Mergers of Equals & Unequals

We examine the organizational dynamics of integration post merger. Our basic question is whether <p> there is evidence of conflict between employees from the two merging firms. Such conflict can arise <p> for several reasons, including firm-specific human capital, corporate culture, power, or favoritism. <p> We examine this issue using a sample of Danish mergers. The results are consistent with the basic <p> hypothesis. Controlling for other effects, employees from the acquirer fare better than employees <p> from the acquired firm, suggesting that they have greater power in the newly merged hierarchy. As <p> a separate effect, the more that either firm dominates the other in terms of number of employees, <p> the better do its employees fare compared to employees from the other firm. This suggests that majority <p> / minority status is also important to assimilation of workers, much as in ethnic conflicts. Finally, <p> greater overlap of operations decreases turnover. This finding is inconsistent with the view <p> that workers of the two firms may be better substitutes for each other. However, the result and our <p> other findings are consistent with the view that more similar workers (in terms of either firm- or <p> industry-specific human capital) are easier to integrate post merger