Knowledge@HEC - Special Issue - Compilation of Research Articles - (Page 19)
METHODOLOGY
Michel Lander and Linda Kooning conducted 12 semi-structured interviews with 10 of the key players from the merger between KLM and Air France,
including respective KLM and Air France CEOs Leo Van Wijk and Jean-Cyril Spinetta. The interviews were followed up by collaborative revisions and
clarifications by email when necessary. They also used newspaper and business publication archives for background, plus internal KLM company
documents.
If parties have
P RACTICAL
A PPLICATIONS
higher trust levels,
In order to build trust, particularly trust in the process, Michel Lander
says open and honest communication goes a long way. Trust in the personal
and process domains will transfer to the outcome domain. If parties have
they are willing to
higher trust levels, they are willing to take bigger risks, thereby increasing
the chances for successful mergers and acquisitions. Notably, informal
moments are important to help people connect: "It will make the process
take bigger risks, thereby
smoother," says Michel Lander. He recounts how Dutch newspapers made
a big deal out of the fact that Italian or South African wine, not French wine,
increasing the chances for
was served at a dinner between both management teams, while KLM and
Air France executives just laughed it away. "If that level of comfort exists,
then negotiator relationships can withstand a lot of other pressures," he
successful M&As.
concludes.
seen as a one-off in which either you trust a person or you
don't, but in fact it is possible to know and trust the
sameperson in some contexts and not others-as a friend
or as a colleague, for example. At the same time, different
trust levels in different contexts spill over into each other. As
Michel Lander explains, the talks between KLM and the two
other airlines, British Airways and Air France, are a case in
point. Up to the very last minute, Air France executives did
not know whether KLM would proceed with them or with
British Airways-in other words, there was uncertainty,
even distrust, regarding the final outcome. But the French
side chose to accept this uncertainty because they had faith in
the process, which was open and transparent. "The
temporary imbalance was compensated by trust in the
process," says Michel Lander. Meanwhile, the CEO of
British Airways kept postponing the deal with KLM, going
two weeks without addressing an issue. Consequently, Leo
Van Wijk lost trust in the process and, eventually, by
extension also in the outcome, despite a good personal connection with the CEO. In other words, trust in the process is
vital: "It is definitely transferable, and it can compensate for
more than personal trust can."
leap they are taking is smaller," says Michel Lander. In the
case of KLM, flagship airline carrier and crown jewel of the
Dutch economy, selling to Air France was a major leap, not
only for the airline but also for the Dutch government. Despite
considering the deal a "merger," Air France technically bought,
or "acquired" KLM, and there was always the risk that the larger
entity would ultimately decide to get rid of the KLM brand.
But, in the end, trust between the negotiators led to a high-risk,
high-intensity, yet successful merger, rather than a decision
to remain separate entities."This was achieved thanks to trust,"
reiterates Michel Lander. Trust that was built in all three
domains: the pay-off from integrated governance was expected
to be high (trust in the outcome) and both parties had faith
in the other's ability to cooperate (trust in the process and
personal domains). ■
Based on "Boarding the Aircraft: Trust Development Amongst
Negotiators of a Complex Merger" by Michel Lander and Linda
Kooning (Journal of Management Studies, January 2013) and
an interview with Michel W. Lander (February 2013).
HIGHER TRUST ENCOURAGES GREATER RISK-TAKING
Finally, greater levels of trust make all parties more willing
to take greater risks. "With trust, they have a feeling that the
Knowledge HEC
16
Table of Contents for the Digital Edition of Knowledge@HEC - Special Issue - Compilation of Research Articles
Cover
Partner companies
Table of Content
公司治理 (David Thesmar)
Corporate governance
欧洲的可再生能源 (Andrea Masini)
Renewable energies in Europe
决策 (Mohammed Abdellaoui)
Why do decision makers underestimate rare events?
建立信任 (Michel Lander)
Building trust for successful mergers and acquisitions
产品线质量的高低端延伸 (Timothy Heath)
Extending product lines up and down in quality
制度变革 (Carlos Ramirez)
Institutional change
奢侈品市场 (Anne Michaut-Denizeau)
The luxury market
创业 (Anisa Shyti)
Entrepreneurship
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