Ethical Aspects in Nordic Business Mergers: The Case of Electro-Business

Abstract

Postmerger integration is a highly challenging and demanding task. Its success depends not only on economic factors but also on the organisational members' feelings and their personal contribution to the new entity. Mergers are usually made for the sake of profitability in the first place, whereas less attention is paid to employees in such situations. This article describes various ethical observations made in our study on corporate mergers in the Nordic Electro-business industry. We examine how the organisational change was experienced by personnel, what kinds of ethical reflections surfaced in different phases of the process, and what conclusions might be drawn from them. The main focus is on the ethical meanings that emerged in our interviewees' stories spontaneously, without the topic of ethics having been separately brought up in the interview situation. The organisational members: we interviewed 35 electro-business employees who were either transferred from Vattenfall's contracting unit to the acquiring company or were already working there at the time of the merger. These persons were interviewed twice: first in 2001, the year of the initial merger, and again in 2005, 4 years from the start of the process and 1 year from the final ownership change. The merger process seemed to lead to decreased responsibility among the organisational members, which highlights the discrepancy between genuine ethical thinking and executive talk. Our study also revealed a dramatic shift in the moral attitudes of the managers who fell from power in the turmoil of organisational change. This moral dimension is evident in their sharply critical argumentation against the new operating model and new corporate management, as well as in their eventual indifference and non-commitment to the organisation. The ethical meanings of 'the good life' and a happy work community slowly disintegrated and were replaced by a longing for the earlier communality and sense of togetherness in their old organisation. This meant that 'the good life' would have to be sought elsewhere.