Sources of Resistance to Mergers Between Groups¹

Abstract

Workers involved in a business merger often display strong ingroup/outgroup biases that can threaten the merger's success. Social identity theory helps to explain why and when such problems will occur. Using that theory, strong cohesion and successful performance were identified as two characteristics of a workgroup that should increase its resistance to a merger. An experiment involving mergers between small task groups was conducted to test this claim. Each group's cohesion and performance was used to predict its enthusiasm for a merger before it occurred, and any ingroup/outgroup biases that it displayed afterwards. Cohesion was unrelated to either of these measures, but as we predicted, more successful groups were less enthusiastic and displayed stronger biases. Relative rather than absolute success was an especially good predictor of merger resistance. The results were discussed within the context of social identity theory, which generated several suggestions for further research on business mergers.

Continuing and Changing Group Identities: The Effects of Merging on Social Identification and Ingroup Bias

“…A similar finding was obtained in a laboratory study by Haunschild et al (1994), who found that more successful groups showed more resistance to a merger and displayed stronger ingroup biases than less successful groups. If members of the dominant or more successful group experience the merger more as a continuation of their pre-merger group identity than members of the nondominant group (as demonstrated by Terry et al, 2001;van Knippenberg et al, 2002), then why would members of the dominant group show more ingroup bias than members of the nondominant group?…”

“…These merging groups often hold a special importance to their members, particularly in their capacity to form a basis for self-definition (Brewer & Miller, 1996;Deaux, 1996;Hogg & Abrams, 1988;Tajfel & Turner, 1986). In previous research on mergers, it has therefore been suggested that negative reactions to a merger may stem from the fact that mergers force group members to forfeit their pre-merger group identity and adopt a new one (e.g., Haunschild, Moreland, & Murrell, 1994). However, no empirical study to date has directly investigated how reactions to a merger are rooted in the pre-merger group identity.…”

“…Yet, despite the widespread prevalence of such mergers, they cannot be considered as generally successful. Reviews of organizational mergers, for example, reveal that these are often associated with a drop in psychological attachment to, or identification with, the organization (Schweiger & Walsh, 1990;Terry, Carey, & Callan, 2001;van Knippenberg, van Knippenberg, Monden, & de Lima, 2002;van Leeuwen & van Knippenberg, 2003), intergroup hostility and bias among the members of the merged organizations (Skevington, 1980;Terry & Callan, 1998), and a general resistance to the merger (Haunschild et al, 1994).…”

An intraindividual process approach to the relationship between extraversion and positive affect: Is acting extraverted as "good" as being extraverted?

“…In the first discussion, participants rank ordered the usefulness of 10 items available after an airplane crash in Northern Minnesota (a standard task; e.g., Haunschild, Moreland, & Murrell, 1994). In the second discussion, participants rank ordered 10 possible solutions to the parking problem on campus.…”

Process-based leadership: Fair procedures and reactions to organizational change

“…For mergers to be successful those leading a company need to implement the merger in ways that successfully engage their employees in the new company created by the merger and in its culture. In other words, mergers present a challenge to leaders who must implement the change in ways that motivates the cooperation of their employees in the new company in a situation in which valued identities are threatened and may need to change (Anastasio, Bachman, Gaertner, & Dovidio, 1997;Haunschild, Moreland, & Murrell, 1994;Hogan, Curby, & Hogan, 1994;Skevington, 1980;Terry & Callan, 1998;Terry, Callan, & Sartori, 1996;Terry, Carey, & Callan, 2001;Terry & O'Brien, 2001).…”