32 Trust and Member Satisfaction in a Developing Virtual Organization: the Roles of Leader Contact and Experience with Technology International Journal of Social and Organizational Dynamics in It Copyright

A merger is the result of a strategic decision aimed at creating synergy. Notwithstanding mergers’ expected benefits, their outcomes are often beset by problems such as employees’ high levels of stress, dissatisfaction and resistance. Research suggests that these problems are often related to the issue of boundary management during the post-merger integration phase (PMI), which refers to the degree of integration required among the merging parties and the degree of autonomy, that each must retain for the merger to achieve synergy. The literature identifies information systems (IS) as being a key enabler of successful mergers and suggests that during PMI, new ISs that span the boundaries of the previously independent firms need to be implemented to facilitate a specific level of integration. Yet, there is a paucity of studies on the issue of boundary management at the information technology (IT) level during PMI. Adopting a sociomaterial perspective and based on a qualitative study within a healthcare organization, the authors find that post-merger practices were the result of dialectic processes of resistance to, and negotiation of, the IS reconfiguration after its implementation. DOI: 10.4018/ijsodit.2013010104 48 International Journal of Social and Organizational Dynamics in IT, 3(1), 47-60, January-March 2013 Copyright © 2013, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. certain tangible and intangible resources of one or more of the merging entities (Karim & Mitchell 2000). The literature stresses the importance of the choice of integration approach as being one of the most important strategic decisions to make in mergers and represents a critical determinant of the post-merger outcomes (Pablo, 1994; Zollo & Singh, 2004). Different PMI approaches exist, which differ with respect to the extent of integration and autonomy among the merging parties (Ellis, 2004). Although a given type of PMI approach may be well suited to achieve synergy, it may also entail problems within the merging organizations, such as high levels of employee stress, job dissatisfaction, and resistance to the merger among employees (Larsson & Finkelstein, 1999). Research on PMI reveals that when organizations try to manage differences among the merging parties, they face the dilemma of integration versus autonomy (Haspeslagh & Jemison, 1991). A number of researchers have addressed this dilemma by proposing four ideal-types of integration approaches based on strategic and organizational dimensions (Ellis, 2004). Preservation is deemed appropriate when there is a strategic need to maintain the sources of expected value-creation intact by preserving the boundary between the organizations. Absorption occurs when one of the firms imposes its work practices, norms and culture on the other parties. Symbiosis represents the approach in which the merging parties are gradually blended together by becoming increasingly interdependent. In transformation organizations are integrated by developing totally new, yet common, practices, culture and other organizational attributes (Marks & Mirvis, 2001). The literature suggests that information technology (IT) is a key enabler of successful mergers (Henningsson & Yetton, 2011). A recent study suggests that 50-60% of the expected value from a merger is dependent on post-merger IT function integration especially the IT applications and data (Sarrazin & West, 2011). The integration of IT applications and data often involves the implementation of new ISs to span the boundaries of the previously independent organizations (Henningsson & Yetton, 2011). The main purpose of these systems is to facilitate the implementation of new organizational practices. Modern large organizations usually choose to implement off-the-shelf software applications such as Enterprise Systems (ES) (Wagner, Newell, & Piccoli, 2010). However, misalignments between industry-standard practices or “best practices” embedded in these ISs and the local idiosyncratic practices have caused headaches to management and IT implementation project teams (Sia & Soh, 2007). Organizations often realize that practice norms embedded in their ES are mismatched only after the system is implemented and users engage in resistance to adopt the system, as they can no longer perform their old practices. This constrains some organizations to engage into a lengthy processes of negotiation and may result in substantial customizations of the system (Wagner, Moll, & Newell, 2011). The practitioner literature on PMI suggests that when significant post-merger IS-assisted changes in practices are intended, it is more difficult for users to adopt the new ISs, which makes the integration task most challenging. For example, when Nokia merged with Siemens in 2007, the upper management realized that reaching postmerger synergies relies on the implementation of a common set of IT applications (Accenture, 2011). The new ISs needed to sustain a new set of practices based on one common backbone and one value chain system. At the outset of the merger the two organizations were using nonstandard systems. Facing significant changes in practices, organizational members built up resistance at the beginning of the PMI phase. The management was able to successfully implement the new ISs only after employees were encouraged to take initiatives during the PMI process. While Nokia-Siemens merger was successful, some firms, fearing great cost and complexity, never integrate their ISs, such that the actual synergy gain is minimal. Others focus on the potential synergy gains and, without much planning, implement an absorption approach by choosing one information system International Journal of Social and Organizational Dynamics in IT, 3(1), 47-60, January-March 2013 49 Copyright © 2013, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. over another, often frustrating both customers and employees (Aberg & Sias, 2004). Although these reports bring to the fore the challenges of implementing ISs in a PMI context, the academic IS literature on PMI does not mention the existence of a dilemma of integration versus autonomy at the IT level. Instead, research focuses on identifying strategies for aligning the post-merger IT resources with the business needs (Giacomazzi, Panella, Pernici, & Sansoni, 1997; Johnston & Yetton, 1996; Tanriverdi & Uysal, 2011). Our study seeks to provide an in-depth examination of the relationship between the dilemma of IS integration versus autonomy and the ES adoption in PMI settings. Therefore, our two research questions are: 1. Is there a dilemma of IS integration versus autonomy in PMI settings? 2. How do post-merger practices emerge after the ES implementation? To achieve this goal, we adopt a sociomaterial perspective (Orlikowski & Scott, 2008b) to illuminate the outcomes of an ES implementation project in a healthcare organization resulting from the merger of three previously independent hospitals by investigating the practices that this ES was supposed to facilitate after its implementation. THEORETICAL BACKGROUND Post-Merger Dilemma of Integration versus Autonomy Researchers have addressed the issue of boundary management in PMI by proposing integration approaches based on the extent of change in the merging parties’ business processes and structures (Haspeslagh & Jemison, 1991; Marks & Mirvis, 2001). While most of the extant empirical studies on the PMI phase provide interesting insights into post-merger success factors, they tend to offer “either/or” solutions: that is, for one given pre-merger type of combination, there is only one type of integration approach (Ellis, 2004). However, other researchers have observed that in some mergers, the combined organization adopts a mix of different ideal-types of integration approaches, called a hybrid approach (Ranft & Lord, 2002; Schweizer, 2005). For instance, in a study of a merger between a pharmaceutical firm and a biotechnology firm, (Schweizer, 2005) found that the merging organizations chose to apply different integration approaches to some of their business processes. The author identifies two different approaches (preservation and absorption), implemented at different paces (slow and fast) but simultaneously, to integrate competencies from both merging companies in order to accomplish the shortand long-term motives for the merger. On one hand, the general biotech non-R&D knowledge and business processes were rapidly absorbed by the pharmaceutical firm in order to strengthen its market position. On the other hand, decisionmakers realized that in order to keep its value for the merger, specific biotech R&D knowledge needs to retain its contextuality; therefore, total organizational autonomy for the biotech R&D department was granted. This line of research emphasizes the fact that PMI is a complex and delicate process that cannot be fully understood by considering single integration approaches in isolation. These studies promote two main ideas. The first is that the issue of boundary management should be dealt with by simultaneously providing different multi-level integration approaches that will ensure a certain degree of organizational autonomy for some business units, yet provide an environment that enables the sharing of work practices and knowledge with other business units, if required (Ranft & Lord, 2002). The second is that the boundaries to be managed should be defined not only in terms of the differences between organizational structures, but also in terms of the differences in information systems (Yoo, Lyytinen, & Heo, 50 International Journal of Social and Organizational Dynamics in IT, 3(1), 47-60, January-March 2013 Copyright © 2013, IGI Global. Copying or distributing in print or electronic forms without written permission of IGI Global is prohibited. 2007) or work practices (Ranft & Lord, 2002;