GIVING SENSE TO AND MAKING SENSE OF JUSTICE INPOSTMERGER INTEGRATION

PHILIPPE MONINEMLYON Business School

NIELS NOORDERHAVENTilburg University

EERO VAARAHanken School of Economics and EMLYON Business School

DAVID KROONVU University Amsterdam

The objective of this article is to elucidate how justice in general and distributivejustice in particular are given sense to and made sense of in postmerger integration.Drawing on a longitudinal real-time analysis of a recent merger, we identify a patternin which focus moved from equality to equity to less emphasis on distributive justice.To understand the dynamics involved, we develop a process model that explains howactors reconcile pressures of value creation and sociopolitical concerns in dialogical“sensegiving” and “sensemaking” processes that lead to the enactment of specificnorms of justice. This analysis adds to research on mergers and acquisitions byfacilitating understanding of the crucial role that norms of justice play in postmergerintegration, of the way in which they change over time as integration processes unfold,and of the intergroup dynamics through which these norms of justice are enacted. Byuncovering the microdynamics of dialogical sensegiving and sensemaking processes,we also contribute to research on organizational justice, sensemaking, and processstudies.

Organizational justice plays a central role inmergers and acquisitions (M&As). This is espe-cially the case with postmerger integration, whichinvolves changes that are often difficult to under-stand or accept in their own right (Clark, Gioia,Ketchen, & Thomas, 2010; Graebner, 2004; Maguire& Phillips, 2008). Legitimating organizationalchanges requires a sense of justice (Ellis, Reus, &Lamont, 2009; Meyer, 2001). Perceptions of organ-izational justice help people to accept the plannedchanges and their implications, whereas percep-tions of injustice exacerbate organizational prob-lems (Meyer & Altenborg, 2007; Zaheer, Scho-maker, & Genc, 2003). Although justice is a centraltenet in all kinds of postmerger integration pro-

cesses, it is especially so in “symbiotic” mergersinvolving expectations of reciprocity and equaltreatment rather than dominance by either party(Haspeslagh & Jemison, 1991; Zaheer et al., 2003).

In this article, we argue that, in addition to un-derstanding perceptions of justice per se, under-standing of their temporal dynamics is needed. Inparticular, clarity is needed about how “sensemak-ing” about justice affects the course of postmergerintegration. For instance, in a move that was an-nounced as a merger of equals, Daimler-Benz ac-quired Chrysler Corporation in 1998. However, al-most immediately after the acquisition, Chryslerdirectors were sidelined or replaced until the boardwas practically all-German. In a later interview,CEO Jürgen Schrempp claimed that this had beenhis intention from the outset, but, like a chessplayer, he did not always reveal his next moves(Vlasic & Stertz, 2000: 371). The result of this du-plicity was disastrous: “Careers were derailed, pro-motions were denied, reputations sullied, andthere was hometown humiliation and public deri-sion” (Badrtalei & Bates, 2007: 311, quoting fromAutomotive News).

We are greatly indebted to special issue guest editorAnn Langley for her extraordinarily constructive guid-ance in our paper’s revision process. We also thank TessaMelkonian, Audrey Rouzies, Guillaume Soenen, and AlmaTimmers for their role in the data collection process; Pikka-Maaria Laine, Saku Mantere, and Henri Schildt for givingcritical comments on various earlier versions of the article;and David Miller for language editing.

� Academy of Management Journal2013, Vol. 56, No. 1, 256–284.http://dx.doi.org/10.5465/amj.2010.0727

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To better understand these organizational dy-namics, we aim to elucidate how justice is givensense to and made sense of in unfolding postmergerintegration processes. Our intention is not merelyto examine the antecedents or consequences of in-dividuals’ perceptions of (in)justice, but also to ex-plain how the very norms of justice that definewhat is fair and appropriate are socially con-structed and managed. These norms can be seen asfundamental “rules of the game” that impact thecourse of postmerger integration processes.

Norms of justice include several aspects: a dis-tributive aspect (relating to fair distribution of re-sources, roles, and responsibilities), a proceduralaspect (fairness in decision making), an informa-tional aspect (justification of decisions), and aninterpersonal aspect (fairness in interpersonal rela-tionships) (Colquitt, Conlon, Wesson, Porter, & Ng,2001; Luo, 2007). All of these aspects are relevantin M&As, and they are usually closely related (Ci-tera & Rentsch, 1993; Ellis et al., 2009). However, insymbiotic mergers, issues related to the distribu-tion of resources, roles, and responsibilities as wellas rationalizations and cutbacks are at the forefront,and there are expectations of concrete and sym-bolic fairness as to how the merger parties aretreated in the context of such issues (Meyer, 2001;Zaheer et al., 2003). This involves distributivenorms—or allocation rules (Deutsch, 1985; Ka-banoff, 1991)—such as equality (equal treatment ofthe merger parties in integration decisions) andequity (focus on what is fair in view of the parties’contributions), which may be interpreted in differ-ent ways in the course of postmerger integration.Thus, distributive justice has an accentuated role insymbiotic M&As, and hence we focus on this aspectof justice in our processual analysis.

Our study builds on social construction and onbecoming rather than on an essentialist or staticunderstanding of organizational phenomena(Hernes & Maitlis, 2010). Previous studies adoptinga process perspective on M&As (Clark et al., 2010;Jemison & Sitkin, 1986) have shown that post-merger processes tend to generate unintended con-sequences—both problems (Vaara & Monin, 2010)and opportunities for value creation (Graebner,2004). We want to extend this process view byconceptualizing postmerger integration as a sense-making process in which norms of justice play acentral role in steering the course of integration.These sensemaking activities are complex; they in-volve actors in a variety of positions whose inter-actions determine whether specific norms are en-acted (Maitlis, 2005). In particular, these activitiescomprise both purposeful sensegiving and reac-

tions to sensegiving in the form of member sense-making (Maitlis & Lawrence, 2007).

We draw from a real-time, longitudinal, explor-atory study of postmerger integration in the recentmerger between two European logistics companies,Southco and Northco (pseudonyms). This exten-sive research project was carried out by a transna-tional research team that gathered data includinginterviews, documents, and other informationabout postmerger integration in general and justicein particular. Through our process analysis, weidentified a clear pattern in which the focus ofsensegiving and sensemaking moved from equalityto equity to less attention on distributive justice perse. We then proceeded to explain this pattern bydeveloping a process model of the role of justice inpostmerger integration. In this model, dialecticalpressures for value creation (changes needed toincrease efficiency and effectiveness) and sociopo-litical concerns (problems related to uncertainty,resistance, cultural clashes, and identification) trig-ger a need for sensegiving and sensemaking aboutjustice. In the core of this model are sensegivingacts that comprise “sensebreaking” (breaking pre-viously established senses of justice), sense speci-fication (providing specific meanings to justice),and “sensehiding” (deliberately avoiding particularsenses of justice). Sensemaking in the form of mem-bers’ reactions consists of acceptance (acceptanceof specific senses of justice), resistance (resistanceto senses of justice), and distancing (taking distancefrom senses of justice). The dialogical dynamics ofsensegiving and sensemaking then determine howspecific norms of justice are enacted, the degree ofambiguity around the norms of justice, and theextent to which managers’ and other members’views on justice align in a postmerger organizationat a given point of time.

This analysis adds to research on M&As by fur-thering understanding of the crucial role thatnorms of justice in general and distributive justicein particular play in postmerger integration, theway in which they change over time as integrationprocesses unfold, and the intergroup dynamicsthrough which these norms of justice are createdand enacted. By highlighting the social construc-tion of norms of justice, we also open up newavenues in research on organizational justice. Bydistinguishing how sensebreaking, sense specifica-tion, and sensehiding affect the dynamics of organ-izational sensemaking, our analysis adds to re-search on the dynamics of sensegiving andsensemaking. Finally, by explaining how the un-derlying dialectics of value creation and sociopo-litical concerns are given sense to and made senseof in dialogical processes, our model may be more

2013 257Monin, Noorderhaven, Vaara, and Kroon

generally useful for process studies of organiza-tional change.

A SENSEMAKING APPROACH TO JUSTICE INPOSTMERGER INTEGRATION

Postmerger Integration

Postmerger integration is a complex organiza-tional process that involves difficult managerialchallenges. On the one hand, there is a need tocreate synergy (Larsson & Finkelstein, 1999) orvalue (Haspeslagh & Jemison, 1991) through organ-izational changes. On the other hand, these verychanges tend to generate uncertainty (Cording,Christmann, & King, 2008), resistance (Buono &Bowditch, 1989), culture clashes (Stahl & Voigt,2008), identity problems (Maguire & Phillips,2008), and organizational politics (Graebner, 2004).Dealing with the tensions between value creationand sociopolitical concerns appears to be the cruxof postmerger integration management (Haspeslagh& Jemison, 1991; Larsson, 1990; Walter, 1985).Scholars have explored various aspects of thisdaunting task, such as the importance of combiningcoordinative efforts with measures to avoid em-ployee resistance (Larsson, 1990), the necessity ofsynchronizing task integration and human integra-tion (Birkinshaw, Bresman, & Håkanson, 2000), andthe need to balance interdependence with auton-omy (Graebner, 2004; Haspeslagh & Jemison, 1991).Importantly for our purposes, the potential ten-sions between value creation and sociopoliticalconcerns are particularly strong when close coop-eration is needed without one firm dominating theother—that is, in mergers of the “symbiotic”(Haspeslagh & Jemison, 1991), “equality/conflict”(Larsson, 1990), or “collaboration/synergy” types(Napier, 1989). These types of mergers (which wewill refer to as symbiotic) are characterized by aheightened sensitivity to justice among people af-fected by them (Zaheer et al., 2003). Thus, there isa special need for rules of the game that define whatis fair in dealing with postmerger integrationchallenges.

We argue that it is important to examine theserules of the game from a processual perspective.Landmark studies have emphasized the dynamicnature of M&As (Jemison & Sitkin, 1986; Larsson,1990). More recent analyses have in turn demon-strated how unfolding organizational changes cre-ate new problems and challenges (Clark et al., 2010;Schweizer, 2005; Vaara & Monin, 2010). Althoughthese studies have not focused on justice, they allsuggest that the way in which managers are able todeal with shifts in the rules of the game has a

fundamental impact on the course of integration.Thus, there is a need to examine in more depth hownorms of justice as rules of the game are made senseof in unfolding integration processes and how theymay be managed.

Norms of Justice as Social Constructions

Philosophers (e.g., Rawls, 1971), political scien-tists (e.g., Walton & McKersie, 1965), social psy-chologists (e.g., Adams, 1965), and sociologists(e.g., Rubinstein, 1988) have examined justice as aninherent part of social life. Management scholarshave studied justice at the individual, group, andorganizational levels (Ambrose & Cropanzano,2003; Colquitt et al., 2001; Colquitt & Rodell, 2011).This research has covered different dimensions oforganizational justice, including distributive, pro-cedural, informational, and interpersonal justice(Colquitt et al., 2001; McFarlin & Sweeney, 1992).These various dimensions of justice are interlinked(Luo, 2007). For example, a decision concerning afair allocation of resources (distributive justice)should be accomplished in a just process (proce-dural justice), involve proper justifications (infor-mational justice), and involve nurturing of relation-ships (interpersonal justice). Consequently,although we primarily focus on distributive justicehere, the actual issues are also closely connected toother aspects of justice.

Distributive justice deals with issues of bargain-ing, resource allocation, and allotment of out-comes, as well as the norms of justice associatedwith these activities (Adams, 1965; Leventhal,1976). The classical norms are equity, equality, andneed. As need is a more general concern that oftenconnects with the personal rather than the collec-tive level, we focus on equity and equality as thenorms that play a key role in organizational change(for similar reasoning, see Kabanoff [1991]). Al-though organizational research has mostly focusedon equity, it has also been demonstrated that equal-ity is the central norm when social relationshipsare in the fore. In this view, equity is the normalrule of distributive justice; it means that outcomesare distributed according to input or contribution(i.e., equitably). Equality in turn is a norm signify-ing the equal value of the members in a relation-ship; it facilitates maintenance of mutual self-es-teem and positive relationships (Deutsch, 1985;Kabanoff, 1991).

Ring and Van de Ven (1994) paved the way forstudies of justice in interorganizational settings byarguing that perceived justice determines the fate oforganizational relationships. Since then scholarshave examined various aspects of justice in alli-

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ances (Ariño & Smith Ring, 2010; Luo, 2007) and inM&As (Citera & Rentsch, 1993; Meyer, 2001). Al-though most studies in the M&A context have fo-cused on distributive or procedural justice (Lippo-nen, Olkkonen, & Moilanen, 2004; Meyer &Altenborg, 2007), informational and interpersonalfairness have also been linked with value creation(Ellis et al., 2009; Klendauer & Deller, 2009). Fur-thermore, studies have shown that different dimen-sions of justice may reinforce or weaken each other(Ellis et al., 2009). In all, this research has demon-strated that perceptions of justice have a fundamen-tal impact on people’s attitudes and behaviors(Klendauer & Deller, 2009; Meyer & Alten-borg, 2007).

Symbiotic mergers often bring with them accen-tuated expectations of equality and attention to dis-tributive justice, especially in the case of mergers ofequals (Hambrick & Cannella, 1993; Meyer, 2001).As Zaheer et al. put it: “By defining a merger as oneof ‘equals,’ an expectation of distributive equalitymay be created (i.e., that every aspect of the mergerwill be equal), rather than one of integrative equal-ity, where on balance, each side will gain in someareas and lose in others” (2003: 186). However, thisfocus on distributive rather than integrative bar-gaining may be at the expense of realizing syner-gies1 (Walton & McKersie, 1965). This may be areason why other studies indicate that it is difficultto maintain consistent images of “equality” or tohold on to a “balance of power” in the long run(Hambrick & Cannella, 1993; Very, Lubatkin,Calori, & Veiga, 1997).

These contributions notwithstanding, little isknown about how norms of justice in general anddistributive justice in particular are socially con-structed in the course of postmerger integration—that is, how on the one hand management justifiesintegration measures by explicitly or implicitlyevoking norms of justice and how on the otherhand members make sense of these norms. This hasunfortunately prevented researchers from fullycomprehending the central role that norms of jus-tice play as rules of the game in postmergerintegration.

Giving Sense to and Making Sense of Justice

A sensemaking perspective allows one to exam-ine the complex processes through which organi-

zational actors socially construct their realities(Weick, 1995), hence providing a useful theoreticalapproach to examining the social construction ofnorms of justice in postmerger integration. A keyidea in sensemaking is that it is triggered by issues,“events, developments, and trends that an organi-zation’s members collectively recognize as havingsome consequence to the organization” (Dutton &Dukerich, 1991: 518). Accordingly, one can con-ceptualize postmerger integration as a processwherein anticipated and unanticipated issues trig-ger sensemaking. These issues often deal with fun-damental questions concerning justice betweenand among organizations, groups, and individuals.

Sensemaking is related to sensegiving, which isthe attempt to influence the sensemaking of othersin a particular direction (Bartunek, Rousseau, Ru-dolph, & DePalma, 2006; Maitlis, 2005). Althoughthis sensegiving is usually seen as the work of topmanagement, middle managers also engage in be-haviors such as “selling” (Dutton & Ashford, 1993;Rouleau, 2005). Such sensegiving is likely to play acrucial role in the social construction of norms ofjustice. Sensegiving in the context of postmergerintegration could for instance pertain to the prom-ulgation of an appropriate principle for allocatingmanagerial positions (e.g., equal representation orselection on the basis of competence). Fortin andFellenz (2008: 428) underscored the importance ofthis “norm shaping.” Through shaping, managerscan influence the justice perceptions and resultingreactions of employees. Thus, managers and otherorganizational actors use various means, such asdiscourse, rhetoric, narrative, and metaphor, to cre-ate specific meanings (Watson, 2003). At times ac-tors also engage in sensebreaking: the intentionaldestruction of existing meaning in an effort to fa-cilitate change (Maitlis & Lawrence, 2007; Mantere,Schildt, & Sillince, 2012; Pratt, 2000). Managersmay also actively avoid using particular discours-es—a phenomenon that has been called “sensehid-ing” (Vaara & Monin, 2010).

Sensemaking may take different forms depend-ing on the interactions between the actors involved(Maitlis, 2005). This is also the case with norms ofjustice; they may be accepted, resisted, or purpose-fully ignored (Sonenshein, 2010; Stensaker & Falk-enberg, 2007). These reactions are crucial in deter-mining whether the norms promoted will befollowed and whether related organizationalchanges will be resisted. Thus, it is important toexamine the dynamics of these processes in post-merger integration. This leads us to formulate ourresearch questions as follows: How is distributivejustice given sense to and made sense of in post-merger organizations? What are the dynamics that

1 In integrative bargaining, the parties search for solu-tions that maximize overall value. We are indebted to oneof the reviewers for pointing our attention to the linkwith the bargaining literature.

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characterize these sensegiving and sensemakingefforts in unfolding postmerger integrationprocesses?

METHODS

Research Context

We conducted a longitudinal real-time analysisof the merger between Southco and Northco. Bothcompanies operated in the same service sector, butSouthco was approximately twice the size ofNorthco in terms of turnover and number of em-ployees. The combination took place in a boomingeconomy, and the finances of both organizationswere sound. For our purposes, this merger—for-mally, a friendly acquisition—served as revelatorycase as it involved complex cultural and politicaldynamics and a special need to make sure that themerger and the subsequent postmerger integrationdecisions were fair. As we were able to follow theunfolding integration efforts in real time, this casecan be seen as an ideal setting for analyzing organ-izational process dynamics.

We gained access to the case immediately afterthe merger plans were announced through directcontact with top management. This led to a longi-tudinal research project in which we researchersfollowed the unfolding postmerger integration pro-cesses from the beginning, for five years altogether.Although the project was designed to serve ouracademic research interests, it also served to pro-vide continuous feedback to top management. Wewere given open access and an opportunity togather unusually extensive and comprehensivedata. The project was designed so that we couldexamine several research questions related to or-ganizational change. From the start, our intentionwas to focus on justice; in the course of the researchproject, we realized that sensemaking about justiceformed a fundamental part of the integration pro-cess and its management.

Empirical Data

Our empirical data comprise interviews, internaldocuments and communications materials, mediacoverage, and meetings with top and middlemanagers.

Interviews. Semistructured interviews served asthe primary source of data. Three of the authors to-gether with four other researchers held a series ofinterviews every six months for almost four years.Altogether, we conducted 682 interviews withSouthco and Northco managers and employees in themost important business areas and functions in tencountries. We distinguish among top management2

(the CEOs of both companies, executive vice presi-dents, division heads, and country managers), middlemanagement (heads of units and functional depart-ments), and lower management and employees. Ta-ble 1 summarizes the distribution of interviews.

The interviews lasted from 45 to 90 minutes andwere (with a few exceptions) recorded and tran-scribed verbatim. We conducted the interviews inthree different languages, depending on the mothertongue and language skills of the interviewer andinterviewee. In these semistructured one-to-one in-terviews, we followed a story-telling approach(Czarniawska, 2004): interviewees were able to ex-press their experiences, without too much guid-ance on the part of their interviewer, by respondingto broad questions such as “What do you think ofthe merger?” This very frequently prompted inter-viewees to talk about justice. Moreover, our inter-view protocol also comprised a range of questionsdealing with postmerger integration. Specific ques-tions about justice included the following: “Do youthink the decisions taken so far are advantageous ordisadvantageous to the company in general?”“What about your own function or department?”

2 It should be noted that our definition of top manage-ment is broad. However, in this merger involving tens ofthousands of people, the group of top decision makerswas exceptionally large.

TABLE 1Breakdown of Interviews (n � 682) by Company, Hierarchical Level, and Perioda

Hierarchical Level

Southco (n � 380) Northco (n � 302)

Period 1 Period 2 Period 3 Period 1 Period 2 Period 3

Top management 21 19 12 38 15 5Middle management 55 41 11 51 50 21Lower management and employees 117 96 8 57 34 31Total 193 156 31 146 99 57

a Data were collected every six months. Additional details are available on request.

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and “The ‘combination’ [merger] has been said tobe guided by a fairness principle. From what youobserve, is that true? Why (not)?” All this allowedus to zoom in on the organizational sensegiving andsensemaking processes of people representing dif-ferent parts of the organizations.

Internal documents, communications materi-als, and media coverage. We gathered relevantinternal documentary material amounting to over200 documents. Among 36 internal merger-relateddocuments and presentations (e.g., reports by con-sulting companies such as Boston ConsultingGroup and extensive verbatim records of manage-ment conventions on both sides),3 we focusedspecial attention on the most influential ones. Inparticular, a document labeled “agreement on inte-gration rules between Southco and Northco” pro-vided the basis for the governance of the mergedcompany, and the internal document “Southco-Northco principles of organization and manage-ment” described the Southco-Northco modus ope-randi three years after its beginning. We attentivelyread extant monographs and books (eight alto-gether) on the century-long history of the partners.Furthermore, we collected a large amount of com-munication material. In particular, the companynewsletters at both Southco and Northco (pub-lished every two weeks) provided interesting infor-mation on the framings of specific issues of debate.We also utilized selected publications by the com-panies’ works councils. Top managers of both com-panies gave several public speeches and interviewsthat were diffused through the media, and we sam-pled 15 of them for “triangulation” purposes. Fi-nally, to understand the wider discussion aroundthe merger, we also gathered extensive media cov-erage (more than 100 documents), focusing on theexplicit or implicit norms of justice.

Meetings with top management. Throughoutthe research project, we remained in contact withSouthco-Northco corporate management, and thisproximity provided numerous opportunities forformal and informal discussions. Notably, we re-ported our findings every six months to a Southco-Northco steering committee for our research and,upon request, to HR managers in several businessareas. Key findings were presented once a year tothe Southco-Northco Top Management Committee.These meetings were important opportunities todiscuss our findings and validate our results (seebelow). Although top management learned from

this feedback, we do not think that it had a decisiveimpact on their views regarding postmerger inte-gration in general and justice in particular.

Data Analysis

Our analytic approach was abductive. Accord-ingly, we developed our theoretical ideas alongsideincreasingly accurate mapping of the case. Afterpreliminary analyses, we proceeded in three stages:We carried out a detailed analysis of sensegivingand sensemaking about justice over time and acrossbusiness areas and locations. We then focused onan in-depth analysis of different modes of sensegiv-ing and sensemaking. We finally analyzed the dy-namics of sensegiving, sensemaking, and enact-ment to develop a more general model of the role ofjustice in general and distributive justice in partic-ular in postmerger integration.

Analysis of sensegiving and sensemaking overtime and across business areas and locations.Drawing on all available documentary and inter-view material, we mapped out events and decisionsin detail. We identified key issues, delineated char-acteristic patterns of sensegiving and sensemakingabout justice across groups of people over time, andfinally constructed our researchers’ narrative (Lang-ley, 1999) of this sensegiving and sensemaking. Wefocused on distributive justice—that is, on exam-ples of issues related to the distribution of re-sources, roles, and responsibilities as well as ratio-nalizations and cutbacks.4

In this analysis, we first focused on explicit ref-erences to justice, which provided rich materialabout the central role of justice in postmerger inte-gration. However, we then realized that referencesto norms of justice were even more often implicit,requiring contextual interpretation and sometimesreading between the lines. For example, a countrymanager told us how Southco and Northco depart-ments were merged in his organization: “Depart-ment by department we look how Southco andNorthco can be linked together. People can indicatewhich job they would like to have most here inSales, and which are their second and third prefer-ences. And then we have a consultation, say aninterview, with the candidates. A team of Northcoand Southco people talks with them, as neutral aspossible. And that ultimately should lead to ap-pointments of the right people to the right posi-tions.” Although the interviewee did not explicitlymention justice, the focus on equity in the quote is

3 Management conventions are large meetings of topand middle managers that were held once or twice a yearduring the integration.

4 However, other aspects of justice were often closelylinked with issues of distributive justice.

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revealing, especially in contrast to the emphasis onequality in earlier interviews in the same countryorganization.

In this process, we identified about 40 poten-tially relevant issues that we explored in somedepth. From these we selected eight “tracer” issuesthat (a) were particularly salient in terms of illus-trating sensegiving and sensemaking about distrib-utive justice, (b) were seen as important by mostgroups of people, (c) were representative of whathappened in the merger at large or within a partic-ular department or function, and (d) helped us toillustrate a variety of patterns of sensegiving andsensemaking about justice over time (for analogouscriteria, see Maitlis and Lawrence [2007]). This alsoled us to distinguish three time periods. Figure 1 isa time line tracking key issues in the merger.

Analysis of modes of sensegiving and sense-making. We then zoomed in on the various modesof sensegiving and sensemaking concerning justiceand coded our interviews and relevant parts ofdocumentary material on this basis. Figure 2 de-scribes the coding structure of our data.

Coding led us to identify and elaborate on threemain types of sensegiving: sensebreaking, sensespecification, and sensehiding. Following the ex-amples of other researchers (Mantere et al., 2012;Pratt, 2000), we defined sensebreaking as breakingdown previously established senses about justice.This sensebreaking included both “problematiza-tion” of previous ways of thinking or acting (e.g.,problematization of equality as the central norm ofjustice) and concrete rule-breaking decisions and

actions. We realized that another important part ofsensegiving was specification of explicit or implicitnorms of justice, which we call sense specification.This sense specification could take different forms:coining of principles, exemplary decisions and ac-tions, symbolization, and quantification. Sensehid-ing (Vaara & Monin, 2010) also played a crucial rolein the case, and we defined it as silencing alterna-tive senses of integration or marginalization of par-ticular voices.

Furthermore, we distinguished between types ofmember reactions as key forms of sensemaking.This led us to focus on three types of sensemaking:acceptance, resistance, and distancing. We definedacceptance as active or passive acceptance of theestablished or offered senses about integration(Giessner, Viki, Otten, Terry, & Täuber, 2006). Thisacceptance could take the form of active support,buy-in, or reasoned agreement. We distinguishedbetween disagreement and opposition as forms ofpassive and active resistance. We also realized thatmany people did not seem to directly accept orresist the meanings offered, but “took distance”from them instead (Piderit, 2000). Hence, we de-fined distancing as putting distance between one-self and the established or offered senses of inte-gration. This distancing consisted of questioning,irony, and cynicism.

Analysis of dynamics of sensegiving, sense-making, and enactment. Finally, we proceeded toanalyze the dynamics of sensegiving, sensemaking,and enactment to develop a more general under-standing of the role of justicein postmerger integra-

FIGURE 1Timeline of the Emergence and Evolution of Key Issues in the Merger of Southco and Northco

PERIOD 1: FAIRNESS AS EQUALITY

Postmerger

Year 1 Year 5

1. Combination Model

8. New Organization

7. Integration of Sales Offices

Colocation of Northco and

Southco’s offices and distribution of managerial

positions: Operational integration decision

6. Reallocationof Capacity from

Northco to Southco

New capacityordered by

Northcoeventually went to

Southco’s fleet:Operational

integration decision

5. New Approach to Integration

2. Integration of Operational

Network

3. Allocation of Resources and

Positions at B-to-B

4. Integration of IT Activities

Launch of a neworganizational

model tostreamline

operations: Top-management-led

organization-wide decision

Strategy to foster integration

and create value: Top-

management-ledorganization-wide decision

Decisionsconcerning

responsibilitiesand leadership

in IT: Operationalintegrationdecision

Decisionsconcerning theintegration and

future developmentof B-to-B:

Operationalintegrationdecision

Combination ofoperational

networks and allocation of

responsibilities: Operationalintegrationdecision

Organizationalmodel for the

new group: Top- management-led

organization-wide decision

PERIOD 2:FROM EQUALITY TOWARD EQUITY

PERIOD 3:DECREASING EMPHASIS ON JUSTICE

Premerger Merger

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FIGURE 2Abductive Analysis: Structure of the Dataa

FIRST-ORDER CONCEPTS

SENSEGIVINGSENSE SPECIFICATION

SENSEBREAKING

SENSEHIDING

ACCEPTANCE

RESISTANCE

DISTANCING

SENSEMAKING

SECOND-ORDER CONCEPTS AGGREGATE DIMENSIONS

PROBLEMATIZATION: Problematizing previous ways of thinking or acting about distributive justice(Southco-Northco CEO at the annual management convention, closing speech): “The principle of equal representation is no longer necessary. It prevents emergence of a real group culture.”

RULE BREAKING: Decisions and actions that challenge explicit or implicit distributive justice rules(Regarding the appointment of country general managers): “It is a good thing that where there is a dominant partner—Southco is much larger in Germany than Northco—to choose the other side . . . because you create an awareness of the integration project. If you don’t, then you risk remaining in habitual paths, and that’s exactly what you don’t want.”

PRINCIPLES: Coining of distributive justice principles(A vice president in the B-to-B division): “The balancing act? It all starts from the original idea: the best of both worlds. The notion of balancing act means this willingness that nobody, at any time, feels he has been eaten by the other.”

SYMBOLIZATION: Decisions and actions that symbolize distributive justice(A marketing manager shows the new Southco-Northco business card): “Luckily, Northco traditionally had its logo in the upper left-hand corner, Southco in the upper right-hand corner. If you put the two together, everybody still finds their logo right where it belongs and neither of the two had to make a concession. . . . If the logos start to shift, it is like one of the two has become more important than the other.”

EXEMPLARY DECISIONS: Concrete decisions used as examples of distributive justice(Speech by the program director at a Southco management convention): Closing a route has never been an easy decision.. . .: The strategic plan is based on a fair growth, and that’s a real opportunity. Much ink and saliva have been spilled over,notably on the so-called ‘Don’t Go East’ project, but this is the proof of our common will to coordinate our development.

QUANTIFICATION: Distributive justice rules based on calculations(A vice president in the B-to-B division): “The 60/40 ratio is a compromise. . . . Among the 126 leading positions, 70 areSouthco and 56 are Northco. . . . The world is divided into five geographical areas, a Southco director leads in three areasand Northco has two directors.”

SILENCING: Silencing alternative interpretations of distributive justice(Southco corporate communication officer): “We avoided the word merger. . . . because in people’s unconsciousness, merger means absorption and absorption means job destruction.”

MARGINALIZATION: Deligitimating dissident voices about distributive justice(Southco close advisor to Southco-Northco CEO): “This fair and balanced thing is all wrong. This was never mentioned in the president’s discourse. Balance relates to calculation and quantification, this is a residual from B-to-B. It has never been used in corporate communication since the signature of the combination.”

ACTIVE SUPPORT: Explicit proactive support of norms of distributive justice(IT manager B-to-B division) : “You always have discussions like this one on volume versus yield. Whereas we believein volume, Southco focuses more on yield. But keeping in mind the values of trust, respect, and fairness we have learntfrom each other. Now, we are both working toward a middle course.”

BUY-IN: Acceptance of distributive justice norms(Southco engineer, maintenance division): “This whole ‘fair and balanced’ principle is a very good and smart point of departure. It also increases trust among employees of both companies.”

REASONED AGREEMENT: Mixed feelings about the issue but understanding for the distributive justice norm(Northco salesman): “Southco left its business to Northco in some places. It means that they rely on Northco for certain areas. This is the opposite of what happened in another place—though we had been there for 70 years, avery long period. They made their decisions, of course it is cost cutting, but that’s fine.”

OPPOSITION: Resistance in action against a distributive justice norm(Northco IT developer): “The majority of IT applications went to Southco. But we have systems that could beworthwhile for the combination. Believe me they are ten years behind compared to us. So call me stubborn butI have decided that we build part of our systems into those of Southco.”

DISAGREEMENT: Expression of deviant views regarding distributive justice(Northco manager on his own management): “What I think is shocking, and I would like to mention it, is thatNorthco top managers have continued to state that we would collaborate. At the end we have been taken over.If I talked about collaboration at some party, everybody would laugh at me. I thought it was collaboration, butwe really have been taken over.”

QUESTIONING: Raising questions about distributive justice(Northco manager): “What is ‘fairness’ and ‘balance’? Is it: we are small and they are big, so by what percentage?Is it proportional? . . . Or should you have more VPs of Southco? Or should they have a stronger say? . . . What willhappen if Southco gets into trouble? Will they kick out a number of our (Northco) people because that is easierto do?”

IRONY: Conveying a meaning opposite of the literal meaning of a distributive justice norm(Area manager B-to-B division): “They (Southco) are brilliant strategists. Apparently they are far better instructedin terms of ‘how to deal with Northco’ than we are instructed in ‘how to deal with Southco’.”

CYNICISM: Expressing distrust and negativity regarding a distributive justice norm(Northco manager): “My view is that the big shareholder always decides. That’s the reality. Maybe some things of how we work are adapted, but the really important decisions are taken by Southco. The real decisions are not being taken by us.”

a Italic indicates illustrative phrases.

tion. We first focused on the general pattern re-vealed by our case: Equality was the central normduring the first period; then there was a shift fromequality to equity; and finally the role of distribu-tive justice became less accentuated. We then con-centrated on explaining this pattern by identifyingkey dynamics; specifically, we developed theoreti-cally grounded explanatory mechanisms based onthe data (Langley & Tsoukas, 2010; Van de Ven &Poole, 1995) to understand this pattern in M&Asmore generally. This process led to the develop-ment of a more general model of norms of justice asrules of the game in postmerger integration that wasbased on the dialectics of value creation versussociopolitical concerns, the dialogical dynamics ofsensegiving and sensemaking, and the enactment ofnorms of justice. As for enactment, we focusedspecial attention on the shifts in the dominantnorms of justice, the ambiguity around the norms ofjustice (the degree to which norms could be inter-preted in different ways), and the overall alignment(between managers’ and members’ views).

This kind of qualitative process analysis involvesmethodological challenges related to validity andgeneralizability. Our regular feedback meetings withboth companies helped to validate our findings. Thecorporate representatives could deepen our under-standing of specific issues with additional back-ground information and put our findings into per-spective. This kind of analysis is necessarilysubjective; however, working in an internationalteam, in which we represented the nationalities of thetwo merging companies as well as other nationalities,helped us to reduce ethnocentricity. Finally, all thisanalysis was challenging language-wise, as we had towork in the languages of the two countries of originand also in English. The actual analysis was con-ducted in the original language, but the main resultswere translated into English.

GIVING SENSE TO AND MAKING SENSE OFJUSTICE AT SOUTHCO-NORTHCO

The following sections summarize key patternsin giving sense to and making sense of norms ofjustice over three time periods (see Figure 1). Ineach period, we first elaborate on integration pres-sures, then focus on sensegiving and sensemakingaround specific integration issues, and finally dis-cuss the enactment of norms of justice.

Period 1: Equality as the Guiding Principle

Integration pressures: Value creation vs. socio-political concerns. In the following, we examinepressure for value creation and sociopolitical con-

cerns and explain how top management tended toemphasize sociopolitical concerns. As for valuecreation, a key reason for the merger was the syn-ergy potential it offered in a sector that was under-going market liberalization. A top manager put it asfollows at the announcement of the merger: “Thesingle European market reinforces the need for con-solidation of the industry.” The chief operating of-ficer (COO) of Southco was blunt in a publishedinterview: “The [industry] landscape is movingfast. There are no other options: either we go aheador we allow ourselves to be suffocated.” Accordingto this logic, the merger would be a means to ex-ploit the opportunities of market liberalization anda way to create competitive advantage. In particu-lar, ambitious ideas about significant synergy com-ing from cost savings were expressed: “We couldhave said 800–900 million euros, and we couldhave justified it, but with 500 million euros we aresure we can implement it” (joint statement of thetwo CEOs, professional press).5

At the same time, the merger was sociopoliticallychallenging. In particular, Southco and Northcohad strong national stakeholders and, as organiza-tions, were characterized by strong national identi-fication. Concerns about a loss of autonomy andstanding were at the forefront, shown for examplein numerous negotiations between the stakehold-ers. As the CEO of Northco put it, “Northco is a[firm] with a great history and people were afraidthat we would be kind of gobbled up and disappearin the merger” (Northco CEO, in the business press,one year into the merger). Furthermore, key em-ployee groups and unions on both sides feared thatthe merger would result in redundancies or de-crease the power of the unions, and these concernswere voiced widely.

This led top management to focus special atten-tion on winning the support of key stakeholders. Inparticular, the negotiations before the deal and afterthe announcement were characterized by a focuson the balance of power between the two partiesand discussions about ensuring that the interests ofboth sides would be protected. This led to a prior-itization of sociopolitical concerns, even if it meantsacrificing some of the potential synergy benefits.As the two CEOs put it in a joint statement: “Wehaven’t taken full integration of both organizationsinto consideration. There is further potential, butwe are deliberately not looking at it. Many mergersfail because the integration takes place very

5 To maintain case anonymity, we do not formally citesome sources. Please contact us for more informationabout the emperical material.

264 FebruaryAcademy of Management Journal

quickly, and then it turns out it doesn’t work. Wewill not integrate for the sake of integration. If thereis a risk of failure, we will not do it” (professionalpress). Thus, top management took a cautious ap-proach to integration, trying to begin with thoseareas that would create the fewest sociopoliticalconcerns. Southco’s CEO put it as follows at animportant management convention: “Whether ex-perts like it or not, Southco-Northco has chosen itsrhythm, one of a pacified firm fully aware of theissues, which has succeeded—results speak—inachieving difficult and ambitious projects.” Thus,top management pursued a balance-of-power ap-proach that was subsequently crystallized in thefairness principle, as explained below.

Issues of justice. We now focus on giving senseto and making sense of justice in the context of fourissues. We start with top management’s sensegivingaround the creation of an organizational model thatwould be acceptable to most stakeholders. We thenmove on to three central issues of operational inte-gration that highlight middle management’s role inproviding meaning to issues of justice: the integra-tion of operational networks, the allocation of re-sources and positions at the “business-to-business”(B-to-B) division, and the integration of informa-tion technology activities. Although our text high-lights the processual dynamics, Table 2 providesdetailed examples of the characteristic modes ofsensegiving and sensemaking about justice duringthis first period.

Issue 1—Combination model: Sensegiving. Fortop management, the most important issue in thebeginning was to find a way to set up a new organ-ization. As explained above, top managementneeded to create value and at the same time justifythe changes vis-à-vis stakeholders who were con-cerned about any changes that would threaten jobs.To be able to convince stakeholders on both sidesthat their interests would be protected, top execu-tives focused on fairness as the guiding principlefrom the earliest stage of the discussions. Most im-portantly, during the last stretch of the negotia-tions, representatives of Southco and Northcocrafted a detailed document, the agreement on in-tegration rules between Southco and Northco, thatspelled out the governance principles for the com-bination and the rules of the game for subsequentintegration. A central theme of this agreement wasthe “fairness principle,” which stressed equalitybetween the two parties. It was guaranteed that thename of the new group (the combined entity)would be Southco-Northco, that the brands andlogos of both corporations would be preserved, andthat investment in both operational centers wouldcontinue.

This fairness principle was then communicatedto important stakeholders. For example, Southco’sCEO made a significant speech at Northco’s workscouncil, stating that “we want to reinforce mutualrespect by applying in all areas of the collaborationthe principle of fairness.” Most top managementcommunications emphasized collaboration on thebasis of equality: equal representation on a topmanagement committee and, more generally, equalopportunities for Southco and Northco employeesand an equivalent number of Southco and Northcomanagers in key positions. At this stage, the normof equality was communicated not only verbally,but also nonverbally, and in particular in the de-meanor of the two top managers at meetings andconventions. A Northco technical employee re-ferred to “the way I see [the CEOs of Northco andSouthco] together, the way they stand next to eachother in complete equality.” Importantly, it wasagreed on and emphasized that the arrangementshould not be seen as a full-fledged merger. ASouthco executive vice president (EVP) describedtop management’s reasoning: “The word ‘merger’was forbidden from the very beginning as it con-noted ideas of massive lay-offs, hostility, asymme-try in power, and all these negative ideas.” A seniormanager of communication recalled that “duringthe early months, we kept calling the journalists toask them to correct their articles each time theytalked of the combination as a merger.”

Sensemaking. This approach helped create pos-itive responses from most stakeholders. The idea ofequality was especially important for the stake-holders of Northco, who had been very concernedabout a loss of identity and relative independence.In that respect, the proposition by the CEO ofSouthco to christen the new group with the namesof the two firms—as opposed to giving symbolicdominance to Southco—had a positive reception.Nevertheless, the Northco works council expressedits careful vigilance right after the announcement ofthe deal: “Issues that need to be watched closely arethe agreements that have been made during thenegotiations before the merger. These are specifi-cally the ‘fair and balanced’ allocation of work andthe allocation of ‘centers of excellence.’” The com-bination model was also supported by the Southcounions, which were afraid of the job losses thatwould result from a more radical restructuring. In-ternally, most lower managers and employees atSouthco expressed their satisfaction. Even if someSouthco managers thought that the explicit empha-sis on equality favored Northco far too much, thisview was rarely expressed openly. These primarilypositive views pavedthe way for the subsequent

2013 265Monin, Noorderhaven, Vaara, and Kroon

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men

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way

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wh

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equ

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atB

-to-

B.

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nce

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tN

orth

coan

dS

outh

com

anag

ers

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loye

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rule

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ctiv

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ort.

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atI

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that

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pre

fere

nce

.If

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ep

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the

top

ofth

eB

-to-

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ivis

ion

,th

ere

are

man

yN

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rs.”

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thco

sale

sm

anag

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Qu

anti

fica

tion

.“T

he

bala

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ng

act

[im

ply

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a60

/40

div

isio

nof

pos

itio

ns]

was

the

pro

du

ctio

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the

smal

lte

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B-t

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dir

ecto

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(vic

ep

resi

den

t,B

-to-

B)

Rea

son

edag

reem

ent.

“To

mak

eS

outh

co-N

orth

cofu

nct

ion

,th

em

inor

ity

par

tner

wil

lal

way

sn

eed

tobe

over

rep

rese

nte

d.”

(Sou

thco

man

ager

)

(Con

tin

ued

)

TA

BL

E2

(Con

tin

ued

)

Sen

segi

vin

gE

xam

ple

sS

ense

mak

ing

Exa

mp

les

Res

ista

nce

.S

ome

ofth

eS

outh

com

idd

lem

anag

ers

resi

sted

the

rule

.

Dis

tan

cin

g.S

ome

mid

dle

man

ager

son

both

sid

esqu

esti

oned

the

mea

nin

gof

the

bala

nce

pri

nci

ple

.

Dis

agre

emen

t.“T

he

bala

nci

ng

act?

Itre

mai

ns

virt

ual

!It

’sa

kin

dof

fals

eba

lan

cin

gac

t.T

he

bala

nci

ng

act

was

dec

ided

orig

inal

lyto

allo

cate

and

shar

eth

em

arke

ts,

the

zon

es,

thos

eki

nd

sof

thin

gs.

Sin

ceth

en,

Ih

ave

seen

Nor

thco

peo

ple

take

form

erS

outh

cop

osit

ion

s,n

otth

eot

her

way

arou

nd

.”(S

outh

coco

ntr

olle

r)

Qu

esti

onin

g.“S

omet

imes

Ife

elth

atth

ere

isto

om

uch

valu

ebe

ing

atta

ched

toth

e‘b

alan

ced

pri

nci

ple

.’I

mea

n,i

fyo

ulo

okat

fill

ing

up

pos

itio

ns,

Iu

nd

erst

and

that

itis

ase

nsi

tive

issu

ebu

tit

has

tost

opat

ace

rtai

np

oin

t.T

hen

we

hav

eto

gofo

rw

hat

isbe

stfo

rth

eco

mp

any

asa

wh

ole.

”(N

orth

coX

XX

X,m

arke

tin

gan

dco

mm

un

icat

ion

).

Iron

y.W

hat

itis

tru

lysh

ared

[i.e

.,w

hat

peo

ple

onbo

thsi

des

agre

eon

]is

that

Sou

thco

give

sm

ore

than

wh

atit

gets

from

Nor

thco

.”(S

outh

core

ven

ue

man

ager

,sai

din

air

onic

way

)

Cyn

icis

m.“

The

bala

ncin

gac

tis

anac

toff

aith

,iti

svi

rtua

lin

aw

ay..

..In

the

end,

ever

ythi

ngm

ustb

ede

cide

d,Ii

mag

ine,

inth

eB

-to-B

Man

agem

entC

omm

ittee

.”(S

outh

com

anag

er,c

omm

erci

al)

Issu

e4—

Inte

grat

ion

ofIT

acti

viti

esS

ense

spec

ific

atio

n.

Top

man

agem

ent

use

dco

lors

assy

mbo

lsfo

req

ual

ity

inIT

dev

elop

men

t.

Sen

sesp

ecif

icat

ion

.T

he

CE

Oco

ined

the

pri

nci

ple

of“b

est

ofbo

thw

orld

s.”

Sen

sesp

ecif

icat

ion

.T

opm

anag

emen

td

evel

oped

rule

sas

toh

owto

shar

eIT

exp

ense

s.

Sym

boli

zati

on.

“Im

ade

the

colo

riza

tion

ofar

chit

ectu

rem

ysel

f—it

isa

fiel

dth

atI

know

very

wel

l.R

edor

gree

n.

Th

isis

ap

rin

cip

leof

urb

anis

m:

app

lica

tion

sar

eco

up

led

,yo

uca

nn

ever

wor

kin

fril

ls,

you

sim

ply

can

’t.

...

Ith

ink

ith

asbe

enra

ther

wel

ld

one.

Wit

hso

me

erro

rs,

but

no

fun

dam

enta

ler

rors

.”(S

outh

covi

cep

resi

den

t,IT

)

Pri

nci

ple

.“I

t’s

anim

age

that

Ion

ceu

sed

ina

Sou

thco

-Nor

thco

wor

ksh

op.

Itis

the

stor

yth

atyo

ual

lkn

ow.

Mar

ilyn

Mon

roe

sugg

ests

toA

lber

tE

inst

ein

that

they

shou

ldm

arry

and

hav

ea

litt

leba

byto

geth

er:

wh

ata

baby

itw

ould

be—

my

look

san

dyo

ur

inte

llig

ence

!E

inst

ein

resp

ond

ed:

I’m

afra

id,

dea

rla

dy,

itm

igh

tbe

the

oth

erw

ayar

oun

d.

Ifw

eh

ave

Sou

thco

effi

cien

cyin

term

ofco

ntr

ibu

tion

and

Nor

thco

exp

erti

sein

cap

acit

yop

tim

izat

ion

,it

’sfa

nta

stic

.B

ut

ifit

isth

eot

her

way

arou

nd

,it

’saw

ful.

”(C

EO

Sou

thco

-Nor

thco

)

Qu

anti

fica

tion

.L

et’s

rem

ind

you

abou

tth

eru

les

rega

rdin

gIT

exp

ense

s:it

is50

%–5

0%w

hen

an

ewap

pli

cati

onis

dev

elop

edfo

rth

etw

op

artn

ers.

We

hav

eto

shar

e,it

isou

rla

w.

An

dit

’s2/

3–1/

3w

hen

itis

anu

pd

ate

and

wh

enit

con

cern

sev

eryd

ayfu

nct

ion

ing

exp

ense

s.A

nd

itis

tru

eth

at,

for

big

pro

ject

s,th

e50

%–5

0%ru

leis

abi

tbr

uta

lfo

rth

esm

alle

rp

artn

er!

Bu

tw

en

eed

rule

s,si

mp

leru

les.

”(S

outh

covi

cep

resi

den

t,IT

)

Acc

epta

nce

.M

any

peo

ple

onbo

thsi

des

acce

pte

dth

e“B

est

ofB

oth

Wor

lds”

pri

nci

ple

,bu

tfo

un

dit

har

dto

imp

lem

ent.

Res

ista

nce

.M

anag

ers

and

emp

loye

es,

esp

ecia

lly

atN

orth

co,

also

resi

sted

the

pri

nci

ple

.

Dis

tan

cin

g.S

ome

man

ager

s,es

pec

iall

yat

Sou

thco

,to

okd

ista

nce

from

the

very

idea

ofeq

ual

ity

asre

gard

sIT

acti

viti

es.

Rea

sone

dag

reem

ent.

“For

exam

ple,

our

data

base

,tha

twill

bea

Sout

hco

data

base

.We

have

tole

arn

itof

cour

se,t

his

isa

disa

dvan

tage

.An

dth

ese

[Sou

thco

]p

eop

leh

ave

had

the

exp

erie

nce

for

year

san

dth

eyar

ere

ally

quic

kon

the

syst

eman

dm

aybe

then

man

agem

ent

wil

lsa

y:‘W

ell,

you

don

’th

ave

the

exp

erie

nce

and

that

’sw

hy

we

hav

eto

pre

fer

him

/her

.’O

fco

urs

eth

atw

ill

beu

nfa

irin

anin

div

idu

alca

sebu

tif

this

isw

hat

Sou

thco

-Nor

thco

thin

kis

the

best

way

,th

enw

eh

ave

toac

cep

tit

.”(N

orth

coco

rpor

ate

acco

un

tsag

ent)

Rea

son

edag

reem

ent.

“Iam

inch

arge

ofal

ign

ing

our

orga

niz

atio

ns

rega

rdin

gd

istr

ibu

ted

syst

ems

[net

wor

ksof

thou

san

ds

ofp

erso

nal

com

pu

ters

and

lap

top

s].S

ofa

rso

good

,th

at’s

fair

and

goin

gve

ryw

ell.

...T

he

only

dow

nsi

de

toth

isp

roje

ctis

the

add

itio

nal

wor

kloa

d—

and

may

beth

efe

elin

gth

atfr

omti

me

toti

me

Nor

thco

trie

sto

gain

tim

e.I

gues

s,be

cau

seth

eyca

n’t

foll

owon

all

pro

ject

s.”

(Sou

thco

ITp

roje

ctm

anag

er,d

istr

ibu

ted

syst

ems)

Dis

agre

emen

t.“I

don

’tbe

liev

ein

this

‘fair

and

bala

nce

d.’

Im

ean

fair

nes

s,w

hat

doe

sit

mea

n?

Let

’sco

nsi

der

anex

amp

lefr

omd

atab

ase

man

agem

ent.

Sou

thco

and

Nor

thco

hav

eea

chd

evel

oped

thei

row

nte

chn

olog

yw

ith

thei

rre

spec

tive

sup

pli

ers,

and

thes

ete

chn

olog

ies

are

not

com

pat

ible

.Bu

tw

em

ust

shar

ea

com

mon

tool

.O

non

esi

de,

Sou

thco

has

seve

ral

mil

lion

cust

omer

san

dN

orth

com

uch

less

.Wh

ere

isth

efa

irn

ess

ifth

eN

orth

coap

pli

cati

onis

slig

htl

ybe

tter

,bu

tth

ew

ork

oftr

ansf

erri

ng

the

Sou

thco

dat

ais

hu

ge?

...I

tis

not

imp

eria

lism

toad

mit

that

it’s

mu

chea

sier

totr

ansf

erth

eN

orth

cod

ata

into

the

Sou

thco

app

lica

tion

.Wh

atis

fair

nes

s,fo

rw

hom

?”(N

orth

com

anag

erIT

B-t

o-B

busi

nes

s)

Qu

esti

onin

g.“T

he

peo

ple

atN

orth

cow

ith

wh

omI

hav

ebe

enw

orki

ng

onth

en

eww

eb-s

ervi

ces

app

lica

tion

are

grea

t,ch

arm

ing.

Bu

tI

hav

eth

efe

elin

gth

atN

orth

coIT

top

man

agem

ent

resi

sted

.An

dS

outh

coIT

top

man

agem

ent

did

not

say

anyt

hin

g...

.Iw

ond

erab

out

Nor

thco

’sfa

irp

lay.

...B

ut

may

beit

’sn

oton

lyN

orth

cow

ho

resi

sts.

...I

don

’tkn

oww

ho

pu

lls

the

stri

ngs

.”(S

outh

coIT

pro

ject

man

ager

,web

serv

ices

)

Iron

y.“Y

ouco

uld

thin

kof

asc

enar

ioin

wh

ich

Sou

thco

hav

eth

ough

tab

out

ever

yth

ing

and

inth

een

dth

eych

opof

fou

rh

ead

s.N

o,se

riou

s,I

don

’tth

ink

itw

ill

hap

pen

,bu

tI

ama

bit

skep

tica

l.”(N

orth

com

arke

tin

gm

anag

er)

Cyn

icis

m.“

Th

isIT

pro

ject

wor

ked

beca

use

Nor

thco

had

no

choi

ce.”

(Sou

thco

ITm

anag

erin

char

geof

the

pro

ject

)

application of the norm of equality in issues ofoperational integration.

Issue 2—Integration of networks: Sensegiving.In operational integration, top and middle manage-ment focused on the specification of the rules of in-tegration, in particular on the meaning of equalityin context. The first major issue of operational in-tegration was the combination of networks. Theinitial agreement on integration rules provided thebasis for integration. However, the agreement didnot specify how to deal with practical decisionsconcerning the networks. The first practical deci-sions dealt with cases of overlapping routes. Forexample, both companies served two importantsouthern areas. It was decided that Northco wouldtake charge of the first destination, while Southcowould take care of the second one. The seconddecision regarded an important eastern area. At thetime of the merger, Southco operated this destina-tion through a local partner. Northco had beenplanning to serve this destination even before themerger but now was forbidden to do so because thiswould thwart Southco’s local collaboration. Sense-giving focused on justifying these exemplary deci-sions and on underlining the importance of equal-ity for both companies; integration would provideadvantages in making otherwise marginal routesattractive but also required passing some routes onto the other side.

Sensemaking. The decisions on network integra-tion triggered different responses on the two sides.The first decision concerning the southern destina-tion passed almost unnoticed by people at Northco,but it was crucial for the Southco personnel, whosaw it as unfair, since the first destination wasconsidered a lucrative one. Among Southco em-ployees, this decision became a widely shared ex-ample of the problems of the fairness principle inaction. Similarly, the decision about the easterndestination led to resentment among Northco net-work planners. A Southco vice president in chargeof planning explained it as follows: “For years, wehave had a special cooperation with our local part-ner. When Northco told us they wished to extendtheir operations there, we told them that it wasimpossible. And it became a kind of sketch: don’tgo east. They have had a hard time digesting it.They keep returning to us to say they need to haveit.” This exemplary decision, though causing rela-tively little harm to Northco, was rapidly discussedthroughout the Northco organization. “Don’t goeast” became a prevalent slogan among Northcoemployees, crystallizing the problems of the fair-ness principle in context. Nevertheless, many if notmost lower managers and employees appeared tounderstand and accept these decisions and the way

in which they reflected the general principle ofequality in integration. A manager at Northco put itas follows: “We lost [X] but we got back somethingelse. So I think it’s all going in a fair and equal way.”

Issue 3—Roles and responsibilities at B-to-B:Sensegiving. Integration proceeded most rapidlyin the B-to-B division, not least because the brandidentity was less important in this business areathan in others. After 18 months of coordination, itwas decided that the marketing, network, and salesfunctions would be fully integrated, while opera-tional activities would remain separate. To proceedwith integration, the five members of the Joint B-to-B Management Committee were looking for amore concrete framework than the fairness princi-ple and eventually spelled out the idea of “bal-ance.” They prepared a written document, the “bal-ancing act,” specifying what the overall principlemeant. These ideas were developed in the jointcommittee and provided B-to-B’s management ameans to give sense to and legitimize integrationdecisions. In particular, an understanding of thedistribution of managerial positions according to a60/40 principle was spelled out. The 60/40 ratiobecame a kind of compromise between the pure50/50 equality (which the dominant partner wouldnot accept) and an 80/20 division based on owner-ship proportions (which the smaller partner wouldreject).

Sensemaking. The people on either side inter-preted the Balancing Act in somewhat differentways. For the Southco people, the Balancing Actreferred specifically to a 60/40 split in managerialpositions. For the Northco people, it was the over-all principle to be followed in successive decisions,calling for respecting some kind of equality be-tween the two parties. Many lower managers andemployees at B-to-B, especially those fromNorthco, seemed to support this principle. In atypical comment, a Northco employee put it asfollows: “I believe the whole fair and balancedprinciple is outstanding and it is really amazinghow they [corporate top management] let us [thebusiness] experience it this way.” However, therewere also critical voices, especially from Southco.For example, a Southco sales representative put itas follows: “Southco’s B-to-B activity is the bride’sdowry in the Southco-Northco merger.”

Issue 4—Integration of IT: Sensegiving. Theintegration of information technology (IT) systemswas a third major operational challenge for the newgroup. There were ambitious targets for cost syner-gies. During the first months of the merger, IT ex-ecutives grouped the more than one thousand ITapplications into coherent clusters of intercon-nected systems and assigned them colors—red for

268 FebruaryAcademy of Management Journal

Southco and green for Northco—to symbolicallyindicate which of the two companies would be inthe lead for a particular cluster. Overall, the color-ing was supposed to lead to an approximately equalallocation of resources and responsibilities. Thiscoloring was later combined with a principle calledthe “best of both worlds” announced at an impor-tant management convention. The idea here wasthat IT integration should be built on the best ca-pabilities of both sides. Middle management at B-to-B needed to integrate IT early in the merger andtried to implement the CEO’s principle and com-bine the specific competencies of the two IT sys-tems. As B-to-B IT was colored red, Southco ledthis process.

Sensemaking. Lower management and employ-ees tended to point to the adverse consequences ofthe initial coloring, which could imply the substi-tution of a familiar system by another one. In theB-to-B division, Northco employees especially hadmajor problems with the new rule, and many ofthem denounced what they saw as domination bySouthco. A Southco manager understood this posi-tion: “To tell the truth, we underestimated that wemade them [Northco] swallow a lot of red. We toldthem: forget your systems, we’ll take Southco’s.” Inpractice, the principle of equality, as applied in thecoloring and combined with the principle of thebest of both worlds, led to a succession of compro-mises, and B-to-B managers and employees startedto question whether this principle could, after all,form the basis for effective and fair decisionmaking.

Enactment: Dominant norm, ambiguity, andalignment. We now focus on the enactment ofequality as the dominant norm of justice, makeobservations about ambiguity and the alignmentbetween management’s sensegiving and members’sensemaking, and finally summarize the implica-tions for the following period. The prioritization ofsociopolitical concerns over value creation pres-sures led top management to implement the fair-ness principle. Central to this principle was theidea of equality between the two sides as the over-arching norm of distributive justice that wouldguide integration decision making and action; thiswas reflected saliently in the new organizationmodel and equal representation in top management(issue 1). As explained above, the norm of equalitytook different forms and was interpreted in variousways when the networks were combined (issue 2),when responsibilities and positions at B-to-B wereallocated (issue 3), and when IT was integrated(issue 4); however, it continued to serve as theprimary principle throughout this first period ofintegration.

This norm of equality was characterized byinherent ambiguity. Initially, top management’sfairness principle appeared to provide a meansthat was both sufficiently clear and sufficientlyflexible to appeal to the central stakeholders. TheEVP for human resources at Northco explained:“The definition of ‘balanced’ is flexible. Ofcourse we sometimes explain it in terms of theproportion and size they [Southco] have in com-parison with us [Northco] . . . and if you look atthat, it also is accepted.” However, as operationalintegration went forward, increasing specifica-tion was needed; this was a special concern formiddle managers who had to deal with concreteintegration questions and decisions. As a result,there was little ambiguity in the case of overlap-ping routes but more in the case of allocation ofpositions at B-to-B. Interestingly, some Southco-Northco senior executives thought that B-to-Bmiddle managers went too far with their specifi-cations, especially in quantifying the balance;this kind of specification could be viewed aslimiting the options for top management to man-age the meaning of fairness. However, the inher-ent ambiguity became a major problem for thosedealing with IT: “The coloring aspect pleasedeverybody but it did not satisfy anybody. We arevery good at that. The higher you come the niceryou are to each other. But as soon as you look atthe consequences the house explodes. . . . At ahigher level you can quickly agree, because thenit is all still very abstract” (two Northco seniormanagers).

As the issues demonstrate, there was significantalignment between top and middle management’ssensegiving and member sensemaking, especiallyin the beginning when the fairness principleworked to assure key stakeholders that their inter-ests would be protected. Although there were de-viant views on how the integration of networks andthe allocation of resources and responsibilitieswere handled, on the whole the norm of equalityprovided top management as well as middle man-agement with a way to legitimate integration deci-sion making. However, this became more difficultwith IT (issue 4), where the complexity of theissue created increasing doubts whether equalitycould be reached and whether the principle ofequality could serve as an overriding norm indecision making more generally. An IT projectmanager at Southco put it as follows: “Regarding[project], I didn’t tell you everything. We[Southco] did 90 percent of the job and they[Northco] did 10 percent. Everybody knowsit. . . . I would like that the power relations bemore expressed. We respect them too much.”

2013 269Monin, Noorderhaven, Vaara, and Kroon

Alongside these experiences were other indica-tions that the members of the organizationswould no longer be able or willing to follow topmanagement’s guidelines. This was shown in theincreasing use of “the M-word”—merger—at theend of the first period. Whereas in internal andexternal communication “combination” was theofficial term (both in English and in the locallanguages of Southco and Northco), people nowstarted to use the M-word.

Finally, all this amounted to increasing problemsin holding on to equality as the guiding principle inpostmerger integration management. As a topNorthco manager put it, “That fairness, the conceptof fairness [implying equality] . . . it simply doesn’twork. We looked at it in terms of numbers andpositions. So if the HR person of [a division] wasfrom [Southco], then the one from the B-to-B divi-sion should be from Northco. Well, that’s a compli-cated construction. So what you saw was that if aposition changed color [was taken by someonefrom the other company] that somewhere else youneeded to shift color, too.” Such reflections pavedthe way for the change in the following period.

Period 2: Equity as the New Norm of Justice

Integration pressures: Value creation vs. socio-political concerns. We now focus on the mountingpressure for value creation and explain how thisled to a new phase in the integration. Top manage-ment became increasingly aware of the changes inthe environment: “Input materials prices continueto increase and the forecasts for economic growthare oriented downwards, especially in emergingmarkets” (Southco CEO, at a press conference).This was generally interpreted as a sign that moreshould be done in terms of synergy realization. Aleading strategist put it as follows: “In some areas[tighter] integration is required to encourage opti-mal synergy realization” (article in the businesspress). Moreover, integration created its own dy-namic. For instance, once sales people started tomake combined calls to major customers, the pres-sure to integrate IT systems increased: “It [the in-tegration] spreads and everybody will have to thinkin his way about what it will mean in the future”(country manager, Northco).

However, top management was still acutelyaware of the sociopolitical concerns and the risks ofradical changes. A top manager explained, “Therisk would be to speed up the combination processto get a few additional hundred MEUR of synergies,to compensate for the sharp increase in [input]prices, and then the combination that has startedwell would turn nasty” (VP marketing, Southco).

There was also a new kind of anxiety about inte-gration as people anticipated changes: “There is avery small group who think it’s very stressful, whosee a threat in [. . .] the second phase of the inte-gration. That’s to be expected” (top manager, pur-chasing, Northco). This led top management to pro-mote further integration while continuing toemphasize justice. However, justice was no longerseen as overall equality between the two mergerparties, but as equity in terms of fairness of specificintegration decisions in their proper context, as isillustrated below.

Issues of justice. In the following, we focus ongiving sense to and making sense of justice in thecase of three issues. We start with top manage-ment’s new approach to integration. We then moveon to two central issues of operational integrationthat highlight both top and middle management’sroles in promoting equity: the reallocation of capac-ity from Northco to Southco and the integration ofsales offices. Table 3 provides detailed examples ofthe characteristic modes of sensegiving and sense-making about justice during this second period.

Issue 5—New approach to integration: Sense-giving. For top management, this new situation ledto a fundamental change in their approach to inte-gration, which was carefully planned and commu-nicated internally and externally. The SouthcoCEO used the M-word for the first time officially atan important management convention. At the sametime, he also problematized the prevailing interpre-tation of fairness as equality and called for newthinking based on equity. At the next managementconvention, he went a step further and explicitlystated that “fairness will gradually be replaced byskills.” In a similar vein, top managers at Northcoprogressively abandoned references to equality andbalance that were initially crucial vis-à-vis theirstakeholders and went as far as publicly acknowl-edging (in the internal newsletter) that the norm ofjustice based on equality “had not been very unam-biguous.” Eventually the new CEO of Northco put itas follows in an interview with a business maga-zine: “Instead of 50/50 we now have 7 membersfrom Southco and 6 from Northco [in the top man-agement team]. I think that is right, given thatSouthco is twice as big as we are.” This indicatesthat although equality in absolute terms was nolonger emphasized, a certain degree of proportion-ality was still important.

Sensemaking. Reactions varied among the per-sonnel. Most of the Southco lower managers andemployees seemed to accept and eventually sup-port the new approach to integration. However,feelings at Northco were mixed, and some ex-pressed resistance. At Northco, a marketing man-

270 FebruaryAcademy of Management Journal

TA

BL

E3

Sen

segi

vin

gan

dS

ense

mak

ing

inP

erio

d2:

Equ

ity

asth

eN

ewN

orm

ofJu

stic

e

Sen

segi

vin

gE

xam

ple

sS

ense

mak

ing

Exa

mp

les

Issu

e5—

New

app

roac

hto

inte

grat

ion

Sen

sebr

eaki

ng.

Top

man

agem

ent

exp

lain

edth

atth

ep

revi

ous

app

roac

hto

inte

grat

ion

was

not

enou

gh.

Sen

sesp

ecif

icat

ion

.Top

man

agem

ent

reap

pro

pri

ated

“th

eM

-wor

d.”

Pro

blem

atiz

atio

n.

“Wh

ile

team

sin

cert

ain

area

sar

ew

orki

ng

toge

ther

clos

erth

anbe

fore

,it

isn

ever

thel

ess

beco

min

gin

crea

sin

gly

com

ple

xto

ach

ieve

add

itio

nal

syn

ergi

esw

ith

our

curr

ent

or-

gan

izat

ion

alm

odel

.”(S

outh

co-N

orth

co“P

rin

cip

les

ofO

rgan

izat

ion

and

Man

agem

ent”

)

Pri

nci

ple

.F

irst

offi

cial

use

ofth

ew

ord

“mer

ger”

and

elab

orat

ion

onit

sim

pli

cati

ons

byth

eS

outh

co-N

orth

coC

EO

ata

man

agem

ent

con

ven

tion

.

Acc

epta

nce

.M

ost

mid

dle

man

ager

san

dem

plo

yees

atS

outh

cosu

pp

orte

dth

en

ewap

pro

ach

toin

tegr

atio

n.

Acc

epta

nce.

Man

ym

iddl

em

anag

ers

and

emp

loye

esat

Nor

thco

un

der

stoo

dth

en

ewap

pro

ach

toin

tegr

atio

n.

Res

ista

nce

.Som

em

anag

ers

and

emp

loye

esat

Nor

thco

exp

ress

edre

serv

atio

ns

abou

tfa

irn

ess.

Dis

tan

cin

g.S

ome

Nor

thco

man

ager

san

dem

plo

yees

clai

med

that

the

bala

nce

ofp

ower

was

shif

tin

g.

Act

ive

sup

por

t.“S

ofa

rit

has

wor

ked

very

wel

l,an

dth

en

eww

ord

sli

ke“m

erge

r”an

d“f

aste

ned

inte

grat

ion

”w

ere

exp

ecte

dby

all.

”(S

outh

coin

tern

atio

nal

sale

s,H

Q)

Rea

son

edag

reem

ent.

“Ith

ink

we

[Sou

thco

]ar

efa

tter

than

they

are,

Im

ean

we

hav

em

ore

slac

k,so

we

can

give

them

mor

ere

sou

rces

and

tim

e,an

dw

ed

o.S

oth

efa

irn

ess

isu

nba

lan

ced

,by

def

init

ion

,d

ue

toth

eve

ryst

ruct

ure

ofth

ep

artn

ers.

On

all

pro

ject

s,w

ew

ork

for

them

...

.W

hat

wou

ldbe

mu

chfa

irer

onth

eir

sid

e,w

ould

beto

adm

itit

....

Th

ere

has

been

avi

deo

that

Ire

ally

app

reci

ated

.T

he

Nor

thco

com

mer

cial

vice

pre

sid

ent

than

ked

Sou

thco

for

hel

pin

gth

emto

ente

r63

3[S

outh

co]

clie

nt

firm

s.T

hat

was

grea

t.If

only

,as

reco

gnit

ion

for

thos

ew

ho

hav

ebe

enin

volv

edan

dco

ntr

ibu

ted

inth

isp

roje

ct.”

(Sou

thco

man

ager

,in

tern

atio

nal

sale

san

dm

arke

tin

g)

Bu

y-in

.“I

thin

kw

hen

you

look

atth

eeq

uit

y[s

har

ehol

din

g]p

rop

orti

ons

ofbo

thco

mp

anie

s,it

’s80

-20.

Bu

th

ere,

ever

yth

ing

ism

uch

mor

ein

bala

nce

(Nor

thco

B-t

o-B

man

ager

)

Dis

agre

emen

t.“S

outh

coC

EO

ind

icat

edth

atth

eeq

uit

yst

akes

are

80-2

0.T

his

shou

ldal

sobe

refl

ecte

din

the

dai

lym

anag

emen

t.W

ell,

then

you

know

wh

atw

ill

hap

pen

.”(N

orth

coem

plo

yee,

sale

s)

Cyn

icis

m.

“If

Ilo

okat

Nor

thco

and

Sou

thco

CE

Os,

it’s

clea

rw

ho

isth

ebo

ss.

Wh

enS

outh

coC

EO

ques

tion

sso

met

hin

git

’sa

‘no.

’L

etm

ep

ut

itth

isw

ay,

the

term

“Sou

thco

’sC

EO

Wat

ches

”al

read

yex

ists

.”(N

orth

com

anag

er)

Issu

e6—

Rea

lloc

atio

nof

cap

acit

yS

ense

spec

ific

atio

n.

Top

man

agem

ent

mad

ea

dec

isio

nba

sed

oneq

uit

yra

ther

than

pre

viou

sal

loca

tion

rule

sor

the

“bal

anci

ng

act.

”

Exe

mp

lary

dec

isio

n.

“We

now

see

Nor

thco

cap

acit

yth

aten

ters

the

Sou

thco

flee

t.If

this

isn

ota

pro

ofth

atw

ear

eab

leto

dev

elop

syn

ergi

esbe

twee

nu

s,th

enI

don

’tu

nd

erst

and

anyt

hin

gan

ymor

e.N

om

atte

rw

het

her

ther

ear

e3

Sou

thco

and

2N

orth

com

anag

ers,

thos

ear

ed

etai

ls[r

efer

ence

toth

eal

loca

tion

ofp

osit

ion

sas

agre

edin

the

‘bal

anci

ng

act’

;se

eth

ep

revi

ous

sect

ion

onp

osit

ion

sat

B-t

o-B

].B

ut

the

cap

acit

y,th

isis

tru

lya

stro

ng

sign

al.”

(Sou

thco

area

man

ager

,B

-to-

B)

Acc

epta

nce

.T

his

exem

pla

ryd

ecis

ion

was

stro

ngl

yad

voca

ted

bym

idd

lem

anag

ers

and

emp

loye

esat

Sou

thco

.

Res

ista

nce

.M

any

mid

dle

man

ager

san

dem

plo

yees

atN

orth

coex

pre

ssed

dis

agre

emen

t.

Dis

tan

cin

g.S

ome

peo

ple

atN

orth

coex

pre

ssed

fru

stra

tion

wit

hth

en

ewd

ecis

ion

s.

Act

ive

sup

por

t.“T

he

mos

tsp

ecta

cula

rac

com

pli

shm

ent

rece

ntl

yh

asbe

enth

en

ewca

pac

ity

that

arri

ves

inou

rfl

eet.

...

Nor

thco

had

ord

ered

this

cap

acit

y;in

fact

,w

eta

keit

inou

rfl

eet

and

leas

eit

from

Nor

thco

—I

mea

n,

rep

ain

ted

wit

hS

outh

coco

lors

.It

’sa

mar

kin

gev

ent,

itm

ean

sth

atw

eh

ave

been

able

toh

ave

suff

icie

nt

flex

ibil

ity

tota

kesu

cha

deci

sion

.”(S

outh

cosa

les

and

dist

ribu

tion

cont

rolle

r,A

mer

icas

)

Dis

agre

emen

t.“U

pu

nti

ln

ow,I

thin

kev

eryt

hin

gh

asbe

enfa

iran

dba

lan

ced

.How

ever

,we

are

now

goin

gin

ad

iffe

ren

td

irec

tion

.Ih

ave

the

feel

ing

that

dec

isio

ns

are

incr

easi

ngl

ybe

ing

take

nfr

omth

eS

outh

cosi

de.

Som

etim

esth

eyar

en

otth

atra

tion

al.F

orin

stan

ce,I

won

der

wh

atw

ill

hap

pen

wit

hth

en

ewca

pac

ity.

”(N

orth

com

anag

er,c

omm

erci

alsu

pp

ort)

Op

pos

itio

n.“

Aft

era

wh

ile,

you

beco

me

slu

ggis

h.T

hat

you

thin

kyo

uh

ave

fou

ght

you

rw

ar.”

(Nor

thco

com

mer

cial

man

ager

,B-t

o-B

)

Iron

y.“O

ur

cap

acit

y..

.Ih

eard

that

itw

ould

bere

turn

edaf

ter

18m

onth

s.L

et’s

see.

Iam

abi

tsk

epti

cal.”

(Nor

thco

emp

loye

e,B

-to-

B)

Issu

e7—

Inte

grat

ion

ofsa

les

offi

ces

Sen

sebr

eaki

ng.

Top

man

agem

ent

del

iber

atel

ybr

oke

the

imp

lici

t“m

ajor

ity

rule

”in

the

app

oin

tmen

tof

cou

ntr

ym

anag

ers.

Ru

lebr

eaki

ng.

“Ith

ink

it’s

too

earl

yto

thin

kth

atit

doe

sn’t

mat

ter

wh

ich

colo

r[c

omp

any]

isch

osen

.I

do

beli

eve

ith

asbe

ena

care

ful

and

del

iber

ate

choi

ceof

dir

ecti

on[t

och

oose

age

ner

alm

anag

erfr

omS

outh

cow

hil

sta

Nor

thco

rep

rese

nta

tive

was

exp

ecte

dto

beap

poi

nte

d].

”(N

orth

com

anag

er)

Res

ista

nce

.R

esis

tan

ceby

thos

eN

orth

coan

dS

outh

cop

eop

le(o

fal

lh

iera

rch

ical

leve

ls)

wh

oex

pec

ted

thei

rre

pre

sen

tati

veto

bese

lect

ed.

Dis

tan

cin

g.S

ome

peo

ple

exp

ress

edd

oubt

sw

het

her

fair

nes

sw

ould

befo

llow

edin

futu

red

ecis

ion

s.

Dis

agre

emen

t.“T

her

ew

asa

sud

den

chan

gein

pos

itio

ns.

My

opin

ion

isth

atth

ese

pos

itio

ns

are

not

base

don

com

pet

ence

.”(S

outh

cosa

les

agen

t)

Op

pos

itio

n.

“Ou

rco

un

terp

arts

,th

eyh

adth

eC

hri

stm

asd

inn

er,

last

wee

k,an

dth

ere

was

abo

ycot

t...

.O

nth

eS

outh

cosi

de,

they

did

n’t

show

up

.”(N

orth

cosa

les

man

ager

)

Qu

esti

onin

g.“I

t’s

risk

yan

dd

ange

rou

s:w

hat

ifth

eyw

ould

only

app

oin

tN

orth

cop

eop

le?”

(Sou

thco

sale

sag

ent)

Cyn

icis

m.

“In

the

end

,th

ep

ower

pre

vail

s.T

hat

’sth

eim

pre

ssio

nw

ege

t.A

nd

this

isal

sore

flec

ted

inth

efa

ctth

atth

ege

ner

alm

anag

erw

ill

bea

Sou

thco

per

son

.”(N

orth

coe-

com

mer

cem

anag

er,

Lon

don

)

ager put it as follows: “This year you could see forthe first time that the power relationships are mov-ing in the direction of Southco. This is for examplereflected in the new top management team. There isno balance anymore.” An IT manager at Northcosaid: “In the first years we had a honeymoon feel-ing. You now see that the focus on equality iscrumbling off. It will have its effects on ownershipand employment in both organizations.” This kindof discussion was also carried on when dealingwith operational integration, as illustrated below.

Issue 6—Reallocation of capacity: Sensegiving.As to operational integration, an important eventtook place in the B-to-B division. Years before,Northco had made a decision to invest in newoperational capacity. It was, however, decided thatthis capacity would not be used to expand theNorthco B-to-B fleet but would be transferred toSouthco. Top management justified this exemplarydecision by explaining that this capacity wouldcontribute more to overall results if put at work atSouthco. In this instance, top management movedaway from equality and instead emphasized thatdecisions should be made on the basis of what wasneeded to gain expected returns. By doing so, topmanagement abandoned the earlier sense of fair-ness, which had been defined exclusively as equal-ity, and opened the door to a more complex mean-ing of justice. As the new capacity would pay offmore for the merger group if used at Southco, thedecision put equity to the fore.

Sensemaking. Responses to the reallocation ofcapacity from Northco to Southco were very dif-ferent on the two sides. This decision was verymuch welcomed by the Southco employees, someof whom had been dissatisfied with the wayNorthco “had received favorable treatment” (seethe former period). However, not all people onthe Northco side appreciated this eminently sym-bolic decision. A Northco manager put it thisway: “An example that clearly shows everythingis going a bit more into the direction of Southco isthe new capacity that we are giving to Southco.It’s our investment.”

Issue 7—Sales offices: Sensegiving. Sales of-fices were another key area of operational integra-tion. Here, the purpose was to combine Southcoand Northco offices and rationalize sales and mar-keting processes in specific countries. Althoughthis integration was announced soon after themerger, it was not fully brought into effect until thesecond period. We studied the integration of salesoffices in the six largest European countries. Al-though three of the countries were clearly domi-nated by Northco from a commercial perspective,the other three cases were just as clearly Southco’s

turf. Integration of the sales offices implied a reduc-tion in the number of managerial positions and wastherefore watched closely. In appointments, it hadbeen initially agreed that the general managerwould come from the locally commercially domi-nant firm and the second in command would comefrom the other party. According to this “majorityrule,” the distribution of general management po-sitions was roughly proportional to the local mar-ket positions of the two companies, and the rulethat the second in command should come from theother company served to maintain balance; hencethe majority rule can be seen as a manifestation ofequality. This rule was applied as expected in thefirst four countries. However, decisions regardingthe fifth and sixth country broke the rule. ASouthco person (not a Northco one, as the rulecalled for) was appointed in the fifth case, and aNorthco manager (not a Southco one, as the ruleimplied) in the sixth one. Thus, the norm of equal-ity was replaced by equity in the sense that themanagers who were deemed more competent orotherwise more suitable from top management’sperspective were chosen for these positions regard-less of which side they came from.

Sensemaking. The breaking of the majority ruletriggered mixed responses in the merged organiza-tion. Initially, people were caught by surprise. Forexample, a Northco manager reacted as follows:“What happened in [the fifth case] is a strangemove, given the logic of the picture. People willcertainly question that.” Similarly, people on theSouthco side were astonished by the decision inthe sixth case. However, after these initial reac-tions, many lower managers and employeesshowed understanding for the need to “proceedfurther with integration” and to focus on “situa-tion-specific considerations.”

Enactment: Dominant norm, ambiguity, andalignment. We now explain how equity was en-acted as the dominant norms of justice and discussambiguity and alignment as well the implicationsfor the following period. The increasing focus onvalue creation triggered a change in that top man-agement pursued a new approach to integrationthat involved a shift from an explicit emphasis onequality between the merger parties to equity inrelation to the two parties’ contributions (issue 5).In a nutshell, the new principle was to allocateresources according to what the two parties de-served. This norm was enacted in the subsequentoperational integration issues exemplified by thereallocation of capacity (issue 6) and the integra-tion of sales offices (issue 7), although the interpre-tations of the new norm varied a great deal. Thedecision regarding the reallocation of capacity be-

272 FebruaryAcademy of Management Journal

came a symbol of the new approach, but the normitself was perceived differently by the two parties.Interestingly, it was generally thought that breakingthe majority rule in the integration of the salesoffices was a means for top management to increaseawareness about the importance of situation-spe-cific considerations when making integrationdecisions.

Initially, the focus on equity seemed to reducethe ambiguity regarding equality. Not only topmanagers but also many lower managers and em-ployees from both sides recognized that equity re-duced the ambiguity around equality: “It’s difficultto say that both our growth rates should be equal.You see that you get frictions [with that norm]. Iexpect that this decision [that equality would nolonger be the guiding principle] will change thingsin the future” (manager, communication, Southco).However, later on awareness of the ambiguityaround equity arose: “They now more often use theslogan ‘fair share.’ And yes, ‘fair share’ can be ex-pressed in different ways. If you look at the contri-bution to profits, it should be 50-50. But if you havea board of 13 people, and it’s 5 against 8” (manager,network planning, Northco). This ambiguity re-lated to equity became increasingly salient whenpeople reflected on the reallocation of capacity andgrew even more so with the breaking of the majorityrule. Thus, again concrete integration issues re-vealed problems in applying the norm promoted bytop management.

Although dissident voices could be heard, topand middle management’s sensegiving and mem-ber sensemaking about the new approach to inte-gration and its implications for justice remainedsignificantly aligned. However, in concrete deci-sions concerning the reallocation of capacity andsales offices, misalignment also emerged. This wasmost evident in increasing resistance and distanc-ing on Northco’s side: “I understood the first move[appointment of country managers] is a politicalone. But I hope in the second run we will look forthe best people” (sales manager, Northco).

Given all this, top management started to sensethat there was again a need for change. A middlemanager at Northco put it as follows: “I wouldprefer if they would not even consider where some-one comes from, but purely which person withwhat qualities comes at what position. Everybodyis ready to go to the next phase. And most peoplesay it is about time to start doing it like that.” Thispaved the way for a focus on efficiency in thefollowing period: “What we do most—and moreand more—is to look through a ‘group lens’ at theimpact of a change we want to make. . . . If we wantto add a new destination and Southco wants to do

the same, you can say ‘We were the first, so we willdo it.’ No, you need to look at that from a group, aSouthco-Northco perspective. And that’s happen-ing more and more” (director, network planning,Northco).

Period 3: Decreasing Emphasis on DistributiveJustice

Integration pressures: Value creation vs. socio-political concerns. We will now explain how thepressure for value creation increased and overrodesociopolitical concerns, leading to a pronouncedfocus on efficiency above everything else in thethird period. This period was characterized by ma-jor financial challenges due to external economicshocks. These shocks hit the whole industry andwere widely publicized: “Profits plunge underpressure from volatile [input] prices and fallingdemand” (newspaper article on Southco-Northco’sindustry). This led Southco to make a loss, and thegroup showed only a very small profit. All thisincreased pressure to create synergy, in particularin terms of more direct cost savings: “From nextfiscal year on, the cost synergies must take overfrom revenue synergies, notably in two fields [ITand procurement] that require a special attention”(EVP finance, Southco).

The sociopolitical concerns related to the rela-tionship between the merger parties became lesscentral. A country manager put it as follows: “[TheSouthco CEO] has defined it fantastically:five years of peace, no forced layoffs, buys youtime. . . . It’s a very well proceeding collaborationin that way, in all peace and without tumbling overeach other. . . . But I see that the cracks can comeinto the building if you don’t give sufficient sup-port to your collaboration. For instance, when salespeople in my team are in the market and have tolearn by heart two completely different policiesand use that in a sales talk, wait a minute, there issomething wrong.” Thus, top management rea-soned that they needed focus on efficiency, even ifit meant relegating concerns about the relation-ships between the two parties to the background.This was reflected in a matter-of-fact referral to theefficiency principle by a Southco manager whoacted as a liaison between the two companies: “Ofcourse those decisions regarding . . . the integrationof the purchasing and supply departments arebased on cost savings!”

Issue of justice. In the following, we will focuson the most important integration issue during thisperiod, the launching of the new organization bytop management, with accompanying changes inthe norms of justice. Table 4 provides detailed ex-

2013 273Monin, Noorderhaven, Vaara, and Kroon

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amples of the characteristic modes of sensegivingand sensemaking about justice during this period.

Issue 8—The new organization: Sensegiving.Top management launched a new organizationstructure as a way to improve efficiency in generaland to reap synergy benefits in particular. The neworganization—based on integrated functions andactivities—was communicated in various arenas toimportant internal and external stakeholders. Inparticular, top management explained the new ap-proach at an important management convention.All convention participants received a booklet en-titled “Southco-Northco Organization and Manage-ment” that provided the new principles of organi-zation with reference to an update of theintegration agreement: “The Integration Agreementnow gives us the opportunity to reshape the gover-nance and organization of the Group as the 3-year-initial period ends.” The central message was clear:“In all decision-making, the Group must focus onwhat will optimize the interests of Southco-Northco and the common bottom line.” This docu-ment cascaded through the organizational layersand served as a practical reference regarding func-tional integration. It is noteworthy that any directreference to equality had disappeared. Fairness wasstill mentioned a few times, but more as a generalaim of equity rather than as a specified principle.The message was clearly that efficiency concernswere to be given a much more prominent role thandistributive justice in guiding the integration pro-cess. Subsequent communication followed this pat-tern; for example, the Southco CEO was quoted inthe Northco company newsletter as follows:“Within the new organization, cooperation witheach other is based on mutual dialogue, looking forconsensus and fairness.” This did not, however,mark an end to the management of meaning. Sig-nificantly, top and higher management continuedto avoid any reference to “acquisition,” “domi-nance” by either party, or other images of an im-balance in power. This was considered extremelyimportant, as top management was very concernedabout any interpretations that would trigger inter-nal politics.

Sensemaking. It seemed that people throughoutthe organization understood the need to focus onefficiency. However, lower managers and organiza-tion members also expressed dissatisfaction withspecific decisions that were not favorable fromtheir perspective. Moreover, some people now ap-peared to be taking more distance from justice. Anincreasing number of people from both companiesstarted to question whether any norm of justicecould work as an overall governing principle. Even-tually, most of these critics came to share a com-

mon sentiment: power would eventually prevail,and Southco would dominate: “I think more andmore will be coming from [Southco’s head office],that development is already visible. The big jumpsare made over there. I think that makes sense. If youbuy a company you want to be the one decidingwhat to do with it” (country manager, Northco).

Enactment: Dominant norm, ambiguity, andalignment. We conclude by explaining how normsof justice received less attention than before and bymaking specific comments about ambiguity andalignment. As illustrated above, pressures toachieve efficiency prevailed over sociopoliticalconcerns in this period. This led top managementto launch a new organization model that radicallychanged the approach to integration. Because effi-ciency was emphasized, distributive justice re-ceived less attention. As a HR manager at Northcoput it: “I always distinguish between three phasesin this collaboration. The first phase is character-ized by coordination, the second phase . . . bycombination, and the third phase will be character-ized by integration. And with integration the no-tion of fair and balanced will disappear. What youdo then is creating organizational unity. And well,within an organizational unit fair and balanced isnot really a theme anymore.” Now any references tojustice related to equity; merit and competenceserved as the bases for integration.

As distributive justice received less attention, itremained ambiguous. This provided top manage-ment with increasing latitude in its decisions andactions. However, any decisions had to be justifiedin context, as the previous principles and rulesrelated to fairness no longer applied per se: “Amerger is a tsunami. It will progress whatever hap-pens. You never resist. You learn to swim” (topmanager, Southco). Finally, as noted above, peopleseemed to align with the new principles promotedby top management. At the same time, there was anincreasing disillusionment over the ability of anyprinciple to serve as an overarching norm for post-merger integration.

THE ROLE OF JUSTICE IN POSTMERGERINTEGRATION: A PROCESS MODEL OF

SENSEGIVING AND SENSEMAKING

The Southco-Northco merger reveals a pattern inwhich the focus on sensegiving and sensemakingmoved from equality to equity to less emphasis ondistributive justice. Although this revelatory casehas unique features, we argue that the pattern mayalso characterize other merger cases, especiallysymbiotic ones (Haspeslagh & Jemison, 1991). Inthe following, we develop a process model that

2013 275Monin, Noorderhaven, Vaara, and Kroon

explains how and why this pattern emerges andfacilitates understanding of the dynamics related tojustice more generally. First, we focus on the dia-lectics of value creation versus sociopolitical con-cerns that drive shifts in norms of justice over time.Second, we concentrate on the dialogical dynamicsof sensegiving and sensemaking that explain howexactly norms of justice are socially constructed ina postmerger organization. Third, we conclude bydiscussing three aspects of the enactment of normsof justice: the dominant norm of justice, the ambi-guity around the norms of justice, and the align-ment between managers’ and members’ interpreta-tions of justice. Figure 3 provides a summary of ourprocess model.

Dialectics of Value Creation and SociopoliticalConcerns

Postmerger integration involves pressures ofvalue creation and sociopolitical concerns. Thesepressures form a dialectical relationship—that is,they can be seen as opposing forces in organiza-tional change processes (Van de Ven & Poole,1995). Previous studies on interorganizationalforms have pointed to a central dialectic of effi-ciency and equity (Ring & Van de Ven, 1994), andour analysis adds to this research by demonstratinghow the dialectic of value creation versus sociopo-litical concerns drives shifts in norms of justice.

This becomes salient when we observe the shiftingemphases placed on the two sets of concerns overthe three time periods studied.

As our case illustrates, symbiotic mergers in-volve difficult sociopolitical challenges; dealingwith them has priority at the beginning of post-merger integration. These pressures often imply aspecial need to make sure that both sides are, inpractical and symbolic terms, treated as equals,leading to equality as the prevalent norm of justice.However, this focus may undermine realization ofthe full synergy potential. This was the case inSouthco-Northco throughout the first years of inte-gration, when top management pursued a cautiousapproach.

Over time, however, it becomes difficult to retainthis focus on equality as the dominant norm ofjustice. Pressure to create value tends to accumu-late in the course of an integration. As our caseshows, external changes in the business environ-ment may significantly add to this pressure. Inter-nally, equality may be difficult to maintain whenpeople continuously compare the standing of thetwo partners (Hambrick & Cannella, 1993); our caseprovides abundant evidence of this. Moreover, pre-occupation with equality tends to reproduce overtor covert conflicts between the two partners (whichis why Larsson [1990] developed his “equality/con-flict” approach). As a result of these external andinternal pressures, the focus tends to shift towardequity as an overall norm of justice.

FIGURE 3The Role of Justice in Postmerger Integration: A Dynamic Model of Sensegiving and Sensemaking

Feedback from Previous Issues and Phases of Integration

GIVING SENSE TO JUSTICE

• Sensebreaking • Sense specification • Sensehiding

MAKING SENSE OF JUSTICE

• Acceptance • Resistance • Distancing

Trigger Lead to DIALOGICALDYNAMICS

Sociopolitical concerns

DIALECTICAL DYNAMICS

INTEGRATION PRESSURES

Value creation ENACTMENT

OF NORMS OF JUSTICE

•

Dominant norm of justice

•

Degree of ambiguity •

Alignment

276 FebruaryAcademy of Management Journal

Finally, as integration proceeds, the need to fo-cus explicit attention on justice in terms of thedistribution of roles, responsibilities, and cutbacksbetween the two merger parties decreases. Thus,over time a need arises to move from distributivebargaining to value creation through integrativebargaining (Walton & McKersie, 1965). Organiza-tional changes also become less directly associatedwith postmerger integration with time, which fur-ther reduces the need to concentrate special atten-tion on distributive justice. This was the case inSouthco-Northco at the end of the third period. Thedialectics of value creation and sociopolitical con-cerns thus explain why there is a tendency to movefrom equality to equity to less attention to distrib-utive justice in postmerger integration. However,this explanation is not sufficient to understandhow exactly norms of justice are socially construct-ed—hence the need arises to examine the dialogi-cal dynamics of sensegiving and sensemaking inmore depth.

Dialogical Dynamics of Sensegiving andSensemaking

Justice is given sense to and made sense of indialogical processes (Boje, 2008; Tsoukas, 2009). Inits simplest form, “dialogicality” implies a dialoguebetween the sensegiving of change agents and thesensemaking of change recipients (Bartunek et al.,2006; Stensaker & Falkenberg, 2007). However, thisdialogue goes beyond direct social interaction be-cause managers’ sensegiving already presupposesand takes into account members’ sensemaking andvice versa (Sonenshein, 2010).

Sensegiving. Our case elucidates how managers’purposeful sensegiving contributes to the socialconstruction of the rules of the game in unfoldingpostmerger processes. Specifically, acts of sense-breaking, sense specification, and sensehiding steerthe course of integration and the social construc-tion of norms of justice. The analysis demonstratesthe crucial role of sensebreaking as a means touproot previously established norms of justice andto prompt a focus on new meanings. Analyses ofsensebreaking have highlighted its importanceelsewhere (Maitlis & Lawrence, 2007; Pratt, 2000),and Mantere et al. (2012) underscored its role in anM&A context. Our analysis follows these lines butfurther clarifies the way in which top managementcould significantly impact the course of integrationthrough problematization and rule-breaking deci-sions. In our case, top management’s discourses indocuments (e.g., the initial agreement on the rulesof integration) and in public and private speeches(e.g., at management conventions) paved the way

for change. In addition, decisions and actions thatbroke previously established rules steered thecourse of integration; this was most apparent in thesecond period in the case of the integration of salesoffices.

Sense specification was ongoing in the course ofpostmerger integration. There seemed to be a pat-tern according to which sensebreaking was oftenfollowed by a need to give more specific sense tojustice. As our summary tables illustrate, this sensespecification took different forms, ranging frommore abstract coining of principles to exemplarydecisions and actions, symbolization, and quantifi-cation. This sense specification could at times leadto increasingly shared meanings, while at othertimes the results were more ambiguous. Both topmanagers and middle managers engaged in sensespecification; this was especially the case in thefirst period, when middle managers both togetherwith top management and more independentlysought to give sense to equality. An example of thelatter was the balancing act document crafted byB-to-B management as a means of handling integra-tion on its own turf.

This case also demonstrates the importance ofsensehiding (silencing alternative discourses ormarginalizing particular voices). Although previ-ous research has hinted at its importance (Vaara &Monin, 2010), the role of sensehiding has not beensystematically examined. This is undoubtedly re-lated to methodological difficulties in examiningtaboos or the unsaid. Nevertheless, this case pro-vides ample evidence of the importance of deliber-ate and systematic sensehiding. For example, topmanagement focused extensively on “equality” and“balance” during the first years but deliberatelyavoided using the term “merger.” Later “fairness”was linked more with equity, and “the M-word”was reappropriated, but terms such as “takeover”remained taboo. This dynamic has a major impacton the vocabulary through which people are sup-posed to give sense of issues at hand, with con-straining and enabling implications.

Sensemaking. Member sensemaking plays acrucial role and determines whether norms of jus-tice are ultimately enacted. Our analysis highlightsthe various ways in which acceptance of the norms,resistance to these norms, or taking distance fromthem affected the course of postmerger integration.As could be expected from previous studies (e.g.,Marmenout, 2010), people’s reactions often variedaccording to their organizational membership, butat times divides cut across the organizationalboundaries. Thus, our study indicates that organi-zational sensemaking in postmerger integration ischaracterized by polyphony (Sonenshein, 2010)

2013 277Monin, Noorderhaven, Vaara, and Kroon

and ambivalence (Piderit, 2000) rather than bystraightforward compliance or resistance.

In many instances, the members of the organiza-tions tended to accept the rules of the game artic-ulated by management. This could mean activesupport or less active buy-in. In addition, peopleexpressed reasoned agreement, or mixed feelingsabout the issue at hand, but understanding for theunderlying norms of justice. This was the case forexample with the Southco people who were un-happy about the disproportionate influence ofNorthco but nevertheless accepted a partial “re-verse takeover.” This observation underlines theimportance of examining not only people’s percep-tions of justice—the traditional focus of organiza-tional behavior scholarship—but also their inter-pretations of the underlying norms.

At times, people resisted the decisions and/or theunderlying norms proposed. This resistance couldbe expressed more or less openly depending on theissue at hand. Frequently, especially those in man-agerial or expert positions could voice their con-cerns in disagreement. But our analysis also re-vealed active opposition, in how pockets of moreactive resistance emerged among specific groups ofpeople. In our case, examples of strong resistancewere rare, but more of them are likely to be found inmore controversial or less carefully managedM&As. Moreover, it is to be expected that self-censorship represses reporting of active resistancein interviews.

In addition to open resistance, organizationmembers distanced themselves from norms pro-posed by management, for example by questioningthe operationalization of norms or by expressingirony or cynicism. In fact, such distancing becamemore common toward the end of the observationperiod. For example, some people started to frameintegration management more as a “game” or evenpointed to the hypocrisy of management if the de-cisions and actions did not seem to follow mana-gerial discourse about fairness. This can be inter-preted as a sign that the management of the shiftfrom equality to equity did not completely succeedor, more generally, as an indication that it is verydifficult to live up to the norms of equality inpostmerger organizations. However, it can also beseen as dissatisfaction that paved the way for thedecreasing emphasis on distributive justice.

Enactment of Norms of Justice

These dialogical sensegiving and sensemakingprocesses lead to the enactment of norms of justice.Our model elucidates three aspects of the enact-ment of norms of justice: the dominant norm of

justice, the ambiguity around the norms of justice,and the alignment between managers’ and mem-bers’ interpretations of justice.

Dominant norm of justice (equality/equity). Ourcase analysis shows how norms of justice emergefrom a myriad of sensegiving and sensemaking acts.Thus, rather than casting norms of justice as uni-versal reference points, our model helps to explainhow they may be complex, ambiguous, and con-tested at any point of time. Nevertheless, our anal-ysis clearly demonstrates an overall pattern inwhich, over time, the dominant norm is first equal-ity; then, equity replaces equality; and finally, theexplicit attention given to distributive justice de-creases. On the one hand, this involves specific actsof sensebreaking, sense specification, and sense-hiding through which the actual meanings ofnorms are created. In particular, since justice wasinitially linked inextricably with equality, itneeded to be disavowed by sensebreaking whentimes changed. Subsequently, through sense spec-ification the new norm of equity was given moreconcrete content, and sensehiding was needed tosteer away from other interpretations. On the otherhand, the enactment of a new dominant norm ofjustice is crucially dependent on member sense-making that may be accepting, resistant, or distanc-ing. In particular, acceptance was needed to enactthe new norm of equity, but resistance could un-dermine some of the organizational implications.Interestingly, examples of distancing can be seen ascriticism, but they also pave the way for shifting toanother norm of justice.

Ambiguity. Our analysis also helps to explainthe role of ambiguity around norms of justice. Inparticular, our case elucidates the enabling andconstraining aspects of ambiguity around norms ofjustice. By so doing, it adds to previous studies thathave explored ambiguity from other perspectives(Denis, Dompierre, Langley, & Rouleau, 2011; Jemi-son & Sitkin, 1986; Risberg, 2001). Our analysispoints out that some ambiguity is needed to mobi-lize stakeholders with different interests and per-spectives (Denis et al., 2011). Indeed, most of theprinciples promoted by top management in ourcase remained somewhat abstract and subject tointerpretation. Interestingly, there is evidence thattop management also wanted to retain latitude bynot going too far in specifying the norms. By sodoing, they also emphasized their role as the ulti-mate decision makers vis-à-vis middle managers.

There is, however, a need for ambiguity reduc-tion to advance with concerted action in post-merger integration (Clark et al., 2010; Risberg, 2001;Vaara, 2003). In our case, a variety of efforts ofsense specification led to situation-specific under-

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standings and rules of thumb. In particular, middlemanagement needed to specify norms in order todeal with concrete issues of integration. Neverthe-less, when people are confronted with increasinglychallenging issues of integration, it becomes verydifficult for them to specify and apply particularnorms of justice. This in itself puts pressure onprevailing norms of justice and can ultimately leadto the development or emergence of new norms.This was the case at the end of the first period,when organization members were dealing with IT,and at the end of the second period, when theywere struggling with appointments of country man-agers. Thus, our analysis indicates that norms ofjustice almost inevitably involve ambiguity andthat this ambiguity should not be seen merely as away to manage meaning to win the support of var-ious stakeholders or as a problem to be solved withincreasing specification, but rather should be seenas an inherent feature of postmerger integrationthat both helps to advance integration and con-strains the actions of managers and other membersof an organization.

Alignment. Finally, our analysis of sensegivingand sensemaking helps to explain to what extentalignment about norms of justice between andamong managers and other organization mem-bers. By highlighting the myriad of sensegivingand sensemaking acts, our analysis illustrates thepotential for agreement and disagreement thatexists around any integration issue. In particular,our case shows how member sensemaking mayeither support (acceptance) or challenge (resis-tance or distancing) the attempts of managementto manage meaning or steer the course of integra-tion. By so doing, our analysis elucidates thecrucial role of norms of justice in the micropoli-tics of postmerger integration, which has re-ceived little attention in previous research(Graebner, 2004; Hambrick & Cannella, 1993;Vaara, 2003).

Our case demonstrates how, in the beginning ofthe first and second period, there was significantalignment regarding the norms of justice. In bothcases (the combination model and the new ap-proach to integration), organization membersmostly accepted the principles proposed by topmanagement, which facilitated further integra-tion. However, over time, with increasingly com-plex integration issues such as IT or the appoint-ment of country managers, there was lessalignment about the specific norms of justice andtheir application. Thus, the very basis for jointaction was undermined, showing in less success-ful efforts to integrate and paving the way forchange. In the third period, top management’s

decreasing attention to distributive justice metacceptance, as many members understood theneed to focus on value creation. Interestingly, thedistancing of others (disillusionment aboutwhether any norm could form the basis for futuredecisions) also contributed to the same outcome.Thus, our case analysis suggests that the decreas-ing attention to justice in the third period re-sulted not only from the increasing pressure forvalue creation, but also from the extended dia-logue between the actors. In all, alignment be-tween sensegiving and sensemaking around anorm of justice is a two-edged sword: perfectalignment optimizes integration under a givennorm, but it makes it very hard to switch to adifferent norm. The point is that only by exam-ining both managerial sensegiving and membersensemaking over time can one understand whythe promoted norms of justice form a basis withwhich to proceed with integration or not.

DISCUSSION AND CONCLUSION

This study elucidates the central role thatnorms of justice in general and distributive jus-tice in particular play as rules of the game inpostmerger integration. Previous research has ac-knowledged the importance of justice in post-merger integration (Ellis et al., 2009; Hambrick &Cannella, 1993; Meyer, 2001; Meyer & Altenborg,2007). We have demonstrated that in addition toa focus on perceptions of justice per se, attentionshould be paid to their temporal dynamics, tohow sensegiving and sensemaking about distrib-utive justice impact the course of postmerger in-tegration. We have concentrated on symbiotic(Haspeslagh & Jemison, 1991) mergers in whichdistributive justice is accentuated. Although ourcase has unique features, it reveals three post-merger integration phases that are likely to char-acterize symbiotic M&As: first, a period when theemphasis is on equality; then a period when thefocus shifts to equity; and finally a period whenexplicit attention to distributive justice de-creases. Thus, our case analysis demonstratesthat justice—together with related cultural (Vaara& Tienari, 2011), identity (Clark et al., 2010;Maguire & Phillips, 2008), and political (Ham-brick & Cannella, 1993) factors—is an inherentpart of postmerger dynamics that should be takenseriously to better understand the unfolding ofpostmerger organizational change.

This analysis helps explain some of the prob-lems and disappointments often experienced inM&As. An initial focus on sociopolitical con-cerns and equality helps to “sell” a merger to

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stakeholders and facilitate early integration ef-forts, yet it may eventually undermine the abilityto reap full synergy potential. However, whenpressure to create value mounts, managementneeds to shift the focus to equity. If done tooearly, too late, or too abruptly, such a shift maylead to problems, because employees’ expecta-tions are violated. Our analysis thus adds an ex-plicit processual explanation to the study of suc-cess and failure in M&As (Larsson & Finkelstein,1999; Stahl & Voigt, 2008).

The analysis of dialogical sensegiving and sense-making processes advances research on intergroupdynamics in postmerger integration more gener-ally. Studies of cultural dynamics (Vaara & Tienari,2011) and identity formation (Clark et al., 2010;Maguire & Phillips, 2008) have highlighted the mu-tual dependence of managerial actions and organi-zational responses in postmerger organizations.Our analysis complements these studies by eluci-dating how the very rules of the game are negoti-ated and how these negotiations lead or do not leadto alignment—with important implications for thecourse of postmerger integration. Thus, our studyhighlights a crucial but poorly understood aspect ofthe co-constructed nature of postmerger reality.

Our study also adds to the previous studies oncommunication, which have rarely elaborated onhow organizational interaction unfolds over time inM&As (Schweiger & DeNisi, 1991). The Southco-Northco case demonstrates how managers can steerthe course of integration by management of mean-ing (Graebner, 2004; Vaara & Tienari, 2011) andhow this involves not only conventional sensegiv-ing but a variety of modes such as sensebreaking,sense specification, and sensehiding. Furthermore,our analysis sheds new light on the crucial role oforganizational reactions, underscoring the polyph-ony and ambivalence (Piderit, 2000; Sonenshein,2010) characterizing these communicative pro-cesses. Importantly, although previous studieshave focused on communication as a means to re-duce ambiguity (Risberg, 2001; Vaara, 2003), ourcase clearly illustrates that at times ambiguity isneeded to deal with the pressures of postmergerintegration.

The central role of discourse in all this sensegiv-ing and sensemaking cannot be overstated. Ourcase adds to previous studies on management ofmeaning in the M&A context (Vaara & Monin, 2010)by demonstrating that mobilizing existing dis-courses, inventing new ones, and silencing alterna-tive ones is the essence of sensegiving. It also pro-vides ample evidence of the evocative power ofcatch phrases, metaphors, and other creative labels,such as “don’t go east” or “majority rule,” that are

coined by top managers but in many cases also byemployees. Furthermore, by focusing on the con-tinuous dialogue, our case helps to explain whyand how some of these discourses take while othersdo not.

Postmerger integration involves power and po-liticization (Graebner, 2004; Hambrick & Can-nella, 1993; Vaara, 2003). The Southco-Northcocase demonstrates how the social construction ofpower relations and norms of justice go hand inhand and often reinforce each other. In particu-lar, symbiotic mergers often bring with them ac-centuated expectations of equality and attentionto distributive bargaining (Hambrick & Cannella,1993; Walton & McKersie, 1965). Our case illus-trates how difficult it is to maintain a balance ofpower and what it implies to shift from equalityto equity. By offering this case, we complementprevious research focusing on the specific polit-ical challenges of mergers and mergers of equals(Hambrick & Cannella, 1993; Vaara, 2003).

Although we have focused on the M&A context,our analysis also contributes more generally to re-search on organizational justice. Existing researchhas shown that perceptions of justice impact em-ployees’ attitudes toward cooperation and behav-iors at work (Colquitt & Rodell, 2011; Greenberg &Cropanzano, 2001). However, much less is knownabout the social construction of norms of justice aspart of organizational change (Fortin & Fellenz,2008; Watson, 2003). We have highlighted hownorms of justice are socially constructed in organ-izational change processes. Specifically, we haveshed more light on one of the most central ques-tions in contemporary research on justice: how ex-actly norms of equality and equity complementeach other and change over time (Deutsch, 1985;Kabanoff, 1991). Extant justice research has fo-cused on reactive aspects of justice. In contrast, theproactive creation of norms of justice is poorlyunderstood, even though anecdotal evidence sug-gests that executives at the apex of radical organi-zational change such as an M&A purposefullychoose and promote specific norms of justice (Vla-sic & Stertz, 2000). By explaining how managersgive sense to justice, our analysis sheds more lighton the political power that rests with them as po-tential norm setters (Fortin & Fellenz, 2008). Fi-nally, by focusing attention on the dialogical pro-cesses of sensegiving and sensemaking, ouranalysis highlights the complexities, ambiguities,and contradictions around norms of justice thatconventional approaches often fail to recognize.

Our analysis reveals aspects of sensegiving andsensemaking that may be helpful in advancing amore nuanced understanding of the politics of sen-

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semaking, as has been called for in research onsensemaking (Maitlis & Sonenshein, 2010). In par-ticular, by distinguishing how sensebreaking, sensespecification, and sensehiding affect the dynamicsof organizational sensemaking in specific ways, ouranalysis adds to research on sensegiving. In ouranalysis, sensebreaking had a crucial role in steer-ing sensemaking toward new understandings.Thus, in the manner of Pratt (2000) and Mantere etal. (2012), our analysis underscores the fundamen-tal role that breaking previous understandingsplays in major organizational change such as M&A.It was also shown that various forms of sense spec-ification are needed to specify meanings. Further-more, our analysis elucidates how deliberate sense-hiding was an essential part of sensegiving—anaspect that has received little attention in previousresearch (see also Vaara & Monin, 2010). In addi-tion, by elaborating a range of organizational reac-tions from acceptance to resistance to distancing,we show that the effects of any sensegiving willdepend on sensemaking by organization members.Thus, this analysis elucidates both the power andpowerlessness of managers and, more generally,illuminates the role of political agency insensemaking.

Finally, all this also has implications for the pro-cess studies approach. Our analysis shows how thedialectics of value creation and sociopolitical con-cerns impact the course of postmerger integrationand how these contradictory pressures are givensense to and made sense of in ongoing dialogicalprocesses. Conceptually, both dialectics (Van deVen & Poole, 1995) and dialogicality (Boje, 2008)capture important aspects of the dynamic nature oforganizational change processes. However, an in-depth understanding of the process dynamics oforganizational change requires that attention focuson both the contradictory pressures (dialectics) andthe way in which organizational actors give senseto and make sense of these pressures (dialogicality).Our model is certainly not the only way to linkthese dynamics together, yet it does provide a po-tentially useful framework for analyzing processdynamics in other contexts.

Our findings are most relevant for symbioticcases (Haspeslagh & Jemison, 1991), especially forso-called mergers of equals (Meyer, 2001; Zaheer etal., 2003). Nevertheless, other types of M&A maywell involve difficult issues related to justice anddynamics that deserve special attention. For exam-ple, more straightforward takeovers and control-oriented integration approaches—“absorption”(Haspeslagh & Jemison, 1991), “redesign” (Napier,1989), and “control” (Larsson, 1990)—would likelyfocus more on value creation from the start, at the

risk of neglecting sociopolitical issues. How thesedynamics play out in different types of M&A is animportant challenge for future research. Moreover,given the revelatory nature of our case, the role ofjustice may have been accentuated more than inother circumstances. Thus, our findings need to becompared with other cases.

Although distributive justice is arguably the cen-tral tenet of justice in symbiotic M&As, other as-pects, such as procedural justice, informational jus-tice, and interpersonal justice (Colquitt et al.,2001), deserve attention in future research. Further-more, there is a need to extend the analysis of theintergroup dynamics uncovered in this study. Inparticular, studies could elaborate on the crucialrole of middle managers as boundary spanners (Ba-logun & Johnson, 2004; Rouleau, 2005). It wouldalso be interesting to examine in more detail thediscursive dynamics identified in our analysis. Fi-nally, as this analysis has shown, dialogical analy-sis has the potential to uncover important processdynamics in organizational change, and we hopethat this study will be followed by new ones, bothin M&As and in other contexts.

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Philippe Monin (monin@em-lyon.com) is the TOUPAR-GEL Chair Professor of Strategic Management and vicepresident of research at EMLYON Business School. Hereceived his Ph.D. at Université Jean Moulin Lyon III. Hiseclectic research interests focus on postintegration pro-cesses in mergers and acquisitions, market building inBoP markets, institutions and social movements, andmarkets for critical opinion.

Niels Noorderhaven (n.g.noorderhaven@tilburguniversity.edu) is a professor of international management and thedirector of the Center for Innovation Research at TilburgUniversity. He received his Ph.D. from University ofGroningen. His research focuses on (international) cooper-ation in business, with a special interest in human factorsand learning. His current research focuses on justice andidentity in interorganizational collaboration and in mergersand acquisitions, and on the social construction of percep-tions of interests.

Eero Vaara (eero.vaara@hanken.fi) is a professor of man-agement and organization and the dean of research atHanken School of Economics in Helsinki and permanentvisiting professor at EMLYON Business School. He re-ceived his Ph.D. at Helsinki School of Economics. Hisresearch interests focus on strategy and strategizing, or-ganizational change, multinational corporations and glo-balization, management education, and methodologicalissues in management research. He has worked espe-cially on discursive and narrative perspectives.

David Kroon (d.p.kroon@vu.nl) is an assistant professorof strategic management at the Faculty of Economics andBusiness Administration of VU University Amsterdam.He received his Ph.D. from Tilburg University. His cur-rent research focuses on interorganizational collabora-tion, organizational change, and postmerger integration,with a particular emphasis on identity/identification,justice, culture, communication, and trust.

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