Allocation processes in mergers and acquisitions: An organizational justice perspective

This paper contributes to the understanding of allocation processes in merg ers and acquisitions by applying an organizational justice perspective. Thi s is a perspective that has been neglected in past research on mergers and acquisitions, but which is important in understanding the challenges manage rs face in allocating human resources and other resources of symbolic impor tance. In particular, the paper examines the trade-offs between multiple go als in selecting distributive and procedural justice rules and identifies f actors that constrain these choices. Mergers and acquisitions are typically driven by multiple motives, The findings presented in this paper suggest t hat there are different approaches to applying justice rules in mergers and acquisitions and that these approaches have different implications for mee ting multiple goals. The choice of equity in combinations with fair procedu ral rules is an approach which complies with the two goals of maximizing ec onomic productivity and fostering relationships. However, the choice of thi s approach rests upon an unbalanced power relationship and relatively low a mbiguity. When there is a high degree of ambiguity and a balanced power rel ationship, management has to make trade-offs between maximizing economic pr oductivity and fostering relationships.