The human side of mergers and acquisitions: understanding and managing human resource integration issues.

Understanding and Managing Human Resource Integration Issues

Mergers and acquisitions increased exponentially in the 1980s and are expected to continue at a strong pace in the 1990s and into the next century. Most mergers and acquisitions are premised on the belief that the combined company

will have greater value than the two companies alone. According to Mirvis and Marks (1992), most companies executing acquisitions have done a reasonably good job sizing up the economic and financial characteristics of the takeover. Typically, the dealings are led by the two companies' top executives, some directors, investment bankers, lawyers, and third parties close to one or another of the firms. Their primary concerns are legal and financial - how much a company is worth, what terms to negotiate, how to structure the transaction, and how to get regulators to go along with it. Balance sheets are scrutinized, projections of demand and capacity are studied, and cost-cutting requirements are at the forefront of consideration. Most of the analysis concerns valuation and the financial contours of the deal.

Yet the ultimate success of the deal may depend on how well the acquirers manage the difficult organizational and human resource integration issues at their newly purchased company. For example, sometimes interpersonal conflict can emanate from the top of an organization when key executives cannot agree on a general corporate direction. More often, interpersonal conflict arises because corporate staff and division managers have differing perspectives on what their company wants (and needs) from a merger. If these human resource issues are not resolved, they can result in the turnover of key people, people refusing assignments, post-merger performance drops, and morale problems.

This paper describes an approach that can be used by human resource development professionals to understand and resolve interpersonal conflicts that are likely to crop up during mergers and acquisitions, as well as other major organizational changes. The acquisition of Apollo Computer by the Hewlett-Packard Company (HP) is used to discuss the application of this approach.

Hewlett-Packard Acquires Apollo Computer

Financial "Fit." On April 12, 1989, the Hewlett-Packard Company acquired Apollo Computer for $476 million. The Palo Alto, CA-based Hewlett-Packard company is one of the largest U.S. computer makers, with 1988 sales of $9.8 billion. The Chelmsford, MA-based Apollo Computer pioneered the technical workstation market, but lost its lead to Sun Microsystems Inc. of Mountain View, CA, the number one workstation maker, and Maynard, MA-based Digital, the second largest. The merger of number-three HP and number-four Apollo catapulted Hewlett-Packard past Digital and just slightly ahead of Sun in the $4.1 billion workstation market, the fastest-growing segment of the computer industry (Wilke, 1989).

The financial reason for the acquisition can be traced back to the mid-1980s, when HP found its customers favoring computer workstations over its computer products. Accordingly, HP did develop a line of workstations, but trailed pioneers Apollo and Sun Microsystems in technology leadership and market penetration. In early 1988, the Workstation Group in HP committed itself to a "must win" strategy to gain market share. Internal analysts reviewed research and development (R&D) capability and recommended investment in networking and graphics. Meanwhile, HP's head of Corporate Development looked into joint ventures and possible acquisitions (Mirvis & Marks, 1992).

During this period, Apollo was racked with profit problems. Undercapitalized, with R&D departments pulling in different directions, the company was at risk of losing customer confidence. Still, Apollo was very cool when first contacted by HP and other potential suitors. Undeterred, Corporate Development and Workstation management personnel formed an acquisition team to look closely at the financial and strategic implications of buying Apollo. Their analysis showed that the acquisition of Apollo would add to HP's market position, offer a short-term competitive advantage in graphics and group computing, and shore up Apollo's financial stability and reputation. There would also be financial synergies: reduced overhead costs and some tax benefits.

Hewlett-Packard completed the Apollo acquisition in May 1989. At that time, Apollo became a wholly owned subsidiary of HP. Apollo's chief executive, Thomas Vanderslice, said the deal was "made in heaven for the employees, customers and shareholders, a win-win-win situation" (Edelman, 1991). Industry observers applauded the HP-Apollo merger as an exceptionally good fit of business strategies, products, and customer bases, creating a new leader in the fast-growing workstation segment of the computer market (Levine & Helm, 1989).

But two years after the merger, Hewlett-Packard found the workstation business something less than heavenly. HP got bogged down by product delays and the problems of merging two organizations divided by 3,000 miles and radically different corporate cultures. With crucial momentum lost, Apollo yielded its leading position to Sun Microsystems. Hewlett-Packard executives pleaded guilty to underestimating the difficulties of melding two different organizations and cultures (Edelman, 1991).

Organizational "Misfit"

There were a number of organizational and cultural fit issues that resulted from the HP and Apollo merger. Various groups within HP developed plans for customer retention, employee retention, and product integration. For example, HP's human resource function led a study of compensation practices and previewed employment levels in the combined companies. HP's engineering employees took responsibility for further studying technological integration. And, HP's workstation management team developed plans to combine product lines and marketing directions. In the crucial areas of organization and culture, however, the workstation management team decided to defer this activity until after the merger (Mirvis & Marks, 1992).

HP's failure to develop a plan for integrating the two organizations and cultures created an analytic vacuum that was subsequently filled with dilemmas and conflicts. One dilemma that created conflict revolved around different philosophies on how to compete in the marketplace. HP prided itself on solid engineering, marketing, and service. Its product's selling points were quality and reliability backed by the company's fine reputation. Apollo, by contrast, competed through state-of-the-art technology delivered first-to-market. Product defects were commonplace and user complaints were legion. Still, engineers saw themselves as making products for "techies," who would adapt them as needed, not to "backoffice" types.

Another dilemma that created conflict arose around the operation of the business. Apollo defined itself as a "systems integrator" that brought products to market through close-knit work teams. Apollo's modus operandi was crisis management and the norm was to beg, borrow, and steal resources in order to advance the work team's agenda. Thus, Apollo's style was entrepreneurial and the atmosphere was rough-and-tumble. People were expected to "get in somebody's face" in the case of conflict, and loyalty to the team was sacrosanct. And, while "win-win" decisions were preferred, "win-lose" was acceptable (so long as you won).

By comparison, HP was more of a "components" company with various "entities" assigned parts of a project and kept on stream through the company's management-by-objectives plans. HP was driven by processes and procedures that were fine-tuned to efficiently solve problems. HP people seemed to Apollo to be very polished, professional, and company-minded. They were described as polite and collegial at initial meetings. (No one would raise their voice or confront another person directly.)

Mirvis and Marks suggest that ultimately, these types of dilemmas were translated into stereotypes on both sides. HP people were seen as highly specialized in professional niches and quite able in technical areas. Yet they seemed to Apollo anyway - as rather homogenous. Of course, many had long tenure and been socialized in HP corporate philosophy, known as "the HP way." By contrast, Apollo people were generalists and more apt to be conversant with a broader range of technical and business issues. Many were also job-hoppers who had trouble fitting in with large organizations.

Interpersonal Conflict Occurs

How, then, can human resource development professionals help to improve the integration experience as well as resolve interpersonal conflicts that are likely to crop up when organizational and cultural "misfits" between two companies exist? To answer this question, the organizational "misfits" experienced by Apollo and HP professionals while merging human resource and payroll information systems will be used as the context for discussing a human resource approach for understanding and resolving interpersonal differences.

Early in July 1989, Apollo learned that the conversion to HP's human resource and payroll information systems had to be completed by January 1, 1990. Individuals from each company were responsible for different aspects of the systems conversion process. For example, HP's corporate payroll manager was responsible for installing the payroll system at Apollo. HP's corporate human resource manager was responsible for the installation of HP's human resource system. Apollo's human resource manager was responsible for coordinating the replacement of Apollo's human resource and payroll processes as well as training existing employees on HP's procedures. And Apollo's information technology manager was responsible for converting and loading Apollo's existing information into HP's systems as well as assisting with the loading of HP's software onto Apollo's computers.

In August, HP's conversion team held a joint planning meeting with Apollo's conversion team. By October, Apollo's human resource and payroll systems conversion activities had come to a grinding halt. Interpersonal conflicts existed within Apollo's conversion team as well as with HP's conversion team members. The following organizational and cultural "misfits" help to illustrate why these interpersonal conflicts occurred.

Environment. In the earliest days and months following the HP-Apollo merger, the organizational environment within Apollo was very unsettled. With the completion of the acquisition, HP announced that the former Apollo chairman and chief executive officer, Thomas A. Vanderslice, had left the company along with Richard P. Bond, Apollo's senior vice president and chief financial officer. HP then announced that" . . .of the 500 headquarters-based employees at the Apollo division, about 150 people hold positions that are not normally needed in a product division. HP will try to place these individuals elsewhere within the company. Those who can't be placed will leave the company with a minimum of three months' salary and other severance benefits" (Hewlett-Packard, 1989).

During the systems conversion project, a number of Apollo's human resource, payroll, and information systems employees held positions that were no longer needed in an HP product division. Those employees associated with the HP-Apollo systems conversion project were asked to stay on in a transitional status for an additional six months. They would then receive severance packages and leave the company. The uncertainty created by merger changes placed these individuals in a stressful situation which ultimately affected their perceptions and judgments, interpersonal relationships, and the dynamics of the HP-Apollo systems conversion team.

Strategic Planning. Hewlett-Packard was a $9 billion multidivision business with 90,000 employees. Its workstation group was only one part of a larger business sector that included personal computers, peripherals, and other product lines. That sector was nested in the computer business organization that had separate arms for human resources, payroll, manufacturing, networks, marketing and sales, and international operations. Apollo, by comparison, was a $600 million standalone business with 4,000 employees. It was organized by function, and these functions were closely tied together.

A strategic function-to-function mapping to determine process and organizational changes required to implement HP's human resource and payroll systems at Apollo was never undertaken. As a result, a number of interpersonal conflicts can be attributed to this gap in strategic planning. For example, HP organized its human research and payroll functions into separate units and controlled these units through matrix management, formal planning, targeting, and measurement systems. A corporate staff for each of these functions formulated policies and reviewed results to ensure commonality and coordination across the company. Apollo, by comparison, operated its human resource and payroll functions through rather loosely connected business teams that worked closely with information technology teams. Thus, a misfit between HP's corporate "bureaucracy" and the "adhocracy" of Apollo produced a number of misunderstandings.

Project Control. While planning Apollo's systems conversion tasks, HP's human resource and payroll functional experts typically employed their own distinct framework and criteria to identify what needed to be done and in what order. This situation fostered a "fragmented" picture of what was required to successfully merge HP and Apollo information systems. Unfortunately, Apollo's conversion team members were unable to assist in obtaining the "big picture" because they did not understand HP's systems well enough to get a clear view of how changes in processes and systems would impact their organization. As a result, the resources needed to achieve the systems conversion time frame objectives were underestimated. Interpersonal conflicts occurred when HP's conversion team pressured Apollo's conversion team to meet project milestone deadline dates.

To overcome the numerous interpersonal conflicts that occurred, human resource development staff from both Apollo and HP helped to bridge the gap between the powerful organizational and cultural forces that resulted from the merger, and the needs and desires of individual systems conversion team members. As a result of their efforts, the human resource and payroll information systems conversion project got back on schedule and eventually met its January 1, 1990, deadline.

A social science framework, suggested by Morley Segal (1990, 1996), was used as a guide for understanding why Apollo and HP human resources development professionals were so successful in understanding and resolving interpersonal conflicts.

Human Resource Model

If people were consistently rational, predictable, and reasonable, the field of human resource development as we know it probably would not exist. It would be possible for organizations to identify the qualities needed for a particular merger task, and then simply find the right person for the job. It is, however, not so simple. People are sometimes rational and predictable, but they also have an unconscious part of their mind that may influence their reactions and behavior to a merger in surprising ways.

Segal suggests that a person's early socialization experiences can leave them with a powerful residue of likes, dislikes, and reactive patterns of behavior. Since people differ from one another in many ways, there is no standard way to motivate, support, or guide people during the organizational and cultural changes that result from a merger. Therefore, it is important for human resource development professionals to understand, work with, and change behavior that may be heavily influenced by a variety of feelings and values.

Identify the Problem

Think Like Freud. According to Segal (1996), human resource development professionals should think like Sigmund Freud. Although much of Freud's approach (his view of women, the importance of the libido theory as the basic human drive, etc.) remains controversial, three of his concepts are especially important for anyone who hopes to influence behavior in an organization after a merger or acquisition. These concepts focus on the existence of an unconscious part of the mind, the process of transference, and the existence of defense mechanisms (Hall, 1954).

Unconscious. Freud demonstrated more than a century ago that a part of the mind exists below or beyond our conscious understanding and control. The expression of the unconscious is continually present, yet rarely are we aware of its presence. Freud illustrated how this part of the mind could influence our behavior, feelings, and attitudes in powerful and surprising ways.

While organizations are often created to limit the unpredictable in human behavior, the unconscious has a wonderful facility for surmounting these obstacles and expressing itself. This expression can be both an exciting anticipation of new ideas and creativity, and a monkey wrench in the most carefully developed merger and acquisition plans.

Transference. Freud also argued that the process of growing up inevitably creates many confusing and frustrating experiences. No matter how hard our early caregivers tried, it was impossible for them to meet all of our needs, hopes, and expectations. The result is that many individuals go through life attempting, unconsciously, to relive some aspect of these early relationships. Freud called this transference.

The irony for human resource development professionals is that the rules, objectivity, and impersonality that are created by detailed job descriptions, management plans, and processes to control workforce unpredictability frequently have just the opposite effect when an organization is undergoing major changes resulting from a merger. Segal suggests that they may reinforce conditions that often invite feelings of old, unfulfilled relationships with authority figures in the past. This means that acquired organizations are often structured and operated so as to encourage transference. Therefore, human resource development professionals must have some way to understand and cope with this powerful process in both themselves and the people with whom they work.

Defense Mechanisms. Freud, using his familiar framework of Id, Superego, and Ego, identified a process that virtually guarantees that many of the most thoughtful and rational merger and acquisition plans will have unexpected results. The Id is the mind's instinctive state, the Superego its moral voice, and the Ego its rational planner.

According to Freud, defense mechanisms exist because the Ego, as the repository of energy from the Id and the Superego, cannot always discharge that energy. Undischarged energy creates the feeling of anxiety. This is not acceptable to the Ego and it defends itself by distorting, denying, or deflecting reality. As a result of this barrier to accurate information, the Ego is less able to do its job of coping with reality. Thus, Freud's notion of defense mechanisms can help human resource development professionals understand some of the interpersonal conflicts that occur when their workforce is reacting to organizational changes.

For example, before the Apollo and Hewlett-Packard merger, Lisa Burn managed Apollo's software control area. She was consulted whenever a new system had to be installed. Lisa always knew what software development activities were taking place; she prepared for them and remained on top of things. When Apollo learned that it had to install HP's human resources and payroll systems, Lisa's software control role changed. Lisa no longer felt in control because she did not know HP's software control procedures for installing new systems at division sites and had to comply with the systems conversion project's time constraints. Her initial reaction was to clamp down on everything that she could control. She demanded more and more information from Tim Brown, Apollo's information technology manager, in the form of detailed project plans before she would do anything. From someone who was conscientious and precise, Lisa became a perfectionist when experiencing the stress created by the merger's organizational changes. In Freudian terms, Lisa went back to some of the excessive traits of an earlier development phase of the life cycle (e.g., a regression defense mechanism).

In reaction to Lisa's behavior, Tim found himself getting progressively more angry with her. His anger usually erupted at their weekly status meetings, when Lisa tried to push an item on her system priority list. Rather than listening to each other and working together to solve system conversion problems, Lisa and Tim were each vying for control of the project. During these periods of conflict, Tim was not aware of his own strong needs for control and was blaming Lisa for their differences. He was utilizing a defense mechanism called projection.

Managing the Problem

How can human resource development professionals balance the needs of individuals and organizations when changes are occurring during a merger? The answer can be found in the ideas of two other personality theorists, Carl Rogers and Kurt Lewin. From Segal's perspective, human resource development professionals should embody Rogers and use Lewin.

Embody Rogers. At first glance, there doesn't seem to be a strong connection between Carl Rogers' life and ideas and helping human resource development professionals to change workforce behavior after a merger. Rogers was a psychotherapist and educator, and except for his work in encounter groups and one excursion into the arena of political negotiations, he focused almost exclusively at the individual level. Rogers emphasized individual feeling or emotion, and it was at this level that Segal suggests Rogers found a way to deal with the problems identified by Freud without probing or analyzing the unconscious.

Rogers identified what he believed to be an innate tendency in humans: their ability to become aware of their own inner psyche, and to solve their own problems (Rogers & Rothlisberg, 1989). Some individuals may be able to initiate this process by themselves, but many may need help. Rogers' unique contribution was to find a way to offer this assistance. Through his experience in counseling and psychotherapy, Rogers found that there is one main obstacle to communication: people's tendency to evaluate. Fortunately, Rogers also discovered that if people can learn to listen with understanding, they can mitigate their evaluative impulses and greatly improve their communication with others. Rogers' concept of active listening referred to seeing the expressed idea and attitude from the other person's point of view, sensing how it feels to them, and trying to obtain their frame of reference toward the subject being discussed.

According to Rogers, active listening involves being congruent. This means being internally consistent, so that one's thoughts, feelings, and behavior are all of one expression. The impact of a congruent person speaking with you is to encourage security and trust, thereby encouraging more congruence in yourself. Adopting a stance of unconditional positive regard is another aspect of active listening. This means accepting the person, but not necessarily approving or condoning all types of behavior. This concept provides the atmosphere for a person to achieve the strong inherent drive toward becoming the best he or she can be. Finally, empathetic listening, which is another aspect of active listening, is the ability to step into the other person's shoes and restate what that person is saying, including a restatement of the feelings behind the content.

Sam Atwood was a human resource development professional who embodied these concepts. His very "being" conveyed a powerful message to the employees of Apollo's systems conversion team. The net impact of his message was to encourage systems conversion team members to become aware of and explore their own inner reactions to the changes that were occurring as a result of the merger. These inner reactions include the problems raised by Sigmund Freud.

For example, Tim met with Sam and told him about the arguments that he was having with Lisa at their weekly project status meetings. During their meeting Sam asked Tim a number of questions to understand how he was feeling about the organizational and cultural changes that were taking place.

By listening in a non-evaluative manner, Sam learned that Tim was experiencing a great deal of stress because he was no longer needed in HP's Apollo division. Tim, however, was asked to stay on in a transitional status for an additional six months to complete the HP Apollo systems conversion project. Sam also learned that Tim was trying to repress his inner feelings and portray an image of commitment and professionalism to his systems conversion tasks in the hope of being re-hired by HP. The uncertainty created by merger changes distracted Tim from his work responsibilities and caused him to have interpersonal conflicts with Lisa as well as with other HP conversion team members.

Sam helped Tim identify the underlying issues that were contributing to his interpersonal conflicts with Lisa. He did this by restating the feelings behind the content of what Tim was saying. Sam also encouraged Tim to open up and communicate with Lisa in an honest, non-threatening manner, rather than expressing his anger by continually arguing with her at their status meetings. Tim decided to try Sam's approach and set up a meeting with Lisa to discuss possible ways of resolving their differences. He also invited Sam to help facilitate their discussion.

At this meeting, Tim let Lisa know that their working relationship was important to him and expressed a desire to find ways for improving how they worked together. Tim also communicated his concern that whatever he did, did not meet her standards. The tone of their meeting was friendly and non-threatening. To Tim's surprise, Lisa relaxed and acknowledged her tendency toward being overly task-focused and accustomed to making quick decisions. Lisa and Tim then discussed how they could make project decisions together. As a result of this meeting, ongoing interpersonal conflicts were reduced and their working relationship was significantly improved for the remainder of the project.

Sam had a positive influence on the success of Tim and Lisa's conflict resolution meeting because he used active listening to understand their relationship, regulate the interaction, and sharpen issues. Prior to the meeting, Sam talked with Lisa to understand her feelings about her relationship with Tim. During the meeting, Sam listened to Tim and Lisa discuss their views and feelings and sharpened what he understood to be the main issues. Sam also made an effort to state each participant's issues in ways that made their position understandable, legitimate, and acceptable. One effect of this understanding, legitimating, and sharpening of issues was to encourage Tim to identify the more personal concerns he had about losing his job, which in turn established a level of trust with Lisa and allowed her to be more open in expressing her feelings and desires on how they could improve their working relationship.

Use Lewin. Lewin dealt with human behavior at every level: individual, group, organizational, and societal (Marrow, 1969). The unifying concept and Lewin's guiding force throughout his career was Field Theory (Lewin, 1951). Lewin hypothesized that individuals, groups, and organizations operate within a psychological field. Segal suggests that this field is analogous to an opaque glass bubble which surrounds the person or collection of people. It is their perceived world.

Using this analogy, if Apollo and HP systems conversion team members want to see something outside of their glass bubble, they must see it through a special closed circuit computer monitor: their perception. Thus, when HP and Apollo conversion team members were interacting during the systems conversion process, they were each dealing with an image that they had constructed on their own standalone computer monitor.

Lewin's framework provided Mary Bow, HP's workstation group human resource manager, with an approach that allowed HP and Apollo systems conversion team members to alter their distorted perceptions and deal with the impact of any underlying unconscious issues that resulted from the merger without violating individual privacy or organizational norms.

For example, Mary facilitated a one-day conflict resolution and team-building meeting with HP and Apollo systems conversion team members. In the morning, Mary asked conversion team members to separate into their respective Apollo and HP groups and move to an assigned conference room. Operating within the privacy of their own "group field" (a conference room), teams were asked to generate three lists: (1) adjectives that describe how they perceive themselves; (2) adjectives that describe how they perceived the other group; and (3) adjectives that describe how they believe the other group has perceived them. Mary then brought the conversion team members back together and asked each team to share its list with the other team.

In the afternoon, Mary asked participants to form small groups composed of two to three members from each team. The small groups then discussed their perceptions about the list of adjectives. This was the first time that members of Apollo's team had a chance to discuss their perceptions with a member of HP's team and vice versa. Following Lewin's Field Theory principles, Mary's process allowed the smaller groups to create their own psychological field, in which barriers began to break down and members developed common perceptions about what was working well, what was not working well, and how they could improve the process. These new perceptions formed the basis for a more productive working relationship.

As a result of Mary's intervention, team spirit was rekindled, an agreed-upon process for the remainder of the project was established, an issues escalation process was put in place, clear roles and responsibilities were defined, and additional resources were added to the project.

Discussion and Conclusion

Human resource development professionals should think like Freud, embody Rogers, and use Lewin when understanding and resolving interpersonal conflicts that are likely to crop up when organizational and cultural "misfits" exist after a merger or acquisition. The Freudian perspective makes it clear that the world in which individuals work is one in which some of their own feelings, motivations, memories, and desires are not immediately available to their conscious mind (the Unconscious). Work relationships often have an overlay of unmet needs from earlier life (Transference). And, individuals find themselves unintentionally forgetting, misunderstanding, distorting, and otherwise altering important information regarding their work (Defense Mechanisms).

The challenge for human resource development professionals is to understand and deal with these powerful forces suggested by Freud without violating organizational standards of behavior. The method Freud developed to deal with these forces (psychoanalysis) cannot, however, be used by human resource development professionals to deal with these forces in organizations. Fortunately, the active listening approach based on the work of Carl Rogers and the team-building process developed from the work of Lewin avoid a direct focus on the unconscious by focusing on feelings and perceptions. Thus, Rogers and Lewin provide a framework for human resource development professionals to work constructively with the powerful and destructive forces identified by Freud.

Chris Argyris (1993) builds on the insights of these earlier social science theorists by developing an organizational learning approach that human resource development professionals can use to help individuals understand and resolve interpersonal issues that are likely to occur in times of rapid change, such as those that result from mergers and acquisitions. It is based on overcoming organizational defensive routines.

An organizational defensive routine is a skillful action that inhibits individuals, groups, intergroups, and organizations from experiencing embarrassment or threat and, at the same time, prevents the individuals from identifying and reducing the causes of the embarrassment or threat. Skillful action may be said to be guided by master programs in individuals' heads, programs that automatically produce the behavior in everyday life. Successful use of these master programs also increases the individuals' confidence and self-esteem in managing themselves and others. Therefore, changing the human predisposition to produce organizational defensive routines requires altering both an individual's master program and the organization's protective norms (Argyris, 1990).

Similar to Freud's point of view, Argyris suggests that human beings learn defensive routines early in life to deal with embarrassment or threat. Defensive routines are highly skilled actions executed immediately and automatically. Most of the time they are executed without the individuals' conscious attention. In fact, paying attention may reduce the skillfulness of the actions (Argyris, 1985). Defensive routines are also reinforced by organizational cultures created by individuals implementing strategies of bypass and cover-up. These strategies persist because organizational norms sanction and protect them. Once this occurs, individuals find it rational to hold the organization responsible for their defensive routines. Thus, there is a circular self-reinforcing process, from the individual to the larger unit and back to the individual.

Lewin's (1935, 1948) ideas can be seen in a model developed by Argyris (1993) to explain defensive routines within the context of an organizational group or inter-group. The model begins with the existence of features in the group's "life space" that group members considered potentially or actually embarrassing or threatening. Examples of these features are dissatisfaction with group performance, attribution of politics, attribution that the causes of low performance are not discussible, and recognition of norms against dealing openly with conflicts or views. Whenever these or other embarrassments or threats are perceived or experienced, Argyris suggests that the members' predisposition will be to bypass the problem associated with these feelings. Their bypass will then be covered up; otherwise, it could become public and the reasons for it made discussible.

From Argyris's perspective, these self-fueling, counterproductive processes exist in all groups. They lie dormant until embarrassment or threat activates them. Risks can be transformed into opportunities only if the risks or the opportunities are not associated with embarrassment or threat. If they are, then these dysfunctional consequences will be activated. Thus, the first step to reduce organizational defensive routines is for human resource development professionals to use a learning framework to explain how these routines develop in the first place. Learning occurs whenever errors are detected and corrected. An error is any mismatch between intentions (espoused theories) and actual consequences (theories-in-use) (Argyris & Schon, 1974; Argyris, 1982).

Discovery of a mismatch is only the first step in learning within Argyris's framework. Human resource development professionals can use the approaches developed by Rogers (1989) and Lewin (1948) to work with individuals in at least two ways to ensure that errors are corrected and that the correction perseveres. One way is to change the behavior (for example, reduce backbiting and bad-mouthing among individuals). This kind of correction requires open single-loop learning. The second way is to correct errors by changing the underlying program, or master program, that leads individuals to bad-mouth others even when they say that they do not intend to do so. This is double-loop learning. If actions are changed without changing the master programs individuals use to produce their actions, then the correction will either fail immediately or will not persevere.

If this self-reinforcing process is valid, then human resource development professionals face at least two challenges when trying to help both individuals and their organizations become double-loop learners during the merger or acquisition process. The first challenge is that individuals' senses of competence, self-confidence, and self-esteem are highly dependent upon their theories-in-use and organizational defensive routines. This dependence practically guarantees that when individuals are acting to produce double-loop learning, the consequences will be skillfully counterproductive because their theory-in-use will not always allow their governing values to be changed. The second challenge is that individuals' theories-in-use are so internalized that they are taken for granted. They exist tacitly because they are used skillfully. Behavior is considered skillful when it works, appears effortless, and is produced automatically, without much conscious attention to the process. In short, human beings are skillfully incompetent (Argyris, 1986).

To help individuals recognize their skillful theories-in-use blindness during mergers and acquisitions, human resource development professionals must introduce at the outset new espoused values for them to consider. The new espoused or governing values advocated by human resource development professionals are concerned with valid information, informed choice, and vigilant monitoring of the implementation of the choice in order to detect and correct error. Human resource development professionals can also help individuals learn and craft new behaviors into action strategies that openly illustrate how the actors research their evaluations or attributions as well as how they crafted them to encourage inquiry and testing by others. As a consequence, defensive routines that are antilearning are minimized and double-loop learning is facilitated. Embarrassment and threat are not bypassed and covered up; they are engaged (Argyris & Schon, 1974; Argyris, 1982, 1985).

In conclusion, as changes in technological forces combine with domestic and global competition to create an increasing need for mergers and acquisitions, human resource development professionals will need to understand and apply the social science framework initially suggested by Segal and built upon by Argyris to help bridge the gap between the uncertain qualities of individuals and the needs of a company in seeking to accomplish its business goals. Human resource development professionals can play an important role in helping individuals to learn new values (espoused theories) and behaviors (theories-in-use) that will begin to interrupt organizational defensive routines and create organizational learning processes and systems that encourage double-loop learning in ways that persist. Future research is needed, however, in other merger and acquisition situations to validate the usefulness of this approach in reducing the often-vexsome human resource "fit" issues associated with strategic business decisions and customer-centered strategies.

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Biographical Sketch

Thomas L. Legare is currently a senior consultant with the Burke Strategic Consulting Group (BSCG). He was formerly an information systems manager with Apollo Computer. Mr. Legate has received a B.A. from the State University of New York in Psychology, M.S. from The American University and NTL Institute in Organizational Development, M.A. from the University of Hartford in Social Science Theory and Research Methods, and A.B.D. from the University of Massachusetts in Sociology.