Following abundant anecdotal evidence of low morale in mergers and its important detrimental effect on postmerger performance, the purpose of this multimethod experimental study was to fi nd out how employee reactions to a merger evolve over time following peer interaction (i.e., discussion with colleagues). Using a scenario study, initial reactions to a merger announcement were compared with socially infl uenced reactions. As anticipated, an overall strong detrimental effect of peer interaction on employee reactions was observed. Next, fi ndings indicate that deal characteristics (culture clash potential, announced degree of integration, and position in deal structure) play a moderating role. Indeed, how peer interaction affects outcomes depends on the position in the deal structure. Qualitative data analysis of the group discussions sheds light on how employee reactions become more detrimental. This process is conceptualized as "collective rumination, " defi ned as repetitively and passively discussing organizational problems and their negative consequences with a group of peers. The study concludes with implications for practice and identifi es three powerful levers (active involvement, distraction, and positive leadership) to infl uence the way in which employees react to the event.
This experimental study examines how employees make sense of a merger announcement and investigates the relationship between deal characteristics (culture clash potential, degree of integration, position in deal structure) and employee attitudes. A sensemaking mechanism is proposed and tested on graduate students subjected to merger scenarios. As employees make sense of the merger, higher perceived uncertainty is associated with greater dysfunctional outcomes. Although perceived uncertainty mediates the effect of perceived cultural similarity on employee attitudes, this is not so for perceived power. An employee's position in the deal structure strongly influences perceived power, but unexpectedly, higher perceived power does not reduce uncertainty. Still, greater perceived power is directly associated with lower intention to leave and greater satisfaction. Although the degree of integration did not affect any of the outcome variables directly, complex interaction effects were found. Complementary qualitative data analysis sheds light on how employees make sense of the deal.
Understanding the emergence, development, growth, or termination of dynamic capabilities (DCs) remains a critical topic of organizational research. This study contributes to and expands this stream of research by investigating the transformation and transition between two distinct DCs—acquisition-based and innovation-based—within the global logistics provider DHL across four time brackets from 1997 to 2006. Using content analysis of interviews with DHL’s managers and secondary sources, we identify DCs through bundles of underlying routines and track their evolution. Our findings provide evidence that a specific DC undergoes transformation before the company transitions to another DC, following a reactive sequence. These insights contribute to research on capability development by challenging traditional life-cycle explanations.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.