3 Psychobiology of human emotions, why employees experiencing mergers or acquisitions feel fear, anger, and other negative emotions, and a new assessment toolkit

In Chapter 1, we explored the different types of mergers and acquisitions, helping you understand their structure and objectives from the perspective of businesses and business operations, as well as giving you an appreciation of their complexity as major organizational events. Chapter 1 set the foundation for understanding why mergers and acquisitions can often leave employees feeling confused or uncertain about what is going to happen, and Chapter 2 then helped you understand their history as organizational events that can rise or fall in popularity depending on laws, fertile market conditions, national or global economic crises, and product or service booms or busts. History has shaped the way that the public, including employees, think about mergers or acquisitions as events that could lead to job losses, site closures, culture clashes, or drastic changes in management. Chapter 2 set the foundation for understanding why employees can feel scared about an impending or ongoing merger or acquisition, and why emotions are the focus of this chapter. Emotions are subjective and therefore what matters from a psychological perspective is not the hard fact of whether a merger or acquisition is good or bad, or the actual probability of job losses or other negative outcomes. For some employees a change in management after an acquisition might be great news, whereas for other employees it might be terrible news because they liked the previous management. Therefore, you can see why mergers and acquisitions have a range of emotional outcomes for employees, as you will discover in our systematic review of the published evidence within this chapter. As psychologists, we focus on this human side of mergers and acquisitions not just because it is fascinating but also because there is no known review of employees’ emotional reactions to mergers and acquisitions. We use a systematic review method of analysing and synthesising the literature. We argue that understanding employees’ emotions is an important gateway to understanding what employees will do – something that we briefly discuss towards the end of this chapter, and that we explore further in Chapter 4 (e.g. on employees quitting) and Chapter 5 (e.g. on “us versus them” behaviours). Moreover, what employees feel is important in and of itself because employees’ emotions are an important component of their occupational health (Warr, Bindl, Parker, & Inceoglu, 2013; Bakker & Oerlemans, 2012). We conceptualise mergers or acquisitions as events that trigger strong emotions among many employees, therefore this chapter will help you explore the empirical evidence in the field showing the different types of emotions commonly displayed by employees. The evidence suggests that negative emotions are quite prevalent and they include shock, fear, anger, and uncertainty. We therefore label them, collectively, as “emotional distress.” This chapter will then help you understand how to use a new psychometric tool that we have developed from our systematic review, so that you can help organizations and employees measure emotional distress after a merger or acquisition. This chapter will also help you recognise the causes and consequences of employees’ emotional distress from a merger or acquisition, including quitting their jobs, looking for another job, withdrawing effort from work, and various counterproductive workplace behaviours. First, let us begin this chapter by understanding what human emotions are.

The psychobiology of human emotions

In human psychology, emotions are also commonly known as “affect,” and some authors define an emotion as a person’s psychobiological response to an internal or external trigger (Russell & Barrett, 1999; Watson & Tellegen, 1985). The word “psychobiological” means anything happening within a person’s mind, brain, and body. Defining emotions biologically might include reactions or processes within cells, organs, across pathways within the body (e.g. the autonomous nervous system), and it can involve hormones or neurotransmitters that change the way that the brain or body reacts. Emotions are therefore partly biological events or processes and partly psychological events or processes, a view proposed by Russell (1980). Emotions can also be defined as the brain and the body’s reaction to pleasantness or unpleasantness, and the brain or body’s reaction to activation or deactivation (see also Russell, 2003; Mäkikangas, Feldt, & Kinnunen, 2007). The difference between a pleasant and an unpleasant trigger is easy to understand. For example, a pay raise (pleasant) versus a pay cut (unpleasant), or an announcement that jobs are safe (pleasant) versus an announcement that an organization will make some people redundant (unpleasant). Of course, people can vary in what they define as pleasant or unpleasant, and, therefore, what matters in understanding their emotions is their subjective experience of an event. The difference between activation and deactivation is more nuanced in that it concerns psychological or biological events or processes that signify (to a person) the need to behave in a certain way or take action (which is called activation) or no need to take action (which is called deactivation). For example, an employee who reads an email announcing that his organization is about to be acquired by an organization with a reputation for savage cost-cutting might experience faster heartbeats and a feeling within their body of unease, together with shock and fear, which we can call being in a state of emotional activation. An emotion, therefore, is unlikely to be a discrete psychological or biological event, but rather, a summation of how a person’s mind, body, and brain have reacted. This is why, within this chapter, we concentrate on theories that acknowledge the psychobiology of human emotions.

What other theories are there about human emotions? There are two broad theoretical perspectives defining human emotions. One theoretical perspective can be called the “individual emotion” approach because it comprises of different theories about different types of emotions as separate entities, each with unique defining characteristics and certain consequences for the people feeling them that mean that different emotions are thought to have different consequences. For example, Ekman (1984, 1999) and Ekman and Friesen (1978) famously researched six basic human emotions that are common across different cultures and languages in terms of how they are expressed or recognised on a face. The six emotions in this body of work are anger, fear, surprise, disgust, sadness, and happiness, contributing a new theory of what are called “primary” human emotions (Ekman, 1984, 1999; see Hofmann & Doan, 2018 for a review). Another example of a theory within the individual emotion approach is research into what can be called more complex or secondary emotions, such as guilt or shame, and the difference between them in a range of circumstances and cultures (Giner-Sorolla, Kamau, & Castano, 2010; Demoulin et al., 2004; Fischer & Manstead, 2000). From the perspective of understanding how to theorise emotions in mergers and acquisitions, it will be very important for future literature to explore each of the most common emotions extensively because that will enrich knowledge about what each emotion means psychologically, biologically, and behaviourally. At present, however, the field is relatively new, therefore examining individual emotions arising from a merger or acquisition is less urgent than a systematic review of all the possible emotions expressed by employees about mergers or acquisitions. To our knowledge, this is the first systematic review of its kind.

In contrast to these theories about specific or individual emotions is a broader, holistic, theoretical perspective which conceptualises emotions in terms of psychobiology. We argue that, because of the wide range of emotions evoked by a merger or acquisition as a triggering event, the state of current research lends itself to this broader, holistic method of understanding emotions. Earlier on in this section we introduced and defined emotions in terms of psychobiology and we discussed an emotion as something that can be manifest within the mind, brain, or body, at the level of cells, organs, pathways, and so on. Psychobiological perspectives about emotions are certainly compatible with both individual theories about emotions and other broader theories about emotions. In the case of mergers and acquisitions, where the current evidence only allows a broad theory about emotions, we can apply a psychobiological perspective called circumplex theory (Russell, 1980; Posner, Russell, & Peterson, 2005) that broadly clusters human emotions in terms of whether they are positive or negative affective states. Circumplex theory argues that we can understand any given emotion in the same way by viewing it as a person’s psychological interpretation of certain types of physiological activation within their brain and body. Examples of physiological activation are neural alerts within the brain or stress hormones, such as cortisol, which increases blood glucose levels or adrenaline, which in turn increases heart rate and blood pressure. Physiological activation can be said to alert the brain and the result could be a psychological change in mood, alertness, an emotion, or cognitions, such as memories. Posner et al. (2005) proposed that we can classify what is happening to the brain and body in two ways. We need to classify the “valence” of what is happening by placing a person’s psychological and physiological state somewhere on a continuum between positive valence (e.g. pleasure) and negative valence (e.g. displeasure). We also need to classify the “alertness” or “activation” within the person by placing their psychobiological state somewhere on a continuum between low activation or arousal and high activation or arousal. For instance, the circumplex model proposes that happiness and excitement are high in pleasantness and moderate to high in arousal, whereas it proposes that boredom is moderate to high in unpleasantness and low in arousal, while nervousness is high in both arousal and unpleasantness (Posner et al., 2005). The circumplex theory argues that people rarely experience just one emotion at a time and therefore that it is often more accurate to conceptualise a person’s emotional state along the two simplified continuums. The circumplex model fits with theories about how people react to stressful situations, such as Selye’s theory (1936) of the General Adaptation Syndrome, which likewise explains the body’s physical responses, including the production of stress hormones. Emotions and other stress responses could contribute to poor physical or mental health by evoking physiological reactions that reduce immunity, raise fight or flight physiological responses, and make people more susceptible to mental or physical illnesses (Pennebaker, 1995; Stewart-Brown, 1998).

Circumplex theory is supported by evidence from neuroscience and psychopathology (that is, the study of mental disorders), and it is a theory thought to explain why emotions are broadly linked to physical and mental health better than some other theoretical approaches to emotions (Posner et al., 2005). Although neuroscience research has yet to conclusively pinpoint all the brain regions that are responsible for processing emotions, evidence implicates the prefrontal cortex (Bechara, Damasio, Damasio, & Anderson, 1994) and amygdala (Davidson & Irwin, 1999) as areas of the brain that are critical in helping both the perception of emotions and the production of emotional responses. In terms of the continuum of positive to negative valence, the circumplex theory by Posner et al. (2005) implicates the mesolimbic dopamine pathway as an important area of the brain for emotions because it includes nerve cells that release dopamine to other cells. Dopamine is a neurotransmitter that sends signals about reward and other pleasurable states. The mesolimbic dopamine pathway is said, by the circumplex theory, to connect with the hippocampus and amygdala, which have memory and emotional functions, and the prefrontal cortex, which is involved in a range of cognitive processes. In terms of the continuum from low activation or arousal to high activation or arousal, Posner et al. (2005) propose an “arousal network” that starts with a sensory stimulus that activates the thalamus. The thalamus is grey matter within the brain whose function is to relay sensory signals and regulate consciousness, including levels of alertness and sleep. The activation of the thalamus then activates the amygdala, then the parietal cortex, an area of the brain that makes sense of sensory information by classifying it as a sound, smell, taste, or other. The theory suggests that activation of the thalamus also leads to activation of the primary sensory cortex (which is involved in locating touch and other physical sensation on different parts of the body), the association cortex (which is involved in making sense of objects), and the frontal cortex (which regulates motor functions such as body movements, memories about tasks or emotions, and has many dopamine-receptive neural cells). Additionally, circumplex theory suggests that activation of the amygdala and parietal cortex each lead to activation of the reticular network, or neural cells from many different parts of the brain relevant to alertness, which in turn activates the primary sensory cortex, the association cortex, and the frontal cortex. Circumplex theory is supported by evidence in many ways, but we must also note the limitations of methods common in cognitive neuroscience. Brain imaging techniques, like functional magnetic resonance imaging, are not always reliable in showing a cause and effect connection between the brain and emotions (Vul, Harris, Winkielman, & Pashler, 2009).

The crucial take-home message, in applying the circumplex theory to understanding how employees react to mergers or acquisitions, is that emotionally relevant stimuli trigger a complex series of brain reactions. These, in turn, trigger a wide variety of psychological reactions (e.g. cognitive processes such as memory, emotions), physiological reactions (e.g. a higher heart rate or blood sugar to energise the body), and physical reactions (e.g. running away, quitting a job, having an argument with another employee). It explains why employees could experience many different emotions simultaneously after a merger or acquisition, and why the range of emotions should be broadly conceptualised as negative or positive. This chapter sets the foundation for understanding the wide range of consequences of mergers or acquisitions discussed in subsequent chapters.

Systematic review of emotions in mergers or acquisitions

Let us now explore the wide range of emotions observed among employees about mergers or acquisitions by researchers who have published their results. We use a technique called a systematic review as a step towards a comprehensive overview of all the literature within the field. Published literature shows that employees experience a range of emotions before, during, and after a merger or acquisition. Table 3.1, which follows, summarises published studies about the topic, giving you an overview of what type of industry the merger or acquisition involved, how many employees took part in the research, what type of method the researchers used, and what their results show. Giving employees a questionnaire survey is one example of cross-sectional research. It is so called because it captures psychological concepts in one segment of time. Observational studies and interviews also tend to capture one segment of time, but the difference between them and cross-sectional research is that observational and interview studies tend to gather qualitative data or quantitative data that is much more basic than many cross-sectional surveys. Longitudinal research can be a survey, an observational study, or an interview study conducted across two or more time points. An example of longitudinal research is asking employees to fill in a questionnaire just before a merger, just after, and a few months later. From the perspective of examining employees’ emotions about mergers and acquisitions, each method has its advantages and disadvantages. For example, surveys can provide rich data about different emotions using valid and reliable measurement methods that have been developed in previous research (though not all researchers use such measures). However, surveys provide researchers with employees’ subjective responses to questions whose answers they might feel the need to impression manage. Many researchers in psychology or related fields offer survey respondents anonymity and/or confidentiality, but some employees could still feel uncomfortable about admitting to feeling distressed or having negative emotions because of the possible stigma. Surveys, therefore, might capture an underestimate of the emotions experienced by employees, or they might tend to find that employees who are concerned about confidentiality are less likely to express negative emotions. Observational studies can be useful in allowing researchers to analyse behaviour or events in their natural environment in a way that is relatively objective. However, the validity of observational research can depend on the researcher’s expertise, neutrality, and behaviour of the researcher as well as what they are looking for or measuring. Its reliability can depend on whether or not organizations or employees modify their behaviour or events because a researcher is present. Interview research has some advantages, such as allowing employees to freely express concepts that might not be captured in a structured survey, but it has the disadvantages of poor validity and reliability due to small or unrepresentative sample sizes, a lack of quantifiable data, and small quantities of qualitative data that cannot be used to analyse statistical effects including testing the probability of hypotheses or analysing the strength of effects or associations. Interview research does not reveal causality, and neither does cross-sectional or observational research (the latter two of which tend to show only prevalence, correlations, trends, or associations among data but not causality). Longitudinal research is useful in providing data that can be compared across two or more time points, which is useful in analysing increments or decrements in psychological concept and causality. For example, testing an emotion before and after an acquisition, and analysing many employees’ data to test the probability that the emotion changed, can show us that the acquisition caused an increase in the emotion and, therefore, longitudinal research is one of the only few ways of testing causality. However, what counts as a cause can be difficult to pinpoint in cases where other factors change at the same time as the cause changes. The other method that can tell us about causality is an experiment which is, defined simply, a type of study that compares the same outcome in people who are in different categories (or different levels of one independent variable) or the same people at different time points. Complex experiments test how different independent variables interact in predicting an outcome, also called a dependent variable. Good experiments require tight controls which can be accomplished in laboratory human research, but rarely in natural settings such as mergers and acquisitions, and this is why they are relatively rare in the latter context. Looking at Table 3.1, you can see that only one study has used an experiment, and that most of the existing research into employees’ emotions about a merger or acquisition use cross-sectional, observational, interview, or longitudinal methods.

We can extrapolate from the various studies (see Table 3.1) that common emotional reactions to mergers or acquisitions among employees are anger, anxiety, resentment, hope, motivation, shock, anxiety, worry, excitement, changing feelings of commitment or emotional attachment, feeling burnout, betrayal, confusion, distressed, afraid, frustrated, insecure, stressed, suspicious, threatened, excluded, uneasy, disappointed, psychologically unsafe, depressed, nostalgic, tense, overloaded, sad, and other largely negative emotions.

Here are some examples illustrating the methods and findings of research within the field. Aside from the common emotions of fear, anger, and confusion, which are unsurprising emotional reactions (see Chapter 2), let us look at some less easily predicted but common emotional reactions such as employees’ feelings of commitment towards and motivation within the organization. Terry et al. (2001) carried out a cross-sectional study among 445 employees in a merged airline to explore their responses from an intergroup perspective. They analysed the differences in terms of affective commitment and the study compared low-status and high-status employees – a statistical technique called ANOVA (analysis of variance). ANOVA tests whether two or more groups of people differ significantly on a certain dimension of interest. Results showed that employees with a low status in the merged organization were less committed to the organization compared to the employees in the high-status position. Another study (Klendauer & Deller, 2009) was conducted among 128 managers from 37 companies involved in domestic or cross-border mergers and acquisitions. Correlational analysis by the authors showed that perceptions of distributive, procedural, and interactional justice were positively associated with employees’ feelings of effective commitment to the organization. Another study involving 160 employees in a cross-border acquisition between an American and a German firm (Chun & Davies, 2010) showed that tenure negatively correlated with employee emotional attachment. That is, the longer the employee has worked for the organization, the less they were emotionally attached to the organization after the acquisition. The authors also explored the relevance of the corporate reputation of the firm. Corporate reputation was conceptualised in terms of warmth (i.e. the belief that the organization is caring and supportive), integrity (i.e. the belief that the organization is being honest in its interactions with employees), empathy (i.e. the belief that the organization can understand employees’ feelings and needs), and conscientiousness (i.e. the belief that the organization provides security to employees and is a reliable firm). The four measures of corporate reputation were found to be positively associated with emotional attachment. Interviews with employees in a merger between two banking institutions following a restructuring (Clarke & Salleh, 2011) revealed that employees lost their motivation, and they felt worried and had emotional strain. These effects were still felt by the employees ten months after the restructuring measures had been taken.

Burnout and emotional distress also appear to be common emotional responses among employees to changes brought about by a merger or an acquisition (Idel et al., 2003). In a study among 93 nurses from two hospitals in Israel, Idel et al. collected response data when the merger was announced and six months after the merger’s completion. While from time one to time two authors found no significant difference in terms of burnout or stress, they observed a significant difference between groups of nurses. More specifically, nurses who had to relocate to the new hospital were more emotionally distressed than the employees who did not have to relocate. Employees who felt more stressed by the merger and threatened by its outcomes also felt more burned out, had more adjustment difficulties, and cited lack of physical or mental strength. The regression analysis carried out by Armstrong-Stassen and Cameron (2003) in a similar study setting (i.e. a hospital merger) showed that burned-out employees were unable to make use of control-oriented coping strategies. Prior coping resources facilitated the use of control-oriented coping. Control-oriented coping involves thinking in positive terms about a stressful situation, having a problem-solving approach to the stressful situation, and seeking help or information (Latack, 1986). Prior coping resources were conceptualised as personal control (i.e. employees felt like they were capable of manage the merger situation), organizational support (i.e. the perception that the organization addresses employees’ feelings and needs and provides a sense of psychological safety), and affective commitment. Therefore, organizations need to provide a sense of psychological safety in order to make sure employees have the necessary resources to manage stressful situations in mergers and acquisitions. A healthy environment where employees feel understood, are empowered to voice their opinions, and are included in the decision-making process with a leader that has a transformational style were found to be associated with innovation success, efficiency, and a feedback learning culture (Nemanich & Vera, 2009).

Therefore, we can conclude from the systematic review of many published studies that employees experiencing mergers and acquisitions frequently experience negative emotions such as fear, anger, confusion, distress, lower attachment to the organization, feeling demoralised, devalued, and uncertain. Few studies show positive emotions, but we must note that there might be what is called a “bias” within the literature in what emotions researchers decide to measure, and in what studies tend to be published. It may be that few researchers decide to conduct research into positive emotions about mergers or acquisitions. We therefore recommend that researchers start measuring a range of both positive and negative emotions, and publishing data about the prevalence of each among employees experiencing a merger or acquisition. Until such studies are published in the future, we have developed a tool that captures the emotions discovered during the systematic review that consultants and other practitioners can use to assess employees’ emotional reactions to a merger or acquisition.

How to assess employees’ emotions about a merger or acquisition

Based on the emotions uncovered in our systematic review, we have developed an assessment tool that you can use to test the range and severity of emotions experienced by employees after a merger or acquisition. For example, you may be a human resource professional, manager, occupational health professional, or consultant tasked with investigating how employees feel about a merger or acquisition. It is important for you to measure employees’ emotional responses to mergers or acquisitions on a continuum, across different time points, and to use a tool such as our new Employee Emotion Assessment Toolkit (EEAT; Kamau & Oancea, 2020b). We also recommend that you supplement this with a measure of a range of positive emotions so that you gain a balanced view of both positive and negative emotions. The EEAT is derived from our systematic review of published studies, but we noted the infrequency of research about positive emotions and called for further research about both positive and negative emotions among employees experiencing a merger or acquisition.

The EEAT is a useful method of troubleshooting employees’ emotions after the announcement of a merger or acquisition, and throughout the process. Ideally, we recommend using the troubleshooting toolkit as a self-assessment method that you ask employees to use as way of identifying and monitoring their emotional responses in a way that remains confidential to them. You should, of course, then provide appropriate support for the employees, such as through group support sessions, peer-to-peer support, and management interventions (e.g. giving employees more information or allowing them to be involved in planning the merger or acquisition as a way of addressing their fears, uncertainties, or anger). Alternatively, when used as a group troubleshooting toolkit, we recommend ensuring that employees are able to self-assess their emotions confidentially and anonymously, with data analysed only as group metrics (average score per organization, department, team, job role, etc.).

Let us now turn to the consequences of negative emotions experienced by employees for their behaviour at work and attitudes towards their jobs during or after a merger or acquisition.

Consequences of emotions in mergers and acquisitions

We can understand the consequences of the emotions experienced by employees during mergers or acquisitions by integrating the circumplex theory of emotions with theories and evidence about how people respond to emotions, including the results of our systematic review that we summarised earlier. Recall that, in circumplex theory, emotions can be understood as biopsychological states that fall somewhere on two continuums of valence (or pleasure to displeasure) and activation (from low to high arousal) (Russell, 1980; Posner et al., 2005). There is not enough research within the field of mergers or acquisitions to justify categorising the emotions expressed by employees in terms of valence and activation because this might vary from one employee to another, but we can conceptualise the emotions in terms of the extent to which they are positive or negative. In the previous section, we discussed evidence showing that employees have many negative emotions about mergers and acquisitions, although we do call for further research measuring positive emotions as well. We argue that an employee’s emotional responses to a merger or acquisition start with their cognitive appraisal of the event, just as many other emotions do (Lazarus, Kanner, & Folkman, 1980; Smith & Ellsworth, 1985). An example of a cognitive appraisal is an employee thinking of a merger or acquisition as a threat to their job security. A common theme within the published evidence is that employees often think of mergers or acquisitions as threatening events because they make them feel very uncertain about the new management team (Shearer et al., 2001), new work procedures, systems or routines, and their own status within the new organization (Terry et al., 2001). When employees then experience negative emotions such as anger, shock, fear, or uncertainty, it is plausible that, by applying Carver’s (2006) theory of approach/avoidance, we can extrapolate the likely consequences of negative emotions. Carver’s theory suggests that when people experience negative psychobiological reactions they handle this by behaving in a way that deals with the trigger of the reactions (approaching it), or by going away from the trigger (avoiding it) in an attempt to reduce its unpleasant psychobiological effects. We can argue that employees feeling positive emotions about a merger or acquisition are more likely to engage in approach behaviours, such as taking part in activities connected with the event and staying employed in the organization. In contrast, employees who experience negative emotions might feel more motivated to withdraw from the organization by going absent from work, looking for another job, and quitting. This extends the work of Gray (1990, 1994), who proposed that people have a behavioural activation system and a behavioural inhibition system (BAS, BIS; see also Carver & White, 1994, who developed questionnaires to measure them)x, and the idea that some people have an overactive or underactive BAS or BIS can explain individual differences among people including differences in how employees react to their emotions about a merger or acquisition. It is important to note that Carver (2006) did not apply the circumplex theory of emotions in developing his approach-avoidance perspective and, in fact, Carver proposed the approach-avoidance perspective as an alternative, but we argue that the two theories are not actually conceptually irreconcilable. The circumplex theory is backed by considerable brain-based evidence and Carver’s perspective (together with the BAS/BIS approach) is also supported by brain-based evidence (e.g. Sutton & Davidson, 1997; Barros-Loscertales, Meseguer, & Sanjuan, 2006). The problem with theoretically separating circumplex theory from the approach/avoidance perspective, or the BAS/BIS perspective, is that it is simply too early in cognitive neuroscience as a field to eliminate either theoretical perspective because much of the evidence from neuroscience is correlational rather than causal (Vul et al., 2009). Neuroscience can tell us about the areas of the brain that are activated in certain situations or when people are experiencing certain emotions, but future evidence is needed combining neuroscience with other areas of biology and psychology, including testing causal effects on behaviours in the workplace. Current evidence does not allow us to conclusively say that one theory, and not the other, is correct. The approach-avoidance perspective fits with the broader physiological theory that parts of the brain and the sympathetic nervous system have two parallel processes – fight versus flight (e.g. Jansen, Nguyen, Karpitskiy, Mettenleiter, & Loewy, 1995). Again, this is an idea that is conceptually compatible with the circumplex theory, which draws from a wide array of evidence from neuroscience and physiology. We can liken Carver’s concept of “approach” to a “fight” response, and we can liken “avoidance” with a “flight” response. Although Gray (1990) argued that the BAS/BIS are in addition to the fight-flight system, we argue that there is insufficient evidence to support this view. We can conclude that the approach-avoidance, BAS/BIS, and circumplex perspectives are compatible with general evidence from neuroscience and human physiology, justifying an integrated approach to conceptualising emotions and their potential behavioural outcomes. In other words, the two sets of theories explain emotions in ways that are not mutually exclusive. Circumplex theory explains what emotions are whereas the approach-avoidance perspective explains what emotions do.

In order to understand what emotions do, recall that some emotions activate the mesolimbic dopamine pathway, which is associated with positive feelings such as being rewarded (Posner et al., 2005). In contrast, negative emotions activate areas of the brain associated with pain (Shackman et al., 2011). This view of emotions as broadly positive or broadly negative physiological states is supported by a meta-analysis of 397 studies that used positron emission tomography or functional magnetic resonance imaging (fMRI) studies (Lindquist, Satpute, Wager, Weber, & Feldman Barrett, 2016). We propose that when mergers or acquisitions evoke positive emotions, this involves a set of enjoyable psychological and physiological reactions that motivate employees to engage in “approach” behaviours such as spending effort on the job, and organizational citizenship behaviours such as being helpful to other employees, volunteering, and working overtime. Negative emotional states involve reactions within the brain and body that in turn activate behavioural inhibition because wider evidence shows that people avoid stimuli with negative consequences, such as pain or punishment (Murphy, Nimmo-Smith, & Lawrence, 2003). Drawing on the circumplex theory and other evidence from neuroscience and physiology, we propose that when mergers or acquisitions evoke negative emotions, this involves a set of unpleasant reactions within the brain and body (e.g. the production of stress hormones) that encourage employees to engage in avoidant behaviours such as looking for other jobs, going absent from work, missing meetings, and so on. We suggest that employees who feel negative emotions such as shock, anger, or disappointment about a merger or acquisition are also likely to start withdrawing further investment in their current jobs in anticipation of the loss of rewards from that job. Behaviours associated with emotions are often reward-seeking or self-preserving (Watson, Wiese, Vaidya, & Tellegen, 1999; Carver & Harmon-Jones, 2009; Carver, 2006; Citron, Gray, Critchley, Weekes, & Ferstl, 2014), therefore employees might react to mergers or acquisitions in ways that are maladaptive (e.g. aggression, going absent from work) because of feeling overwhelmed by unpleasant physiological and brain-based responses. Negative emotions motivate people to engage in behaviours that help them restore wellbeing (Fredrickson, 2001), therefore negative emotions could be quite motivating for employees in encouraging them to move away from the stimuli causing unpleasant physiological and brain-based responses. It is therefore unsurprising that staff turnover is a common consequence of mergers or acquisitions, and we will explore this in greater detail later on in this book.

Negative emotions are also associated with counterproductive workplace behaviours such as silence, social withdrawal, and effort withdrawal (Warr et al., 2013). Anxiety can make employees avoidant (Aldao, Nolen-Hoeksema, & Schweizer, 2010), and fear or feeling threatened can make employees “freeze” and behave defensively (Blanchard, Hynd, Minke, Minemoto, & Blanchard, 2001). Frustration and feeling insecure or betrayed can make employees deliberately delay job tasks, search for distractions (Harrington, 2005), and ruminate (Rachman, 2010). Uncertainty can prompt un-collaborative workplace behaviour, interpersonal conflict with other coworkers, dips in job satisfaction, and make employees plan to leave an organization (Marmenout, 2010). Mistrust is another negative emotion that pervades mergers and acquisitions, and it can threaten the success of the merger or acquisition by hindering the smooth integration of the combining teams (Vaara, Tienari, & Säntti, 2003; Monin, Noorderhaven, Vaara, & Kroon, 2013). It is important to give employees assurances that reduce or eliminate negative emotions about a merger or acquisition (e.g. ambiguity, uncertainty, and feelings of job insecurity), without which they may “jump ship” by going back on the job market or else psychologically withdraw from work by. minimising job effort, being hostile to colleagues, or unresponsive to communications, etc. Not all employees will react to a merger or acquisition in the same way, even if we focus on just one emotional response. For example, whereas some studies show lower organizational commitment (Terry et al., 2001), other studies shows that commitment does not change (Cartwright & Cooper, 1993). Therefore, researchers, consultants, and other practitioners need to troubleshoot employees’ emotional responses to a merger or acquisition using methods that identify emotions at the individual level and then, subsequently, troubleshoot average emotions across organizations, job roles, teams, etc. across different time points.

Recall the new assessment tool that we have created to measure employees’ emotional responses to a merger or acquisition, the Employee Emotion Assessment Toolkit (EEAT; Kamau & Oancea, 2019). This is based on our systematic review of commonly occurring emotions. Look back at the scoring instructions and the categories within the assessment tool. As a general rule of thumb, we argue that employees in Category 0 and I are most at risk of engaging in avoidant behaviours. Employees who feel highly anxious, shocked, resentful, threatened, distressed, etc. are more likely to protect themselves psychologically by planning to switch jobs, going absent, or by avoiding meetings or interactions that remind them of problems connected with the merger or acquisition (Fried et al., 1996; Ray & McGee, 2006). Therefore, if resources are low, this rule of thumb can be used to identify which employees are most in need of interventions such as one-to-one meetings that help prevent staff turnover. This make sense from a behaviourist perspective (Russell & Barrett, 1999; Warr et al., 2013) because people generally react to unpleasant situations or stimuli by leaving or avoiding the situations or stimuli in the future; therefore, it is unsurprising that employees who feel strong negative emotions about a merger or acquisition are most at risk of leaving or disengaging. We argue that employees in Category V and VI are most likely to engage in approach behaviours. Therefore, initiatives whose aim is to galvanise staff to get on board with a merger or acquisition could succeed by encouraging employees in these categories to inspire their colleagues. Of course, categorising employees according to their emotions about a merger or acquisition should not be misused for unethical ends such as making redundancy decisions, and organizations should not exploit employees in category V and VI if in fact their hopeful, optimistic emotions are unfounded (e.g. if job cuts are planned then it is important not to mislead them into thinking otherwise).

We recommend that managers, human resource professionals, occupational health professionals, consultants, other practitioners, and researchers implement interventions that help employees in Category 0, I, or II psychologically “move” into Category III emotions or above. You can do this by helping employees apply sense-making theory (e.g. Marmenout, 2010; Vaara et al., 2003). This theory would mean helping employees try to find meaning and sense of the merger or acquisition by observing cues from the organization(s), other people, and other sources of information, e.g. news reports, rumours about how an acquiring organization behaved in past acquisitions, etc. Ideally, you would help them engage in sense-making by focusing on positive rather than negative cues. What employees perceive to be happening is important because they search the unfolding events for cues that help them make causal explanations about what is happening, like: “Is the acquiring organization making a site visit on Monday because they are thinking of closing this factory plant, just as they closed two factory plants in their last acquisition?” Employees who already have negative emotions are probably going to interpret cues by assuming the worst because they interpret what is happening from the lens of emotions such as worry or insecurity (Kovoor-Misra & Smith, 2008; Guerrero, 2008). In this example, the explanation might be that the acquiring organization wants to make the site visit because it wants to keep the factory plant, rather than close it, but the lack of discernible cues (e.g. e-mails explaining the purpose of the visit) can cause employees more anxiety, distress, or insecurity if they already have these sorts of negative emotions about the acquisition. The approach of understanding how positively or negatively employees feel about a merger or acquisition is useful because the intensity of the emotions that employees feel determines how intensely they engage in approach or avoidant behaviours during a merger or acquisition (Gable & Harmon-Jones, 2010).

Not all negative emotions about a merger or acquisition lead to avoidant behaviours. Anger can inspire employees to engage in approach behaviours such as asking questions or trying to contribute to the fate of the merger or acquisition because, in general situations, brain-imaging studies show that anger activates the anterior cerebral region, an area commonly associated with approach behaviours (Carver & Harmon-Jones, 2009). Negative emotions that are highly arousing can actually lead to action, whereas other types of negative emotions elicit avoidance (Warr et al., 2013). It is therefore important to give employees who are angry the opportunity to engage in positive approach behaviours by consulting them and involving them in decision-making about what is going to happen as much as possible. On the whole, we encourage you to both understand employees’ emotions about a merger and acquisition and help them “move” from negative emotions to less extremely negative or more positive emotions. This is important in helping to prevent counterproductive workplace behaviours such as withdrawal of effort, absence, and other methods that employees can use a way of coping with the negative emotions.

Conclusion

This chapter started by discussing the psychobiology of human emotions, including how they are manifest within the mind, brain, and body at the level of cells, neural pathways, and systems or processes within the body. We discussed the circumplex theory of emotions, and its compatibility with other theories of emotions such as the approach-avoidance perspective. This chapter then presented a systematic review of the state of the evidence about the emotions that employees feel in reaction to mergers or acquisitions, with much of the evidence showing that negative emotions, such as uncertainty and fear, are common. We then helped you explore ways of measuring, scoring, and classifying these emotions using the new Employee Emotion Assessment Toolkit (EEAT) if you are a manager, human resource professional, occupational health professional, consultant, or another type of practitioner (including organizational psychologists) involved with a merger or acquisition. Finally, we discussed the behavioural consequences of employees experiencing negative emotions about mergers or acquisitions, such as withdrawal or avoidance by quitting the organization or looking for another job. We will now explore employees’ quitting intentions, resistance, and support (or lack of support for a merger or acquisition) in more detail in Chapter 4.