In her doctoral thesis, Mélanie Raukko M.Sc (Econ.) examines how the commitment of an acquired company's employees should be taken into account in cross-border acquisitions. In knowledge-intensive acquisitions, the departure of the acquired company's key personnel can influence the success of the acquisition. Cross-border acquisitions often bring with them challenges related to cultural differences, which must be overcome. This doctoral thesis is in the field of international business, and is titled Key persons’ organisational commitment in cross-border acquisitions. It will be defended at the Turku School of Economics on the 11th of December 2009.
The number of cross-border acquisitions and the value of individual transactions has increased considerably in recent decades. Internationalisation, technology and expertise increasingly serve as motives for such acquisitions. The commitment of skilled key personnel is of the utmost importance in order to guarantee the success of an acquisition. Acquisitions are often followed by organisational restructuration, and uncertainty about the future and jobs often makes the best people seek other alternatives.
This thesis examines how the key persons in an acquired company can be committed to the new organisation. The research data was collected over a two-year period using questionnaires and interviews in an Indian IT company, which acquired a company in Europe.
During the acquisition process various key persons may be involved and they may change during the process. Key persons may, for example, have technical expertise and knowledge of the local culture and market. They may be technical experts or good managers, but it is the right attitude that makes them key persons.
– An acquisition may create a need for new key personnel. The most important key persons are those who can commit to the newly merged company and to its new objectives, says Mélanie Raukko.
Individual needs
People commit to an organisation, not only for financial incentives, but also for the working environment and interesting work. For a company's key persons the chance to have an impact, future prospects and career paths are particularly important.
– The acquiring company must understand the motives of the acquired company concerning the acquisition, so that the personnel in the acquired company can be motivated and their expectations met. As the integration proceeds, the slow realisation of synergies and the prolongation of the integration process can threaten commitment, says Raukko.
There is no patented solution to commitment - different people commit to different things. In acquisitions, the key persons who should be retained in the company and committed to the new organisation must be identified in good time. In that way, the most effective means of committing them can be found.
Cultural differences must be taken into account
In acquisitions, how the position of key persons changes in the company must be taken into consideration. For example previous owners become ordinary salaried employees, whose responsibility and role in the larger organisation are more limited. In such a case, the factors that affect commitment may change radically.
According to the research, the most challenging aspects of commitment are the cultural differences related to it. What commits employees in India does not perhaps work in Europe. Also the concept of key persons varies from one culture to another. In India they are used to an annual employee turnover rate of up to 25 percent, whereas in Europe it can be nearer to 3 percent.
– Modern technology offers many ways to shorten geographical distance, but face-to-face meetings and interaction are still the most effective way to overcome culture-related challenges. Visits by the managers from the parent company and the effective management of integration also convey the commitment of the parent company to the new subsidiary, which can also be a factor in committing key personnel, says Mélanie Raukko.
Mélanie Raukko: 
Key persons’ organisational commitment in cross-border acquisitions