The different paths to post‐merger identification for employees from high and low status pre‐merger organizations

Abstract

Summary A well‐known downside of organizational mergers is that employees fail to identify with the newly formed organization. We argue that developing an understanding of factors that affect post‐merger identification requires taking the pre‐merger status of the merger partners relative to each other into account. This is because relative pre‐merger status determines employees' susceptibility to different aspects of the merger process. Specifically, for employees of a high status pre‐merger organization, we expected post‐merger identification to be strongly influenced by (i) pre‐merger identification and (ii) the perceived change in the status. In contrast, we expected post‐merger identification of employees of a low status pre‐merger organization to be strongly affected by the perceived justice of the merger event. Longitudinal data were obtained from a merger of two public sector organizations and the results supported our hypotheses. Our study shows that the extent to which pre‐merger identification, status change, and justice are important determinants of post‐merger identification depends on the relative pre‐merger status of the merger partners. Our discussion focuses on theoretical implications and managerial ramifications of these findings. Copyright © 2016 John Wiley & Sons, Ltd.

A Comparative Study of Cross-Border and Domestic Acquisition Performances in the South Korean M&A Market: Testing the Two Competing Theories of Culture

“…The importance of intergroup status relations has been repeatedly stressed by a number of prior M&A studies in the field of social psychology but most of them did not examined it from a "business" perspective using the post-merger performance as a dependent variable [37]. Also, although there are a growing number of management studies that have begun to stress the importance of status positions for M&A success recently, most of them except a few are case studies and suffer from the issue of generalizability [51,52].…”

“…Surprisingly, the results showed that the initial cultural similarities or differences between the premerger organizations had no significant impact on the integration outcomes. Moreover, any attempts to deliberately eliminate premerger identities, in fact, made it harder for employees to interact with one another, which ultimately led to deeper interorganizational conflicts [34][35][36][37].…”

Institutional Effects of Higher Education Acquisitions: The Case of Texas A&M School of Law

“…Interpretation of results from this study also concerns the balance between pre- and postacquisition status (relative position in a hierarchy) and reputation (collective understanding of particular aspects of a firm’s quality; McDonnell & King, 2018) and institutional control over those aspects. Research on firm mergers in other industries that situates status/reputation differentials as being critical to postmerger effects on aspects of organizational identity and performance (Graebner, Heimeriks, Huy, & Vaara, 2017; Lipponen, Wisse, & Jetten, 2017) can provide insight into how higher education mergers and acquisitions affect different groups, as can research on effects of status/reputation differentials in organizations broadly speaking (e.g., Delmestri & Greenwood, 2016). In the present case, A&M is one of the largest higher education institutions in the United States and has the largest single campus in the state of Texas, and the former TW law school was a hyperregional professional school such that most students, faculty, and administrators likely felt little agency in the acquisition process and were thus limited in their ability to respond discursively.…”

Challenges and Resilience: Managers’ Perceptions of Firm Performance Following M&As

“…As indicated above, some literature emphasises that asymmetrical benefits accrue to the two firms involved in M&As. A major reason why M&As fail is because employees do not identify with the consolidated organisation and the degree to which they do so will reflect the pre‐M&A status of firms relative to each other (Lipponen et al, ). Within the acquired firm, a sense of independent identity and relative status is diluted, whereas in the acquirer firm it is enhanced (Papadakis & Thanos, ).…”