Employee Perspective on Mergers and Acquisitions (M&amp;As): A State-of-the-art Literature Review and Synthesis

Sarala, Riikka M.

doi:10.1108/s1479-361x20210000020007

Cited by 3 publications

(4 citation statements)

References 74 publications

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“…Following recent calls to address the collective impact of organizational change and explore M&As at the organizational level (Kempton & Sarala, 2021; Rafferty et al, 2021), we present a natural quasi-experiment examining the impact of mergers on workforce outcomes. Integrating insights from OST and COR theories, we predicted that M&A activities may represent environmental stressors contributing to declines in employee outcomes.…”

Section: Discussionmentioning

confidence: 99%

“…By addressing these issues, we also tackle recent criticism of past research on the human side of M&As (Dao & Bauer, 2021). First, critics point out that organizational-level aspects have often been overlooked in M&A studies (Cartwright, 1998; Kempton & Sarala, 2021), and that when M&As have been studied at the organizational level they have tended to use proxy variables or have been informed by a single-organizational informant who is unrepresentative of the “average” worker. This has resulted in a “denaturalization” of humans in M&A research (Dao & Bauer, 2021, p. 1).…”

Section: The Effects Of Mandas On Workforce Outcomesmentioning

confidence: 99%

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The impact of supportive leadership on employee outcomes during organizational mergers: An organizational-level field study.

Giessner¹,

Dawson²,

Horton³

et al. 2023

Journal of Applied Psychology

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Past merger and acquisition research has reported mixed findings on the impact of mergers on workforces. To address these ambiguities and advance merger research at the organizational level of analysis, we present a natural quasi-experiment focusing on mergers in the English National Health Service. Building on organizational support theory and conservation of resources theory, we propose that merger events represent environmental stressors, with negative implications for employees’ subjective (job satisfaction) and objective (absenteeism) outcomes. However, extending previous theorizing, we argue that by increasing their supportive leadership, midlevel management can compensate for the resource losses incurred during mergers, and in doing so, minimize the adverse impact on their workforces. We test our predictions in the context of multiple primary care trust mergers, which took place in 2006. We analyzed the annual staff surveys, combined with objective information on employee absenteeism, and compared merging organizations with nonmerging organizations before (2005) and after (2007) the mergers. As expected, employees of merging (vs. not merging) organizations showed stronger decreases in job satisfaction, and these decreases in subjective outcomes were associated with increases in absenteeism over the course of the merger process. However, consistent with our propositions, we found that increases in supportive leadership during the merger period served to mitigate these negative outcomes. Our results highlight the organizational-level implications of mergers and the role that midlevel management can play in compensating for the losses experienced during (stressful) merger events. We discuss the implications for dynamic models of merger integration and leadership during change.

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Section: Discussionmentioning

confidence: 99%

Section: The Effects Of Mandas On Workforce Outcomesmentioning

confidence: 99%

The impact of supportive leadership on employee outcomes during organizational mergers: An organizational-level field study.

Giessner¹,

Dawson²,

Horton³

et al. 2023

Journal of Applied Psychology

View full text Add to dashboard Cite

show abstract

“…These activities aim to achieve economies of scale, penetrate new markets, and innovate, and while they can boost market share and resources, they can negatively impact employees (House et al, 2022;. Despite the rising interest in M&A studies within finance and strategic studies, there needs to be more research on its impact on workers (House et al, 2022;Benjamin, 2021;Jabri & Ghazzawi, 2019). This research seeks to fill this gap by investigating the effects of M&A on employee performance, focusing on factors like communication, training and development, and organisational culture.…”

Section: Introductionmentioning

confidence: 99%

Banking on Performance: Employee Enhancement Strategies in Malaysia's Mergers and Acquisitions Landscape

Kanapathipillai,

Ilias,

Yan

et al. 2023

EJMMS

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This study analyses how communication, training and development, and organisational culture affect bank employees' post-merger and acquisition (M&A) performance. The study used convenience sampling to gather data from Malaysian investment banking sector employees. A total of 257 responses provided the data for this study. The sampling locations included investment banks in Malaysia that have undergone M&A, such as Aseambankers, Maybank Securities, RHB, OSK, Affin, Hwang DBS, ECM Libra, and Kenanga Investment Bank. This study's results show that all three predictor variables (Communication, Training and Development, and Organizational Culture) positively influence the Outcome variable (Employee Performance), albeit to varying degrees. Communication emerges as the most dominant factor, followed closely by Organizational Culture, while Training and Development's influence, although positive, is comparatively subdued. This underscores the crucial role these strategies play in determining employee performance outcomes in the mergers and acquisitions sphere of Malaysia. Therefore, this study can help the banking sector boost employee morale, job satisfaction, and productivity during transitions. Article visualizations:<img src="/-counters-/soc/0085/a.php" alt="Hit counter" />

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“…This dissertation adopts this perspective and assesses the knowledge on M&A failure that has come from various academic disciplines. While M&A literature has traditionally evaluated shareholder value creation from a financial discipline, a rising number of studies assess transactions from different perspectives, such as the human discipline, which focuses on management or employee behavior and their influence on the transactions' outcome (Dao & Bauer, 2021;Kempton & Sarala, 2021). Furthermore, Larsson and Finkelstein (1999) highlight the strategic discipline as another overarching discipline in which strategic decision-making, such as internationalization through cross-border acquisitions, is closely evaluated.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Shaping M&A Deal Outcomes: From Failure to Enabling Better M&A Performance

Paumen

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The M&A literature is broad and fragmented. It studies M&A success and failure from various disciplinary perspectives and examines M&A deal outcomes at separate stages of the M&A process. Despite the increase in M&A activity, M&A failure rates continue to be high throughout recent years. This dissertation comprises four separate studies which shed light on this issue. Paper I is a literature review in which I systematically analyze studies on M&A failure. The findings reveal three blind spots of the current M&A literature which need to be addressed. These are a) the need for clarity on the definition and operationalization of M&A failure, b) the need for more integration among disciplines, and c) the need to adopt a more processual perspective on M&A phases instead of a within-phase analysis. The consequent three papers are empirical studies which contribute to filling the identified research gaps. Paper II is a quantitative study on target pricing which takes different types of bidders into account. I conclude that more research is needed to understand the outperformance of private equity funds. As this stream of literature is in a nascent stage, I call for more qualitative and explorative research on the topic. In a consequent qualitative study, I explain M&A deal outcomes with regard to the private equity bidder type. In this study, three characteristics (i.e., organizational set-up, private equity investors’ professional identities, and an integrative work approach) are identified which were brought together into a theoretical framework that explains how private equity professionals can enable better M&A performance. The findings further underline the effectiveness of specific incentivization approaches applied in private equity funds. In the fourth study, the research focus is on the firm’s organizational culture, M&A teams, and individual professionals. Three prevailing team roles (i.e., project manager, expert and executor) are identified which require a specific set of soft and hard skills that explain how M&A teams can enable M&A success in terms of deal execution and completion. Furthermore, evidence to how aspects of project timing, such as deadlines and simultaneous projects, shape the team members’ work is provided. Finally, the findings underline the importance of accumulating experience and learning effects on M&A deal outcomes, shaping both the M&A team culture and the team members’ skill sets.

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Employee Perspective on Mergers and Acquisitions (M&As): A State-of-the-art Literature Review and Synthesis

Cited by 3 publications

References 74 publications

The impact of supportive leadership on employee outcomes during organizational mergers: An organizational-level field study.

The impact of supportive leadership on employee outcomes during organizational mergers: An organizational-level field study.

Banking on Performance: Employee Enhancement Strategies in Malaysia's Mergers and Acquisitions Landscape

Shaping M&A Deal Outcomes: From Failure to Enabling Better M&A Performance

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