The Challenge of Merging: Merger Patterns, Premerger Status, and Merger Support

Abstract

Employees of merging organizations often show resistance to the merger. The employees' support depends on the companies' premerger status and on the merger pattern. Based on an intergroup perspective, three studies were conducted to investigate the influence of premerger status (high, low) and merger pattern (assimilation, integration-equality, integration-proportionality, transformation) on participants' support for a pending organizational merger. Students (Study 1) and employees (Study 2) had to take the perspective of employees of a fictitious merging organization. Study 3 investigated students' perceptions of a potentially pending university merger using a 2 (status) x 3 (merger pattern: assimilation, integration-equality, integration-proportionality) design. Across all studies, the low-status group favored integration-equality and transformation whereas the high-status group preferred integration-proportionality and assimilation. Perceived threat mediated the effects. Legitimacy was a stronger mediator for effects of the low-status group.

The moderating role of transformational leadership on HR practices in M&A integration

“…Consequently, real or perceived identity threats can lead to conflicts amongst employees. Moreover, low identification with the post-M&A organization may lead to M&A failure (Ullrich and van Dick 2007;Giessner et al 2006;van Dick et al 2006).…”

Knocking on the Outgroup's Door: Seeking Outgroup Help Under Conditions of Task or Relational Conflict

“…Consider, for example, a merger of two organizations. The postmerger aggregate is typically viewed by the members involved as two separate parties that need to cooperate under the same umbrella (Giessner, Viki, Otten, Terry, & Täuber, 2006;van Leeuwen, van Knippenberg, & Ellemers, 2003). The restructuring itself can constitute a serious threat to employees' organizational identity, triggering relational conflict that is expressed in increased hostility and intergroup bias (Terry, Carey, & Callan, 2001).…”

Group processes, intergroup relations and human resource practices in mergers and acquisitions post-combination: A critical review and research agenda for the future

“…In the cases of M&As which rarely assume equal partners and where formerly distinct corporate members are re-categorized into the new merged entity (van Dick, Ullrich and Tissington, 2006), the existing social comparisons between merging partners and the merged organization, are activated, utilizing the Social Identity Approach (SIA) to describe the shift from the pre-to the post-merger organizational membership and identity: to explore and explain the intergroup relations in merger activities (Giessner, et al 2006).…”

“…On the other hand, the combine or blend (or transformation) merger patterns depicting either the establishment of a completely new organizational entity or an equal exercise of influence from both or all merger partners post-combination, are perceived as more legitimate merger patterns by members of the high pre-merger organizational status partner (Giessner et al 2006), since they expect that they are about to have considerable representation and subsequent influence in the new merger reality which indicates a more fair position in the post-merger organization.…”

“…Reverse merger pattern represents a rather unusual merger case where the acquiring (dominant) merger partner is assimilated by the acquired (dominated) and finally, preservation integration pattern depicts a situation of low change in both corporate partners with the acquired (dominated) merging organization retaining independence in culture. Giessner et al (2006) indicated that employees of the high status pre-merger organization are most likely to prefer a merger integration pattern that resembles that of either assimilation (absorption) or transformation (combine); under these ways of integration they are expected to maintain a strong sense of continuity from their pre-merger organization firmly represented in the new post-merger organization. For instance, absorption merger integration approach is empirically found to be associated with autonomy removal even in cases when one merging partner is a large organization comparable to the other (Weber, Tarba and Rozen Bachar, 2012).…”