Focusing on the bright tomorrow? A longitudinal study of organizational identification and projected continuity in a corporate merger

Abstract

Past research provides evidence that organizational identification is a key factor predicting employees’ behaviours during mergers and acquisitions. In particular, recent studies demonstrate that members of the subordinate merger partner, in contrast to the dominant group, often find it difficult to transfer their identification to the post-merger organization. To understand this difference between dominant and subordinate groups, we examined employees’ sense of projected continuity in the future. We argue that projected continuity mediates the differential relationships between pre-merger and post-merger identification and propose that pre-merger identification relates positively to projected continuity in the dominant group but negatively in the subordinate group. As a result, the overall relationship between pre- and post-merger identification should be reduced or eliminated in the subordinate compared with the dominant group. We tested our hypotheses in a survey (N = 492) distributed in a merger of two international pharmaceutical companies at the beginning of the post-merger integration and 15 months later. Results were consistent with our assumptions of a moderated mediation effect. We conclude that a key challenge in merger integration is to support high identifiers in the subordinate group in developing a projected continuity or a focus on ‘the bright tomorrow'.

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