Communicating change following an acquisition

Abstract

Acquisitions are characterized by complex organization changes that create a great deal of uncertainty for employees and this hinders implementation of planned changes. While research consistently highlights the importance of communication following an acquisition, it offers limited insight on what facilitates employee acceptance of associated changes. Most advice for managers focuses on the need to communicate useful, timely, accurate and sufficient information to address employee concerns. We develop that the effectiveness of communication following an acquisition also depends on perceptions of fairness. We find employee perceptions of the rationale behind decisions fully mediate the impact of the information communicated. This suggests ‘how’ decisions are made and communicated following an acquisition are equally if not more important than ‘what’ is communicated to employees. Our results are based on a mixed method research design that investigates the communication strategies of five acquisitions in India using interviews with acquiring firm managers and surveys of acquired employees.

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