Acquisition negotiation: the influence of accounting on trust development

Hannu Puhakka*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

1 Citation (Scopus)


Purpose: This study aims to explore the influence of accounting on trust development in the context of an acquisition negotiation process at the pre-merger stage. Design/methodology/approach: This study adopted a case study research method. Data have been gathered from an acquisition process of two Finnish companies through 18 semi-structured field interviews with the seller’s, the buyer’s and the merged companies’ top management and external advisors who participated in the process. Findings: The study shows how accounting operated as a trust-building mechanism and served as a substitute for personal-based trust. Accounting assisted the negotiators to surface their initial positive beliefs about the acquisition outcome. Progressively, these positive beliefs outweighed negotiators’ initial negative beliefs regarding the acquisition process. Additionally, accounting enabled the negotiators to show risky behaviors via escalating commitment to the acquisition through ad hoc calculations and continuous discussions. Originality/value: This study adds to the limited prior research examining interfirm trust and the influence of accounting on trust development during acquisition negotiations.

Original languageEnglish
Pages (from-to)12-27
Number of pages16
JournalManagement Research News
Issue number1
Publication statusPublished - 2017
MoE publication typeA1 Journal article-refereed


  • Acquisitions
  • Case study research
  • Negotiation
  • Trust
  • Trust building

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