreement The coding of cases was conducted according to guidelines provided by Larsson (1990, 1993). Some items were adopted from coding schemes Larsson used in earlier case surveys of M&A (e.g., Larsson, 1989; Larsson & Fin- kelstein, 1999; Larsson & Lubatkin, 2001). In addition, several new items were designed to measure variables suggested by the theoreti- cal model (e.g., collaboration history, trust, intent to stay). Most variables were measured using 5-point scales to maximize the amount of information captured through coding, with interrater reliability serving as a quality constraint. Items that could not be coded re- liably on a 5-point scale were subsequently collapsed to fewer points until acceptable re- liability was obtained. For each variable, the underlying theoretical concept was explained in the coding scheme and indicators were listed to facilitate the coding process. All cases were coded by at least two, some- times three, independent raters: one of this The final sample comprised both domestic and cross- border acquisitions in a variety of industries. 586 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm study’s authors, a postgraduate student who was unaware of the hypotheses, and in some cases, the case author. The interrater reliabil- ity coefficient used for metric variables was the intraclass correlation coefficient (ICC; Shrout & Fleiss, 1979). The ICCs above .70 can be considered satisfactory and those above .80 good. The ICCs obtained in this study ranged from .37 to .96. With one ex- ception, where the ICC was .69, variables with an ICC below .70 were excluded from the analyses. The interrater reliability coeffi- cient used for variables measured on a nomi- nal scale was Cohen’s kappa. As a rule of thumb, kappas above .80 can be considered good (Neuendorf, 2002). Kappas for the nominal variables measured in this study ranged from .76 to 1.00. Measures and Properties Given the dynamic nature of trust in M&A, multiple measure ment points were used to capture the evolution of trust over time. Figure 2 illustrates the temporal division of the post- acquisition integration period, starting at the time of the legal combination (T1) and con- cluding with the end of the case description (T3), when the acquired company was either successfully integrated or integration had failed (sometimes resulting in divestment). The point in time that divided the integration period into two halves was defined as T2. Vari- ables that could be expected to change over time were measured at several points in time. Because we were interested in how trust evolved over time, all trust indicators were measured at points T1, T2, and T3. Variables related to the firms’ relationship history (e.g., collaboration history) required only a single measurement at T1, as these variables repre- sent a cumulative record of the acquiring ex- ecutives’ past behaviors. Variables related to interfirm distance (e.g., power asymmetry) were measured at points T1, T2, and T3, as perceptions of interfirm distance may change over time. Integration process variables (e.g., integration speed) were measured during peri- ods T1–T2 and T2–T3, based on the assump- tion that these variables are dynamic and vary over time. For the same reason, integration outcomes (e.g., employee commitment) and performance measures (e.g., sales growth) were measured at both T2 and T3. This design made it possible to study how trust evolved over time and to examine the effects of the hypothesized trust antecedents at different stages of the inte gration process. Trust Target firm member trust was conceptualized as the perceived trustworthiness of the acquir- ing firm’s management in terms of five attributes: (a) Ability (ICC = .88 at T1; ICC = .94 at T2; ICC = .86 at T3), (b) Integrity (ICC = .71 at T1; ICC = .94 at T2; ICC = .94 at T3), (c) Benevolence (ICC = .73 at T1; ICC = .84 at T2; ICC = .83 at T3), (d) Openness (ICC = .52 at T1; ICC = .58 at T2; ICC = .42 at T3), and (e) Value Congruence (ICC = .83 at T1; ICC = .70 at T2; ICC = .88 at T3). Each of these attributes was Pre- Legal End of case description acquisition combination or point of divestment Middle T3T2T1 -----------------------------------X --------------x-------------X --------------------------X--------- > time FIGURE 2. Temporal Division of Postacquisition Integration Period. (Source: Adapted from Larsson, 1989.) TRUST DYNAMICS IN ACQUISITIONS 587 Human Resource Management DOI:10.1002/hrm measured using a 5-point scale, which ranged from 1 = very low to 5 = very high. The Openness measure had to be eliminated due to unreli- ability. In addition, an item measuring Overall Trust was included (ICC = .76 at T1; ICC = .79 at T2; ICC = .91 at T3). To test whether the at- tributes of trustworthiness combined to deter- mine overall trust, multiple regression analyses were conducted, with Overall Trust as the de- pendent variable. After controlling for research design characteristics (see below), the four at- tributes explained large amounts of variance in Overall Trust at T1 (�R2 = .57, n = 25, p < .01), T2 (�R2 = .78, n = 27, p < .01), and T3 (�R2 = .84, n = 24, p < .01). Therefore, the Ability, In- tegrity, Benevolence, and Value Congruence measures were combined to form composite trust scales, Trust T1 (α = .86), Trust T2 (α = .91), and Trust T3 (α = .92). Status Variables Single items were used to measure Mode of Takeover (ICC = .37), Power Asymmetry (ICC = .75), and Performance Differences (ICC = .87). The Mode of Takeover measure was excluded from subsequent analyses due to unreliability. Two items measured different aspects of cultural similarity, namely Shared Meanings (ICC = .69) and Management Style Similarity (ICC = .78). The ratings were inverted and combined to form a composite scale, Cultural Distance. No Cronbach’s alpha was calculated, as the two indicators represent different dimensions of the same underlying construct. Two items measured different aspects of collaboration history, namely Rela- tionship Quality (ICC = .63) and Length of Relationship (ICC = .92). Because the Rela- tionship Quality measure had to be elimi- nated due to unreliability, only one aspect of collaboration history, Length of Relationship, was included in subsequent analyses. Integration Process Variables Single items were used to measure three inte- gration process variables at different points in time, namely Integration Speed (ICC = .79 for T1–T2; ICC = .86 for T2–T3), Multiculturalism (ICC = .88 for T1–T2; ICC = .88 for T2–T3), and Communication Quality (ICC = .64 for T1–T2; ICC = .79 for T2–T3). The Communi- cation Quality measure for the time period T1–T2 had to be eliminated due to unreliabil- ity. Three items captured different aspects of autonomy removal, namely Asymmetric Op- erational Control (ICC = .84), Broken Integ- rity (ICC = .77), and Force Against Will (ICC = .90). Ratings were inverted and combined to form a new scale, Autonomy Preservation. No Cronbach’s alpha was calculated, as the three variables represent different facets of the con- struct that can vary independently of one another. Two items were used to measure per- ceived benefits, namely Reward Change (ICC = .91) and Job Security Change (ICC = .86). Ratings were combined to form a new scale, Perceived Benefits. Sociocultural Integration Outcomes Single items were used to measure the follow- ing attitudinal and behavioral outcomes: Commitment (ICC = .48 at T2; ICC = .87 at T3), Satisfaction (ICC = .75 at T2; ICC = .89 at T3), Acceptance of Change (ICC = .49 at T2; ICC = .89 at T3), Intention to Stay (ICC = .49 at T2; ICC = .81 at T3), Willingness to Coop- erate (ICC = .83 at T2; ICC = .84 at T3), Infor- mation Sharing (ICC = .78 at T2; ICC = .78 at T3), and Job Performance (ICC = .90 at T2; ICC = .90 at T3). Measures with reliabilities below .70 were excluded from further analy- ses. Because employees may enter a takeover situation with differing “baselines” of atti- tudes and behaviors, changes in attitudes and behaviors over time—rather than absolute levels—were measured by comparing preac- quisition with postacquisition levels. Postacquisition Performance Because few case studies contained detailed information on accounting-based performance improvements, only the two most commonly used measures, Sales Growth (ICC = .93 at T2; ICC = .89 at T3) and Realized Profit (ICC = .91 at T2; ICC = .92 at T3), were obtained. Using accounting measures as a proxy for realized synergies is widely considered appropriate in M&A performance research because “[t]he 588 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm realization of synergies should be reflected in accounting-based performance improve- ments” (Harrison et al., 1991, p. 181). Controls The following control variables were included to test whether research design and sample characteristics affected the results: compre- hensiveness of data collection (e.g., number of persons interviewed), use of multiple meth- ods (e.g., number of different data collection methods used), validation (whether system- atic attempts were made to validate the case study findings), length of integration period (in months), publication status (published vs. unpublished), anonymity (whether the iden- tities of the firms were disguised), and author participation (whether the author was in- volved in the coding). Interrater reliabilities for the control variables were satisfactory to excellent, with ICCs and kappas ranging from .71 to 1.00. Validity of Case Coding Using control variables helped identify pos- sible sampling biases by testing for the effects of different case sources and research designs (Larsson, 1993). The results of bivariate cor- relations show very limited and scattered ef- fects, suggesting little systematic influence of case study design characteristics. Out of 145 correlation coefficients between control vari- ables and study variables, only eight (5%) were significant. Of these, six were correla- tions with the control variable, length of in- tegration period. The almost complete lack of significant correlations with other control variables supports the validity of the codings as not being systematically biased. The par- ticipation of case authors allowed analysis of whether cases that were coded based on sec- ondary data differed systematically from cases that were coded based on the case authors’ primary data (Larsson, 1993; Lucas, 1974). None of the correlations with the author participation dummy variable were significant, suggesting very little, if any, sys- tematic differences and thereby supporting the validity of the codings. Thirteen of the 50 cases were drawn from the Larsson and Finkelstein (1999) M&A case sample, and 19 of the originally coded varia- bles were reused in this study. In Larsson and Finkelstein’s (1999) study, the validity of the case data had been tested against various external, independent data on M&A perform- ance, relatedness, combination type, integration level, and employee resistance, which all consistently supported the validity of the case data. The authors tested for any systematic differences between the codings used by Larsson and Finkelstein (1999) and those obtained in the current study and found no significant differences. The authors also tested the sensitivity of this study’s findings to including the externally validated cases by redoing the correlational analysis for the sub- sample of cases that had not been externally validated. The same correlational patterns were found with only a few minor variations in levels of significance. Thus, including the case data used by Larsson and Finkelstein (1999) added externally validated case cod- ings, which represented about 25% of the total case sample, without significantly chang- ing the results. Overall, this provides strong evidence for the validity of the case data. Results Zero-Order Correlations The means, standard deviations, and Pearson correlation coefficients of all variables are presented in Table I. As indicated by the correlation matrix, trust levels at the three measurement points were positively and sig- nificantly intercorrelated and increased over time. The difference between the beginning and the end of the integration period is sta- tistically significant (t = 2.7, n = 46, p < .01). A similar development over time can be observed for most of the sociocultural inte- gration and performance outcomes. Where measures exist for two measurement points, a positive development over time can be ob- served. Significant mean differences were found for Satisfaction (t = 2.63, n = 36, p < .05), Willingness to Cooperate (t = 4.15, n = 47, p < .01), Information Sharing (t = 2.80, n = 32, TRUST DYNAMICS IN ACQUISITIONS 589 Human Resource Management DOI:10.1002/hrm p < .01), Job Performance (t = 2.66, n = 31, p < .05), and Sales Growth (t = 2.48, n = 30, p < .05). The correlation matrix further shows that all sociocultural integration outcomes are significantly and positively intercorre- lated. This is not only the case for measure- ments at the same point in time, but also for measurements at different points of the inte- gration period. Likewise, the performance measures are positively and significantly cor- related at both measurement points. Al- though Realized Profit is significantly and positively correlated with most of the socio- cultural integration outcomes, Sales Growth shows positive but weaker and only partly significant correlations with attitudinal and behavioral outcomes. Hypotheses Tests Multiple regression analysis was used to test the relationships between the hypothesized trust antecedents and target firm member trust. Hypotheses 1–5 propose that aspects of the firms’ relationship history and interfirm distance affect target firm members’ trust in the acquiring firm’s management. As ex- plained in the Method section, variables re- lated to the firms’ relationship history required only a single measurement at T1, whereas variables related to interfirm dis- tance were measured at points T1, T2, and T3 based on the assumption that perceptions of interfirm distance may change over time. Table II shows how much variance in trust is explained by each of the predictor variables at different times of the integration period. In all regression analyses, the control variables were entered before the predictor variable of interest; the increase in variance explained by the predictor was then used as an estimate of the predictor’s relative importance in in- fluencing trust. The first variable hypothesized to affect target firm member trust, Collaboration His- tory, accounts for nonsignificant amounts of variance in trust at T1, suggesting that the length of the relationship between the firms does not influence target firm member trust at the time of the legal combination. Thus, Hypothesis 1a is not supported. Hypothesis 1b and Hypothesis 2 could not be tested due to poor interrater reliability of the Relation- ship Quality and Mode of Takeover measures. As indicated by Table II, the amount of vari- ance in trust explained by Power Asymmetry is nonsignificant at all three measurement points, and the standardized regression coef- ficients are opposite to the hypothesized di- rection. Thus, Hypothesis 3 is not supported. Performance Differences account for nonsig- nificant amounts of variance in trust at dif- ferent points of the integration period. Thus, Hypothesis 4 is not supported. Finally, the amount of variance in trust explained by Cul- tural Distance is nonsignificant at the begin- ning and the middle of the integration period, but is significant at the end of the integration period. The standardized regres- sion coefficient is in the expected direction, providing partial support for Hypothesis 5. Collectively, these results suggest that vari- ables related to the firms’ relationship history and interfirm distance are poor predictors of trust. Hypotheses 6–10 propose that several integration process variables affect target firm member trust in the acquiring firm management. Integration process variables were measured during periods T1–T2 and T2–T3, based on the assumption that these variables are dynamic and vary over time. Trust levels measured at T2 were then regressed on integration process variables measured during the first half of the inte- gration period, whereas trust levels mea- sured at T3 were regressed on variables measured during the second half of the in- tegration period. As Table II indicates, the amount of variance in trust explained by Autonomy Preservation is nonsignificant for both measurement periods. Thus, Hypothesis 6 is not supported. The amount of variance explained by Integration Speed is nonsignificant for the first half of the integration period, but is significant for the second half. The regression coefficient is in the expected direction, suggesting that a high speed of integration is associated with higher trust levels. Thus, Hypothesis 7 is partly supported. The amount of variance explained by Multiculturalism is significant 590 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm T A B L E I M ea ns , S ta nd ar d De vi at io ns , a nd C or re la tio ns n M S D 1. 2. 3. 4. 5. 6. 7. 8. 9. 10 . 11 . 12 . 13 . 14 . 15 . 16 . 1. Tr u st T 1 48 2. 59 1. 12 1. 00 2. Tr u st T 2 48 2. 78 1. 15 .4 2* * 1. 00 3. Tr u st T 3 48 3. 05 1. 17 .3 1* .8 6* * 1. 00 4. Po w er A sy m m et ry 50 3. 49 1. 23 .2 3 .1 1 .1 6 1. 00 5. Pe rf o rm an ce D iff er en ce s 42 2. 51 1. 48 � .3 3* � .2 2 � .1 5 � .1 2 1. 00 6. C u lt u ra l D is ta n ce 48 1. 49 .5 6 .0 1 � .3 5* � .3 0 � .1 4 .0 9 1. 00 7. C o lla b o ra ti o n H is to ry 44 2. 65 1. 43 � .2 2 .0 4 .1 8 � .3 6* .1 6 .1 9 1. 00 8. A u to n o m y Pr es er va ti o n 50 3. 02 1. 03 .0 9 .2 0 .1 7 � .3 8* * � .1 4 .2 0 .2 7 1. 00 9. In te g ra ti o n S p ee d ( T 1– T 2) 34 3. 18 1. 45 .1 6 .2 5 .3 0 .1 3 � .3 2 � .3 0 � .2 8 .0 6 1. 00 10 . In te g ra ti o n S p ee d ( T 2– T 3) 34 3. 43 1. 40 .1 5 .4 1* .4 1* .3 8* � .2 0 � .3 8* � .2 9 2. 16 .8 3* * 1. 00 11 . M u lt ic u lt u ra lis m ( T 1– T 2) 47 2. 96 1. 19 .2 4 .4 8* * .3 2* � .4 0* * .0 6 � .1 3 .0 9 .5 7* * .0 6 2. 09 1. 00 12 . M u lt ic u lt u ra lis m ( T 2– T 3) 47 2. 90 1. 16 .2 1 .4 2* * .4 5* * � .3 8* * � .1 7 � .1 6 .1 2 .6 6* * .2 0 2. 06 .8 3* *1 .0 0 13 . Pe rc ei ve d B en efi t s 45 2. 56 .7 1 � .0 2 .5 1* * .4 8* * � .0 7 � .1 9 � .1 6 .2 7 .3 3 2. 13 2. 12 .3 4* .3 4* 1. 00 14 . C o m m u n ic at io n Q u al it y (T 2– T 3) 44 3. 17 1. 29 .1 5 .7 3* * .8 0* * .0 6 � .2 5 � .1 3 .0 2 .3 5* .5 7* * .5 6* * .4 2* * .4 7* * .4 1* * 1. 00 15 . Jo b S at is fa ct io n T 2 37 2. 41 1. 04 .1 0 .5 0* * .5 3* * .0 3 � .3 2 � .3 0 .0 4 .2 3 .3 3 .3 0 .2 2 .2 9 .5 8* * .5 2* * 1. 00 16 . Jo b S at is fa ct io n T 3 38 2. 83 1. 19 .0 7 .5 1* * .7 9* * .2 9 � .2 6 � .3 0 .3 2 .0 8 .2 8 .3 2 .0 7 .3 1 .4 2* .6 1* * .7 6* * 1. 00 17 . C o m m it m en t T 3 48 2. 57 1. 03 .1 6 .6 9* * .8 3* * .2 6 � .2 9 � .2 8 .0 4 .1 2 .4 4* .4 1* .2 8 .4 0* * .5 5* * .7 5* * .6 6* * .8 4* * 18 . A cc ep ta n ce o f C h an g e T 3 46 3. 27 1. 31 .1 6 .6 7* * .8 7* * .2 1 � .1 2 � .2 9 .1 7 .1 2 .4 9* * .5 0* * .2 2 .3 8* .4 9* * .7 9* * .6 4* * .8 3* * 19 . In te n t to S ta y T 3 41 2. 61 1. 05 � .0 6 .5 2* * .7 4* * .1 3 � .2 8 � .2 4 .2 5 .1 7 .2 6 .3 2 .1 1 .3 0 .4 2* * .6 0* * .5 1* * .8 3* * 20 . W ill in gn es s to C oo pe ra te T 2 47 2. 63 1. 13 .0 9 .7 2* * .6 5* * .0 8 � .1 0 � .2 6 .0 6 2. 03 .4 2* .4 2* .2 4 .2 5 .5 2* * .5 6* * .5 3* * .5 5* * 21 . W ill in gn es s to C oo pe ra te T 3 47 3. 28 1. 28 � .0 1 .6 4* * .8 2* * .1 9 � .1 2 � .3 6* .1 3 .0 7 .4 3* .4 1* .2 5 .4 1* * .5 1* * .7 1* * .5 8* * .8 4* * 22 . Jo b P er fo rm an ce T 2 33 2. 68 .9 4 .1 1 .7 8* * .7 1* * .1 8 � .2 6 � .0 7 .1 7 .2 2 .4 1 .4 8* .2 2 .2 6 .6 6* * .7 4* * .7 3* * .6 5* * 23 . Jo b P er fo rm an ce T 3 32 3. 05 1. 08 .0 7 .7 3* * .8 3* * .2 9 � .1 9 � .3 1 .3 4 .1 1 .3 6 .4 2 .2 6 .3 6* .6 5* * .7 6* * .7 1* * .8 3* * 24 . In fo rm at io n S h ar in g T 2 33 2. 92 1. 36 .2 2 .7 1* * .6 6* * .2 1 � .1 9 � .2 6 .0 1 .0 0 .4 6* .4 9* .1 1 .0 6 .4 8* * .7 2* * .5 5* * .5 2* * 25 . In fo rm at io n S h ar in g T 3 32 3. 30 1. 47 .2 1 .7 6* * .7 8* * .3 0 � .2 2 � .2 7 .1 1 2. 01 .5 1* .4 6* .1 6 .2 4 .4 9* * .8 5* * .4 6* .6 7* * 26 . S al es G ro w th T 2 30 3. 22 1. 70 � .0 3 .3 4* .4 3* � .1 9 .6 4* * � .1 3 .2 5 .0 0 .4 4 .3 8 .1 9 .0 5 � .0 7 .2 3 .1 7 .2 1 27 . S al es G ro w th T 3 32 3. 59 1. 64 � .1 1 .2 9 .4 9* * .0 7 .5 4* * � .1 8 .2 4 2. 09 .2 4 .1 7 .1 5 .1 1 .0 3 .1 6 .1 8 .4 7* 28 . R ea liz ed P ro fi t T 2 31 2. 95 1. 53 .1 7 .7 2* * .7 7* * .1 0 � .0 3 � .4 4* .1 5 .1 6 .6 9* * .6 7* * .1 3 .2 3 .3 9* .5 9* * .5 4* * .6 5* * 29 . R ea liz ed P ro fi t T 3 31 3. 15 1. 59 .1 1 .5 3* * .7 0* * .2 8 � .0 9 � .4 1* .2 2 .0 5 .3 8 .3 8 .0 7 .2 4 .4 9* * .4 6* .5 8* * .8 1* * TRUST DYNAMICS IN ACQUISITIONS 591 Human Resource Management DOI:10.1002/hrm T A B L E I M ea ns , S ta nd ar d De vi at io ns , a nd C or re la tio ns (C on tin ue d) 17 . 18 . 19 . 20 . 21 . 22 . 23 . 24 . 25 . 26 . 27 . 28 . 29 . 15 . Jo b S at is fa ct io n T 2 16 . Jo b S at is fa ct io n T 3 17 . C o m m it m en t T 3 1. 00 18 . A cc ep ta n ce o f C h an g e T 3 .9 0* * 1. 00 19 . In te n t to S ta y T 3 .8 3* * .8 1* * 1. 00 20 . W ill in gn es s to C oo pe ra te T 2 .5 7* * .6 1* * .4 9* * 1. 00 21 . W ill in gn es s to C oo pe ra te T 3 .8 8* * .9 2* * .7 9* * .6 1* * 1. 00 22 . Jo b P er fo rm an ce T 2 .6 5* * .6 8* * .5 5* * .8 0* * .5 8* * 1. 00 23 . Jo b P er fo rm an ce T 3 .8 6* * .8 5* * .7 6* * .6 9* * .8 5* * .8 4* * 1. 00 24 . In fo rm at io n S h ar in g T 2 .7 4* * .6 8* * .5 1* * .7 7* * .6 8* * .7 0* * .6 9* * 1. 00 25 . In fo rm at io n S h ar in g T 3 .8 0* * .8 5* * .6 3* * .7 3* * .7 6* * .6 7* * .7 8* * .9 0* * 1. 00 26 . S al es G ro w th T 2 .2 2 .4 3* .2 5 .4 1* .3 3 .2 0 .2 2 .1 9 .1 9 1. 00 27 . S al es G ro w th T 3 .4 2* .5 4* * .4 7* .3 8* .5 3* * .2 1 .4 4* .2 2 .3 3 .8 7* * 1. 00 28 . R ea liz ed P ro fi t T 2 .6 5* * .7 5* * .5 2* * .7 2* * .6 4* * .6 8* * .6 7* * .7 2* * .6 9* * .4 7* .5 3* * 1. 00 29 . R ea liz ed P ro fi t T 3 .7 4* * .7 9* * .7 1* * .6 6* * .8 0* * .6 5* * .7 9* * .6 8* * .7 1* * .3 2 .6 0* * .8 0* * 1. 00 *p < .0 5. * *p < .0 1. 592 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm for both measurement periods and the regression coefficients are in the predicted direction, suggesting that acquirer multi- culturalism is positively associated with target firm member trust. Perceived Benefits in terms of positive rewards and job secu- rity changes account for a significant amount of variance in trust at both meas- urement points. The regression coefficients are in the predicted direction, supporting Hypothesis 9. Finally, the amount of vari- ance in trust explained by Communication Quality is significant, suggesting that high- quality communication by the acquirer is positively associated with target firm mem- ber trust. Hypothesis 10 could only be tested for the second half of the integration period due to poor reliability of the Com- munication Quality measure for the first half of the integration period. These find- ings indicate that the way in which an ac- quirer approaches the integration process affects target firm members’ perceptions of the acquiring managers’ trustworthiness, and ultimately their level of trust in the acquiring firm. Hypotheses 11 and 12 propose that target firm member trust will affect a variety of attitudinal, behavioral, and performance out- comes. Table III shows how much of the vari- ance in each outcome variable is explained by trust levels at different points of the inte- gration period after controls are entered. So- ciocultural integration outcomes were regressed on trust levels measured at the same point in time, based on the assumption T A B L E I I Results of Regression Analyses of Trust on Antecedent Variablesa Antecedents Trust T1 Trust T2 Trust T3 Relationship History Collaboration History � �R2 (n) �.03 .00 (40) n.d. n.d. Interfi rm Distance Power Asymmetry � �R2 (n) .17 .03 (43) .02 .00 (48) .12 .02 (48) Performance Differences � �R2 (n) �.25 .06 (37) �.09 .01 (41) �.07 .00 (41) Cultural Distance � �R2 (n) .03 .00 (42) �.27 .07 (47) �.30 .09* (47) Integration Process Autonomy Preservation � �R2 (n) n.d. .02 .00 (46) .12 .01 (48) Integration Speed � �R2 (n) n.d. .18 .03 (32) .39 .16* (32) Multiculturalism � �R2 (n) n.d. .47 .22** (45) .36 .11* (45) Perceived Benefi ts � �R2 (n) n.d. .39 .14** (42) .39 .13** (43) Communication Quality � �R2 (n) n.d. / .79 .55*** (43) Notes: �R2 = increment in R2 after controlling for case study design and sample characteristics; n.d. = not defi ned for this measurement point; / = could not be tested due to poor interrater reliability of measure. a Estimates are standardized regression coeffi cients. *p < .05. **p TRUST DYNAMICS IN ACQUISITIONS 593 Human Resource Management DOI:10.1002/hrm that trust (or lack of trust) will affect attitudi- nal and behavioral outcomes instantly. Per- formance measures were regressed on trust levels measured earlier in the integration pe- riod (e.g., Sales Growth between T2 to T3 was regressed on Trust at T2), based on the as- sumption that a time lag exists between trust- inducing (or reducing) events, such as public statements by top management, and possible effects on the postacquisition performance. Table III indicates that trust, measured around the middle and at the end of the integration period, accounts for a significant amount of variance in all of the sociocultural integra- tion outcomes. Specifically, this study found that trust is a significant predictor of target firm members’ Job Satisfaction, Willingness to Cooperate, Job Performance, and Informa- tion Sharing around the middle of the inte- gration period, as well as their Job Satisfaction, Commitment, Acceptance of Change, Intent to Stay, Willingness to Cooperate, and Information Sharing measured at the end of the integration period. Thus, Hypothesis 11 is supported. The case survey findings further reveal that trust does not seem to affect Sales Growth at either measurement point, but is positively associated with Realized Profits at later stages of the postacquisition integration period. Thus, Hypothesis 12 is partly supported. Collectively, these find- ings suggest that trust is more closely associ- ated with sociocultural integration outcomes than with accounting-based performance improvements. Discussion Despite a large body of anecdotal evidence supporting the critical role of trust in M&A, little is known about the factors that influ- ence how trust develops in acquired organi- zations and the effects of that trust on postacquisition integration outcomes and performance. This study set out to develop a model that synthesizes current understand- ing of the factors that influence the postac- quisition integration process, with target firm member trust in the acquiring firm’s management as a key variable. The model was tested using the case survey method. This study found that although aspects of the firms’ relationship history and interfirm dis- tance were poor predictors of trust, integra- tion process variables such as acquirer multiculturalism, quality of communication, and perceived employee benefits seem to be major factors influencing target firm member trust. Given that trust requires a willingness T A B L E I I I Results of Regression Analyses of Integration Outcomes on Trusta Jo b S at is fa ct io n C o m m it m en t A cc ep ta n ce o f C h an ge In te n t t o S ta y W ill in g n es s to C o o p er at e Jo b P er fo rm - an ce In fo rm at io n S h ar in g S al es G ro w th R ea liz ed P ro fi t Trust T1 � �R2 (n) n.d. n.d. n.d. n.d. n.d. n.d. n.d. �.03 .00 (29) .09 .01 (31) Trust T2 � �R2 (n) .49 .24** (37) / / / .75 .54*** (42) .69 .32** (27) .65 .31** (32) .29 .08 (31) .46 .18* (31) Trust T3 � �R2 (n) .79 .63*** (38) .83 .69*** (46) .85 .62** (44) .74 .55*** (39) .82 .68*** (45) .74 .48*** (31) .73 .50*** (31) n.d. n.d. Notes: �R2 = increment in R2 after controlling for case study design and sample characteristics; n.d. = not defi ned for this measurement point; / = could not be tested due to poor interrater reliability of measure. a Estimates are standardized regression coeffi cients. *p < .05. **p 594 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm to be vulnerable and to engage in behaviors that put one at risk (Mayer et al., 1995), it is understandable that target firm member trust is more closely associated with the acquirer’s integration approach than it is with aspects of the premerger situation. Integration-re- lated factors such as the acquirer’s tolerance for diversity and the quality of the postacquisition re- ward changes not only have a major impact on acquired person- nel’s lives and careers, but they also reveal much about the ac- quiring executives’ competence, integrity, value congruence, and concern—and thus their trustwor- thiness. Although trust has been found to be a significant predic- tor of employee attitudes and behaviors in various organiza- tional settings, empirical evidence for the impact of trust on firm performance is mixed (see Dirks & Ferrin, 2001, 2002 for meta- analyses of organizational trust research). The case survey find- ings suggest that in acquisitions, trust not only has a powerful effect on target firm members’ attitudes and behaviors, but it may also contribute to realizing synergies. This is consistent with research on postmerger integra- tion that has suggested that aspects of the sociocultural integration process, such as the acquirer’s ability to build an atmosphere of mutual respect and trust, facilitate the transfer of capabilities, resource sharing, and learning; and con- versely, sociocultural and human resource problems can undermine the realization of projected synergies (e.g., Birkinshaw et al., 2000; Larsson & Finkelstein, 1999; Stahl & Voigt, 2008). Collectively, the findings sup- port a “process perspective” on acquisitions (Haspeslagh & Jemison, 1991), which holds that the extent to which synergies are real- ized depends largely on the ability of the acquirer to manage the integration process effectively. Future research—and manage- ment practice as well—would benefit from examining more closely how aspects of the sociocultural integration process, such as shared identity and trust, affect the perfor- mance of firms involved in M&A. Implications for Managers From a management practice perspective, this study suggests that trust problems are probably better addressed by carefully plan- ning and managing the integration process than by incorporating trust considerations in selecting and conducting due diligence of targets. The acquiring firm’s executives can take several actions to build trust and secure commitment from acquired employ- ees. In particular, attempting to speed up the integration process, resisting the temp- tation to impose one’s culture on the target firm, improving the quality of communica- tion, and offering proper incentives are likely to generate more positive trust dynamics and thereby contribute to better sociocultural integration outcomes. In terms of perceived benefits, HR policies and practices that are perceived as transparent and fair, financial incentives to employees who ought to be retained, and adequate support of those who are negatively affected by the takeover can go a long way toward building trust and securing commitment from acquired employees. Although this may sound straightforward, there are often practical constraints, such as delays, physi- cal distance, psychological “we versus them” defenses, and economic consider- ations that limit these recommendations when it comes to implementing them. Given that these suggestions for improving trust largely coincide with the advice given in the HR-oriented literature on M&A (e.g., Chaudhuri, 2005; Larsson, Brousseau, Driver & Sweet, 2004; Pucik et al., 2010; Schuler, Jackson, & Luo, 2004; Stahl et al., 2004), however, this study provides one more good reason to try even harder to overcome these practical constraints to avoid generating circles of distrust and negative sociocultural outcomes. In particular, attempting to speed up the integration process, resisting the temptation to impose one’s culture on the target firm, improving the quality of communication, and offering proper incentives are likely to generate more positive trust dynamics and thereby contribute to better sociocultural integration outcomes. TRUST DYNAMICS IN ACQUISITIONS 595 Human Resource Management DOI:10.1002/hrm Limitations and Future Research The case survey findings presented in this article provide some new insights into the trust dynamics in acquired organizations. Several possible limitations, however, need to be discussed in addition to avenues for future research. Perhaps the most critical question relates to the validity of the case survey methodology. Following Bullock and Tubbs (1987), we used a variety of case sources and search strategies to reduce pos- sible sample biases. We also tested for pos- sible sampling biases due to different case sources and study designs using several con- trol variables and found no systematic dif- ferences. A key component of the validity analysis was our participation in the cases, which allowed us to test whether case cod- ings made based on the available case mate- rial were comparable to those made based on primary data. This study also contrasted the case survey findings with those of a sub- sample of cases, which Larsson and Finkel- stein (1999) had validated using primary and archival data independent of the case studies. All these analyses consistently sup- ported the validity of the findings. Possible concerns can also be raised re- garding the external validity of the findings. The case sample is small by traditional sur- vey standards, and it was not drawn ran- domly from the overall M&A population. This suggests the need to interpret the case survey findings cautiously. Nevertheless, it is the variety of case sources, designs, and or- ganizations studied that provide much of the strength of the case survey method in terms of the generalizability of results, which goes beyond that of single qualitative case studies or smaller multicase studies. The fact that the case sample consisted of 50 case studies, conducted by different researchers with dif- ferent research approaches and designs, made this study a stronger test than would have been possible had the authors conducted several in-depth case studies. Future M&A research using this methodology should try to increase the number of M&A cases in- cluded to allow comparisons across indus- tries, nations, and other contexts. The model presented in this article treats the main party affected by an acquisition—the members of the target firm—as a single, ho- mogeneous entity. It thus implicitly assumes that different groups within the target firm will respond the same to an acquisition. Indi- viduals may vary in their responses to a takeover, however, depending on their personalities, experiences, and roles in the organization (e.g., Buono & Bowditch, 1989; Ham- brick & Cannella, 1993; Larsson et al., 2004; Marks & Mirvis, 1998). For example, the impact of some of the antecedent variables on trust may depend on the hierarchical level in the organization (i.e., whether senior executives, middle managers, or rank-and-file employ- ees are affected). Hostile takeover tactics and removing autonomy, for instance, are likely to affect ac- quired top managers more strongly than lower-level employees (Stahl & Sitkin, 2005). Although the potential mod- erating effects of individual difference vari- ables are beyond the scope of this study, the authors believe that the role of individual- level moderators is critical to understanding the trust dynamics in M&A more fully. Finally, the temporal dimension of trust warrants more attention. Prior research on organizational trust suggests that trust changes over time, developing, deteriorating, and sometimes resurfacing in long-standing relationships (Das & Teng, 1998; Lewicki et al., 2006; Rousseau et al., 1998). A more complete understanding of trust dynamics in acquisitions would come from considering how trust is built incrementally and sustained over time. In the present study, we have tried to capture some of this complexity by using multiple measure ment points, thereby allow- ing this study to assess the evolution of trust over time. The case survey design, however, does not allow this study to draw confident conclusions about the pattern of changes over time and the causal direction of the re- lationships examined. Although a case can be made that for some of the relationships (e.g., between premerger factors and target firm A more complete understanding of trust dynamics in acquisitions would come from considering how trust is built incrementally and sustained over time. 596 HUMAN RESOURCE MANAGEMENT, SEPTEMBER–OCTOBER 2011 Human Resource Management DOI:10.1002/hrm GÜNTER K. STAHL is a professor of International Management at WU Vienna, Austria, and adjunct professor of Organizational Behavior at INSEAD, France and Singapore. His research and teaching interests are inter disciplinary in nature and lie at various points of intersection among strategy, organizational behavior, and human resource manage- ment. His special areas of interest include the sociocultural processes in teams, alliances, mergers and acquisitions, and how to manage people and culture effectively in those contexts. RIKARD LARSSON is a professor of strategic change at the Department of Business Ad- ministration, School of Economics and Management, Lund University, and co-founding partner of Decision Dynamics AB in Europe. He received a PhD from University of South- ern California and a DBA from Lund University. He has published on mergers and ac- quisitions, alliances, interorganizational learning, career development, HRM, leadership, and research methodology in leading academic journals, and consulted to organizations such as ABB, Ericsson, European Investment Bank, IKEA, Korn/Ferry International, Swed- ish Armed Forces, Tetra Pak, Unilever, and Volvo. INA KREMERSHOF studied psychology in Giessen, Germany and Aberdeen, UK. She started her professional career in human resources in the fi nancial and commerce sector with focus on HR development and personnel selection. She then decided to gain work experience in the fi eld of clinical psychology and behavior therapy and is currently work- ing with people with borderline personality disorder in a psychiatric clinic in Osnabrück, Germany. SIM B. SITKIN is a professor of management and faculty director of the Fuqua/Coach K Center on Leadership and Ethics at Duke University. His current research, teaching, and consulting focus on the effect of formal and informal organizational control systems and leadership on risk taking, accountability, trust, learning, change, and innovation. Sim is the founding editor of Behavioral Science and Policy and a fellow of the Academy of Management. His previous service has included the Academy of Management Board of Governors, Organization Science senior editor, and associate editor of Journal of Organi- zational Behavior. His most recent book is Organizational Control (with Laura Cardinal and Katinka Bijlsma-Frankema). member trust) the causal link is unidirec- tional, it seems likely that the causal relation- ships between integration process variables and trust are bidirectional and dynamic over time. For example, it is possible that increas- ing trust would feed back so that with grow- ing trust among the target and acquiring firm members, one would see increasing commu- nication quality, speedier integration, and so on. Longitudinal studies are needed to test the causal relationships proposed in this study and to capture the dynamics of trust over time. Conclusion The case survey findings we present confirm what most managers and employees involved in M&A intuitively understand, namely that trust matters. In this article we extend existing research on the sociocultural dynamics of M&A by showing when trust matters in M&A, how it matters, and what can be done to develop trust. In particular, our findings point to the impor- tant role of the acquiring firm’s integration ap- proach in building trust and contributing to the success of the postacquisition integration. TRUST DYNAMICS IN ACQUISITIONS 597 Human Resource Management DOI:10.1002/hrm References Angwin, D. (2004). 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Nickel of Canada/ ESB Ravenscraft & Scherer, 1987 20 Research Book Canada USA 1974 Kone Cranes/ GH Carruthers Risberg, 2001 22 Journal Finland GB (Scotl.) 1989 Kone Cranes/ Wisbech R. Risberg, 2001 22 Journal Finland Norway 1973 Microsoft/Vermeer Nanda & Lev- enson, 1997 22 Harvard Case USA USA 1996 Mutual/Colony Arnold, 1983 2 Journal /b /b Unknown 1 Sco/ 1Jco Bastien, 1987 3 Journal USA USA Unknown Kone Cranes/ GH Carruthers Risberg, 2001 22 Journal Finland GB (Scotl.) 1989 Kone Cranes/ Wisbech R. Risberg, 2001 22 Journal Finland Norway 1973 Microsoft/Vermeer Nanda & Lev- enson, 1997 22 Harvard Case USA USA 1996 Mutual/Colony Arnold, 1983 2 Journal /b /b Unknown 1 Sco/1Jco Bastien, 1987 3 Journal USA USA Unknown Service Conglomer./ Quality Guarding Hubbard, 1999 19 Research Book GB GB Unknown SKF/ Prototyp Larsson, Petersson & Krauss, 1994 53 Unpublished Sweden Germany 1986 TRUST DYNAMICS IN ACQUISITIONS 603 Human Resource Management DOI:10.1002/hrm A P P E N D I X Case Survey Sample (Continued) Case Title Primary Reference Number of Pages Publication Status HQ Country Acq:er HQ Country Acq:ed Combination Year SKF/ATB Larsson, Petersson & Krauss, 1994 49 Unpublished Sweden Nether- lands 1988 SKF/Jacob Larsson, Petersson & Krauss., 1994 1 Unpublished Sweden Switzerland 1987 Suburban/ Town Hospital La Farge et al., 2003 19 Research Book USA USA 1991 TeleCable G./ Infosys Hubbard, 1999 16 Research Book GB GB Unknown Texaco/Getty Oil Altendorf, 1986 214 Dissertation USA USA 1984 Toyo Ink/Francolor De Meyer & Probert, 1998 21 INSEAD Case Japan France 1993 Trans Co/Coop Foods Buono & Bowditch, 1987 21 Research Book USA USA 1987 Transway/Sero/ Intertrans Blake & Mou- ton, 1985 16 Journal USA GB 1982 Trucking A/ Trucking B Larsson, 1990 6 Doctoral Dissertation Sweden Sweden 1983 United Bank/ Community Bank Napier, 1989 18 Journal USA USA 1984 a Additional references were used (available from authors by request). b No country information provided.