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

Abstract

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.