Technocratic control in organizational identity change in a merger context – Case Metso Outotec

Abstract

Organizational identity is typically associated with socio-ideological control, such as discourse, value, mission, and vision statements, symbols and traditions, employee socialization, and leaders’ example. Nevertheless, it has recently been argued that also technocratic forms of control, such as different financial and non-financial targets and measures, are involved in the processes related to organizational identity and organizational identity change. Indeed, it has been suggested that socio- ideological and technocratic control should not be considered separate control systems, but rather be understood to exist in a mutually sustaining relationship. From this perspective, technocratic control can be understood as non-obvious source of socio-ideological control and identity work.

Despite of the increased interest in the intersection of technocratic and socio-ideological control, little is known on the abovementioned accounting measures’ implication on the process of organizational identity change in a merger context. Although mergers continue to server as popular means for organizations to reach their growth aspirations, they often fail to fulfil the expectations or reach the objectives set for them. It has been argued that the origins of these issues stem from the people side within organizations as mergers tend to stir up feelings of loss and uncertainty and lead to undesirable social phenomena, such as status evaluations and dominating behavior. This, in turn, tends to result in more conflict, lower motivation, and decreased performance in the post-merger organization.

The findings of the thesis’ exploratory case study illustrate how accounting measures both enhance and complicate the organizational identity change process in a merger. In line with the existing literature, accounting measures produce persistence, clarity, transparency, comparability, and direction that support organizational members in the identity change process. Accounting measures’ quantified knowledge allows for benchmarking against high-performing social referents and provides access to information on organization’s self-defining attributes and identity-image discrepancies. Similarly, it provides tools for crafting future vision for the post-merger organization and may increase the sense of perceived continuity among organizational members. Nevertheless, issues in number interpretation, measurement, and combining information from different sources can cause frustration and uncertainty. Consequently, this can create a certain sense of meaning void and change overload among organizational members and thus lead to increased ambiguity in the organizational identity.