Organizational commitment during organizational changes

Abstract

Purpose Mergers and acquisitions (M&As) represent major organizational changes, and create traumatic, stressful situations to employees. The purpose of this paper is to study the acquired key employees' organizational commitment towards the acquiring organization during the post‐acquisition integration phase. Design/methodology/approach This paper is a longitudinal single case study of a European‐acquisition within the high‐tech sector. Data are collected for nearly two years both with four repetitive quantitative surveys and 58 interviews. Findings The results imply that the key employees perceive the organizational changes differently. In friendly acquisitions, key employees not only expect organizational changes but also they may have an active role in inducing changes. Moreover, the results imply that key employees' organizational commitment is closely linked to the prior role of the key employees in the acquired company, and how they perceive and experience the post‐acquisition integration phase. Research limitations/implications This research is a single case study, which strives for analytical generalisation rather than statistical generalisation. The results of the case study are limited to the context of European small‐ and medium‐sized enterprises (SMEs) and the Indian IT industry, and not generalisable as such to other companies or industries. However, this research contributes to the growing interest in understanding how change is experienced by individuals, and especially how key persons and managers from the acquired company experience changes following a cross‐border acquisition. Practical implications The findings of this paper provide useful insights to managers involved in M&As on how key persons from acquired SMEs may react to changes following a friendly acquisition. Originality/value This paper focuses on the key persons of an acquired high‐tech company and provides unique insights on how key persons may be critical in M&As not only for their tacit knowledge but also from the change leadership point of view. Commitment is crucial from both the retention and change management perspective.

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