In the case we were looking at, as the acquisition proceeded, differences gradually appeared between the two companies involved. However, no one wanted to disrupt the original enthusiasm and highly positive attitude.
Issues that should have come to light
The acquirer demanded the smaller company (which was engaged in CRM business) start cold-calling potential clients, something the company had not been doing previously. Managers adopted this technique even though they disliked it. They were worried that if they refused, the relationship would be broken. For the same reason managers of the acquirer didn’t mention how frustrated they were with the slow pace of the integration process.
After some time, there was growing dissatisfaction in both companies. Nevertheless, managers on both sides were assuming their counterpart thought everything was OK as it was.
Negative emotions lead to negative sentiments
In reality, any impression of the other party’s satisfaction was a mere illusion which was preventing timely corrective actions. Both companies also perceived different matters with different degrees of urgency. For example, slow response times of servers made the IT team of one company furious, while the other IT team considered this no big deal.
Negative emotions gradually grew into negative sentiments and the companies began to see each other as being incapable of doing business. As a result, they started to treat colleagues from the other company badly. Controls were tightened, trust undermined and disputes arose. Finally, several years later, the acquirer decided to divest. This cautionary tale is from an article on the INSEAD business school website.
Part of the problem was also that people preferred sending e-mails rather than meeting face-to-face. The messages filtered out emotions which remained hidden and therefore were not dealt with. In other words, the true level of dissatisfaction on both sides could not be made clear.
-jk-