Confidentiality Constraints Within Mergers and Acquisitions: Gaining Insights Through a ‘Bubble’ Metaphor*
| Published date | 01 December 2006 |
| DOI | http://doi.org/10.1111/j.1467-8551.2005.00440.x |
| Author | Ian Harwood |
| Date | 01 December 2006 |
Confidentiality Constraints Within
Mergers and Acquisitions: Gaining Insights
Through a ‘Bubble’ Metaphor
*
Ian Harwood
School of Management, University of Southampton, Highfield, Southampton, Hampshire, SO17 1BJ, UK
Email: iah@soton.ac.uk
Mergers and acquisitions are extremely sensitive, both within and outside the
organizations involved. Confidentiality agreements are therefore essential for allowing
teams the ‘space’ to develop potential scenarios for future integration. Despite the
importance of confidentiality in practice, the subject has received little coverage in the
management literature. By adopting a case-study approach, this research explores
aspects of confidentiality in a four-year post-acquisition integration programme in a
FTSE100 pharmaceutical company. The paper identifies a range of personal impacts on
the signatories, as well as various dimensions of information transfer despite the
agreement being in place. Through the use of a metaphor, the research suggests that a
confidentiality agreement has many similarities with the properties and characteristics
of a bubble. This bubble trope is used to enhance conceptual understanding of
confidentiality constraints in an organizational-change context. The paper concludes by
suggesting some ‘key learnings’ in relation to using confidentiality agreements in
strategic change programmes such as a merger or acquisition.
Introduction
The management and security of knowledge can
have a direct impact on the ongoing prosperity
and viability of organizations. Within this con-
text, the act of merging with or acquiring another
organization can magnify the importance of
maintaining confidentiality, especially in the early
scenario-development phase where options for
integration are developed (Harwood, 2001).
Mergers and acquisitions are therefore normally
very sensitive transactions. As a result, access for
primary research into merger and acquisition
(M&A) activity is limited, resulting in little
coverage of confidentiality issues in the M&A
literature. Through a unique opportunity of
access (Denscombe, 2003), this research explores
the impact of confidentiality constraints within
an acquisition integration programme in a multi-
national FTSE100 pharmaceutical organization.
The paper is divided into two distinct parts. On
a practical level, the first part highlights the
personal consequences of a formal confidentiality
agreement on the signatories, along with estab-
lishing numerous vehicles for how information
can be conveyed, despite the agreement being in
place. The second part uses a metaphor to draw
comparisons between characteristics of bubbles
and confidentiality constraints, thereby enabling
further insights to be gained on a more con-
ceptual level.
Prior research into confidentiality
Confidential information is commonly said to be
‘secret information that is disclosed or entrusted
on the understanding that it will not be divulged
*
The author wishes to thank all the respondents who
provided primary data for this research. The helpful
comments of the BJM Associate Editor and two
anonymous referees, as well as Chris Chapman and
Roderick Martin, are also gratefully acknowledged.
British Journal of Management, Vol. 17, 347– 359 (2006)
DOI: 10.1111/j.1467-8551.2005.00440.x
r2005 British Academy of Management
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