in Mergers and Acquisitions
6.3 DATA COLLECTION
6.3.1 Sampling Time, Business Areas, Divisions and Sites Sampling time
According to Pettigrew (1990) time sets a reference for what changes can be seen and how those changes are explained. A good illustration of this phenomenon was explored in chapter four where the preliminary fmdings in the DnB-study were discussed. Here I argued that because the merger process was executed in two steps, studying the initial phase would only have given me half the picture. A discussion ofhow time was sampled in my study is presented in the third section on data collection.
I have chosen to cover the process by collecting real time and retrospective data at two points in time with one and a half and two years intervals in the two studies.
Collecting data twice had some interesting implications for my interpretations of
the data. Inthe first data collection in the DnB-study for example, I collected retrospective data about the pre-merger and initial combination phase and real time data about the second step in the combination process.
Although I got a picture ofhow the employees experienced the second stage of the combination process it was too early to assess the effects ofthis process at that stage. To do that I entered the organisation two years later and found interesting effects that I had not predicted the first time. Moreover, it was interesting to observe how people's attitudes towards the merger processes changed over time to be more positive and less emotional.
Itwould be desirable to have had the opportunity to collect data in the
pre-combination processes. However, it is very rare that researchers are given access in this period. Inany case, the secrecy that often characterises this phase implies that one is often not aware of what is happening until the public announcement. Inthe DnB merger for example, only a small group ofkey people in the bank and the authorities were informed at the pre-merger stage.
The emphasis in this study though, has been to focus on the post-combination process. As such the pre-combination events have been classified as contextual factors. This implies that it has been of foremost importance to collect real time data after the parties have been given concession to merge or acquire.
What would have been desirable would have been to get access earlier in the post-combination process. One reason why there is a time lag between the authorities' concession and the first data collection is the time needed for negotiating access. In the DnB-study this was further delayed by the change of CEO in the middle of the process. However, we were fortunate enough to follow the merger process through another project on the Norwegian banking crisis where we interviewed some of the key participants in the bank.
Regarding the second case I was restricted by the time frame of my dissertation.
Hence, I had to choose between entering the combination process as soon as a concession was given or entering the organisation at a later stage. Inthe light of the previous studies in the field that have failed to go beyond the initial two years, and my need to collect data about the cultural integration process, I chose the latter strategy.
In Table 6.2 below I have listed the periods of time in which I collected data in the two combinations.
Table 6.2. Data Collection Periods for Studying the Two Combinations Bergen Bank - DnC Gjensidige - Forenede Announcement of intention to October 1989 December 1991 merge/acquire
Concession granted by the February 1990 June 1992 Norwegian government
First data collection Autumn 1991/ Winter 1993/
Winter 1992 Spring 1994
Second data collection Spring 1994 Autumn 1995
Sampling business area, divisions and sites
In both DnB and Gjensidige I chose to concentrate on the core businesses. In DnB this implied restricting the data collection to the traditional banking activities in Norway, thus excluding subsidiaries and foreign offices. Similarly, I chose to concentrate on the traditional insurance businesses in Gjensidige. I collected some data on Gjensidiges fmancial intermediaries, but chose to leave this out in the analysis to streamline and simplify the case description.
Secondly, I chose to focus on the divisions that had been most affected by the integration process. This implied that the parts of the organisations that were mildly affected or not at all.
When choosing sites the main emphasis was on the head offices where the most important decisions were made and most people affected. In addition I chose to visit a number of the regional offices to get the local middle managers' perspective into the' analysis. In DnB I visited 8 regional offices selecting a mixture of former DnC and DnB managers and the offices most affected. In Gjensidige I visited three regionaloffices but went somewhat deeper in interviewing more than one person in each site.
6.3.2. Data Collection Methods
The triangulated methodology provides stronger substantiation of constructs and hypotheses and is in line with the case study approach which typically combines
data-collection methods such as archives, interviews, questionnaires and observations (Yin, 1989).
I used three data collection methods; in-depth interviews with key informants, documentary and archive data and observational material. Inthe following
paragraphs I will discuss the data collection methods and their contribution to the study.
Interviews
Use of the key informant interviews has been the most important data collection method throughout both studies. These interviews have provided me with depth, subtlety and personal feeling (pettigrew, 1990).
Inline with the explorative character of my study the goal of my interviews has been to see the research topic from the perspective of the interviewee, and to understand why he or she came to have this particular perspective. To meet this goal King (1994) recommends that one has "a low degree ofstructure imposed on the interviewer, a preponderance of open questions, a focus on specific situations and action sequences in the world of the interviewee rather than abstractions and general opinions." Hence, the collection of primary data in this study consists of unstructured interviews.
King (1994) suggests three sources oftopics to be included in the interview guide:
the research literature, the interviewer's own personal knowledge and experience in the area, and the informal preliminary work such as unstructured discussions with people that have personal experience of the research area.
Inthe first phase of the DnB-study (see Table 6.2 above) I used the organisational stream of merger and acquisition literature and important internal documents concerning the combinations as input to the guide used in the interviews. As the interviews continued, the guide was revised and new elements added. Inthe study of Gjensidige and in the second stage of data collection in both cases I used the experience of the previous study as input.
Each informant received an introductory letter from the company presenting me as the researcher and the purpose of the interview. Moreover, an interview guide that gave a review of the most important issues to be raised in the interviews was sent to most informants.
In the first data collection in DnB I carried out twenty interviews. In the second data collection I held another twenty interviews, among them seven people who I had interviewed before and ten middle managers. See Table 6.3 below.
In Gjensidige I held 29 interviews in the first data collection. In the second data collection I interviewed six people for the second time in addition to three interviewees who were new informants. See Table 6.3 below.
Using the key informant approach implies that I as a researcher use participants as observers and interpreters of the integration process (Vande Ven and Huber, 1990).
The investigator as user of participants faces the problem of identifying the best key informants and ensuring that they correctly understand the investigator's queries and that they provide understandable answers (Leonard-Barton, 1990).
Following the desire of depth and studying sub-groups, my aim has been in line with Pettigrew (1990) to apply a pluralist view describing and analysing competing versions of reality seen by actors in the combination processes.
I have used four criteria for sampling informants. Firstly, I have drawn informants from populations representing multiple perspectives. Secondly, I have used multiple informants within each sub-group to test the validity of the reports.
Thirdly, I have concentrated on selecting mainly key informants because oftheir lead role in the organisation or role in the combination process. Fourthly, I selected some informants that did not participate in the integration projects.
As mentioned above, few studies in the merger and acquisition literature go beyond the top management level, and many studies only have data from one of the parties involved in the combination. Moreover, the literature has to a large extent failed to investigate the sub-cultures in the combinations. I responded to these weaknesses by selecting informants from three levels in the organisation, from both parties and from severallocations. The distribution of interviewees is outlined below.
The first data collection in DnB was primarily focused on the top management level. Moreover, most of the middle managers in the first data collection were employed at the head offices either in Bergen or Oslo. This was compensated in the second data collection when I included 8 local middle managers in the sample. The difference between the number of employees interviewed in DnB and Gjensidige is
primarily due to the fact that Gjensidige has three unions whereas DnB only has one.
Table 6.3 Distribution of Interviewees
DnB DnB Gjensidige Gjensidige
Phase 1 Phase 2 Phase 1 Phase 2
Level of organisation - Top management!
board 13 7 10 5 35
- Middle management 4 10 8 2 24
- Union rep. and
employees 3 3 11 2 19
Organisational affiliation
- Acquirer 10 7 15 4 36
- Acquired company 9 11 12 5 37
- Neither 1 2 2 5
Localisation
-Oslo 13 12 11 3 39
- Bergen 6 2 8
- Trondheim 10 3 13
- Localisations outside
headquarter cities 1 6 8 3 18
20 20 29 9 78
The second criteria was to use multiple informants. According to Glick et al.
(1990) an important advantage ofusing multiple informants is that the validity of information provided by one informant can be checked against that provided by other informants. Moreover, the validity of the data used by the researcher can be enhanced by resolving the discrepancies among different informants' reports.
Hence, I selected multiple respondents from each perspective.
Third, I chose to focus on key informants who were expected to be knowledgeable about the combination process. These people included top management members and managers and employees involved in the integration project.
To validate the information from these informants I also interviewed managers and employees that had been affected by the process but were not involved in the project groups.
In both cases I used contact people within the companies to help me select the key informants. In addition I used snowball sampling, asking for names of possible interviewees from the informants.
Morse (1994) claims that the quantity, validity and reliability of the data are grounded in the skills of the investigator to establish relationships with informants.
"They are achieved through an extended, trusting, and confidential relationship between the investigator and the informants ..." (p. 286). Furthermore, Leonard-Barton (1990) claims that in longitudinal studies, delegating data-gathering leads to unacceptable losses in the investigator's grasp of important details.
Fortunately, I had the opportunity to follow the cases from the first data collection in DnB in 1991 to the last data collection in Gjensidige in 1995. The majority of the interviews were tape-recorded and hence I could concentrate fully on asking questions and responding to the interviewees' answers. In the few interviews that were not tape-recorded, most of which were conducted in the first phase of the DnB-study, I was fortunate enough to have another researcher present. This was useful both to be able to discuss the interviews later and to be given feedback on my role as an interviewer.
In hindsight however, I wish that these interviews had been tape-recorded despite the fact that we were two researchers present. Hence, in the next phases of data collection I tape-recorded all the interviews with two exceptions. These exceptions were people who strongly opposed the use of this device. All the interviews that were tape-recorded were transcribed by myself in full, and this provided me with closeness to and a good grasp of the data.
Documents
In Table 6.4 below I have listed the types of documents used in the analysis.
InGjensidige I had my own copies of all the documents listed. InDnB I was not allowed to bring some of the documents listed with me, and as such I spent a number of days in the bank reading and taking notes. The advantage of this
approach was that I got to know the people working in this part of the bank and met some of the people whom I later interviewed. In Gjensidige I used the same
approach when copying some of their documents for my own use. All the
documents I requested were provided, both in DnB and Gjensidige, apart from one document in DnB that had been subjected to selective deposit.
The documents were helpful in a number ofways. First and most importantly, the documents were used as inputs to the interview guide and saved time since I did not have to ask for facts in the interviews. The documents were also useful for tracing the history of the organisations and statements made by key people in the
organisations. Third, the documents were helpful in counteracting the biases of the interviews.
Table 6.4 Documents Used in Analysis of the Combinations
Gjensidige DnB
Strategic plan for 2000 McKinsey reports from the pre-merger phase Reports from the integration project groups Reports from the integration project groups Report from the recruiting committee Guidelines for selecting and positioning in 1990
Internalletters Minutes from top management integration
groups
Letters to the Norwegian authorities Written submissions for the concession
Declaration of intentions application
Internal job announcement magazines Merger prospect Report from employee survey Articles from the press
Internal newsletters Annual reports
Articles from the press Publications and documents from the banking
Annual reports crisis projects
Acquisition prospect Union magazines
Publication from the Association of Norwegian Insurance Companies
Direct observation
The major strength of direct observation is that it is unobtrusive and does not require direct interaction with participants. Moreover, one has the flexibility to yield insights into new realities or new ways of looking at old realities (Adler and Adler, 1994).
Observation produces rigour when it is combined with other methods. By
providing the researcher access to group processes, direct observation can confront the researcher with discrepancies between what people said in the interviews and causal conversations, and what they actually do (pettigrew, 1990).
The problems of observational research lie in the area ofvalidity, i.e. observers are often forced to rely exclusively on their own perceptions (Adler and Adler, 1994).
The are four modes in which an observer may gather data. These include (1) the complete participant who operates covertly, concealing any intention to observe the setting; (2) the participant-as-observer, who forms relationships and participates in activities but makes no secret ofhis intentions to observe events; (3) the observer-as-participant, who maintains only superficial contact with the people being
studied; and (4) the complete observer, who merely stands back and eavesdrops on the proceedings (Waddington, 1994).
This study makes use of the second and third mode. The use of the participant-as-observer mode which a lot of ethnographic research is based on, is rather limited in this study. There are three reasons for this. Firstly, the time available for collecting data was limited, and my judgement was that interviews made more effective use ofthis limited time than extensive participant observation. Secondly, people were rather reluctant to let me observe these political and sensitive processes before they knew me better and felt they could trust me. I was dependent on starting the data collection before having built sufficient trust to observe key groups in the
integration process.
Nevertheless, Gjensidige gave me access to study two employee seminars to acquaint myself with the organisation. Here I admitted more role as an observer but
participated fully in the activities.
Regarding the third mode, observer-as -participant, I attended a top management meeting at the end of the first data collection in Gjensidige and observed the respondents during interviews and in more informal meeting such as lunches. All these observations provided me with an opportunity to validate the data from the interviews.
Interestingly, both DnB and Gjensidige started to open up for more extensive observation when I was about to leave Norway. By then, I had built up the trust needed to undertake this approach. Unfortunately, this came a little late for me to take advantage of it.