Trust dynamics in acquisitions: The role of relationship history, interfirm distance, and acquirer's integration approach

Abstract

Drawing on the trust literature and research on sociocultural integration in mergers and acquisitions (M&As), we develop a model of the antecedents and consequences of trust dynamics in acquisitions. The model proposes that target firm members’ perceptions of the acquiring firm management's trustworthiness are affected by the relationship history of the firms, the interfirm distance, and the integration approach taken by the acquirer. Ability, benevolence, integrity, and value congruence perceptions are proposed to converge into a generalized trust judgment or result in a state of ambivalence, depending on whether the trustworthiness attributions are consistent or conflicting. The model explains the mechanisms by which trust and ambivalence may affect a variety of attitudinal and behavioral outcomes. A number of testable propositions are derived from this model, and the implications for M&A research and practice are discussed.

Citation

Stahl, G.K. and Sitkin, S.B. (2010), "Trust dynamics in acquisitions: The role of relationship history, interfirm distance, and acquirer's integration approach", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers and Acquisitions, Vol. 9), Emerald Group Publishing Limited, Leeds, pp. 51-82. https://doi.org/10.1108/S1479-361X(2010)0000009006