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Continuity and Change in Mergers and Acquisitions: A Social Identity Case Study of a German Industrial Merger

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  • Johannes Ullrich
  • Jan Wieseke
  • Rolf Van Dick

Abstract

abstract It is crucial from an employee's point of view to perceive some degree of stability even in times of major organizational change. This paper examines the role of a sense of continuity for organizational identification after an organizational merger. We argue that mergers and acquisitions so often end in failures partly because the change is designed in discontinuous ways and employees do not feel they are doing the same job after the merger as before. Such discontinuous change engenders a critical tension between positive and negative effects of identification that has not yet been fully understood. To deepen the understanding of this tension, in‐depth interviews were conducted in a recently merged German industrial company. Based on these qualitative data we demonstrate how features of the post‐merger company structure and the way it was implemented may have eroded organizational identification. Finally, we propose a parsimonious model to be tested by future research, in which the sense of continuity is consisting of both observable as well as projected continuity.

Suggested Citation

  • Johannes Ullrich & Jan Wieseke & Rolf Van Dick, 2005. "Continuity and Change in Mergers and Acquisitions: A Social Identity Case Study of a German Industrial Merger," Journal of Management Studies, Wiley Blackwell, vol. 42(8), pages 1549-1569, December.
    • Handle: RePEc:bla:jomstd:v:42:y:2005:i:8:p:1549-1569
    DOI: 10.1111/j.1467-6486.2005.00556.x
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    Citations

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    Cited by:

    1. Giessner, S.R., 2011. "Is the Merger Necessary? The Interactive Effect of Perceived Necessity and Sense of Continuity on Post-Merger Identification," ERIM Report Series Research in Management ERS-2011-017-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    2. Reddy, Kotapati Srinivasa, 2015. "The State of Case Study Research in Mergers & Acquisitions: A Review of the Literature in Different Management Streams," MPRA Paper 63939, University Library of Munich, Germany, revised 2015.
    3. Giessner, S.R., 2016. "Organisational mergers: a behavioural perspective on identity management," ERIM Inaugural Address Series Research in Management EIA-2016-067-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam..
    4. Slađana Savović, 2021. "Employee Reactions To Cross-Border Acquisitions: Evidence From An Acquired Serbian Company," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 66(228), pages 43-68, January –.
    5. Simon Lloyd D. Restubog & Matthew J. Hornsey & Prashant Bordia & Sarah R. Esposo, 2008. "Effects of Psychological Contract Breach on Organizational Citizenship Behaviour: Insights from the Group Value Model," Journal of Management Studies, Wiley Blackwell, vol. 45(8), pages 1377-1400, December.
    6. Jeffrey S. Bednar & Benjamin M. Galvin & Blake E. Ashforth & Ella Hafermalz, 2020. "Putting Identification in Motion: A Dynamic View of Organizational Identification," Organization Science, INFORMS, vol. 31(1), pages 200-222, January.
    7. Victor Ming Tak Ng & Emily Guohua Huang & Michael N. Young, 2019. "Should I stay or should I go? understanding employees’ decisions to leave after mergers in Hong Kong’s banking industry," Asia Pacific Journal of Management, Springer, vol. 36(4), pages 1023-1051, December.
    8. Timmers, A.D., 2010. "The perceived cultural changes and the changes in identification of the employees during a merger between two airlines," Other publications TiSEM a71f79cd-facf-445a-a0ba-4, Tilburg University, School of Economics and Management.
    9. Diogo Alves & Ana Patrícia Duarte & Miriam Rosa & Sílvia da Silva, 2024. "Do they need us? Linking functional indispensability and voice behavior: The role of psychological ownership, job insecurity and organizational ambidexterity," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 45(2), pages 363-388, May.
    10. Sinkovics, Rudolf R. & Zagelmeyer, Stefan & Kusstatscher, Verena, 2011. "Between merger and syndrome: The intermediary role of emotions in four cross-border M&As," International Business Review, Elsevier, vol. 20(1), pages 27-47, February.
    11. Israel Drori & Amy Wrzesniewski & Shmuel Ellis, 2013. "One Out of Many? Boundary Negotiation and Identity Formation in Postmerger Integration," Organization Science, INFORMS, vol. 24(6), pages 1717-1741, December.
    12. Christophe Herriau & Lionel Touchais, 2012. "Changement et système de contrôle : une perspective dynamique," Post-Print hal-03135230, HAL.
    13. Camblanne, Lionel, 2013. "Family vision and cognition: An illustration through forest owners’ harvesting decisions," Journal of Family Business Strategy, Elsevier, vol. 4(4), pages 245-259.
    14. Zahoor, Nadia & Khan, Zaheer & Sinkovics, Rudolf R., 2022. "The Role of Emotions in Cross-Border Mergers & Acquisitions: A Systematic Review of the Inter-Disciplinary Literature and Future Research Agenda," Journal of International Management, Elsevier, vol. 28(4).
    15. Anna Łupina-Wegener & Susan C. Schneider & Rolf Dick, 2015. "The Role of Outgroups in Constructing a Shared Identity: A Longitudinal Study of a Subsidiary Merger in Mexico," Management International Review, Springer, vol. 55(5), pages 677-705, October.
    16. Park, Kathleen Marshall & Meglio, Olimpia & Bauer, Florian & Tarba, Shlomo, 2018. "Managing patterns of internationalization, integration, and identity transformation: The post-acquisition metamorphosis of an Arabian Gulf EMNC," Journal of Business Research, Elsevier, vol. 93(C), pages 122-138.
    17. Mirc, Nicola, 2012. "Connecting the micro- and macro-level: Proposition of a research design to study post-acquisition synergies through a social network approach," Scandinavian Journal of Management, Elsevier, vol. 28(2), pages 121-135.
    18. Christophe Herriau & Lionel Touchais, 2012. "Changement et système de contrôle : une perspective dynamique," Post-Print hal-01737425, HAL.
    19. Mirdita N. Elstak & Mamta Bhatt & Cees B. M. Van Riel & Michael G. Pratt & Guido A. J. M. Berens, 2015. "Organizational Identification during a Merger: The Role of Self-Enhancement and Uncertainty Reduction Motives during a Major Organizational Change," Journal of Management Studies, Wiley Blackwell, vol. 52(1), pages 32-62, January.
    20. Teerikangas, Satu & Colman, Helene Loe, 2020. "Theorizing in the qualitative study of mergers & acquisitions," Scandinavian Journal of Management, Elsevier, vol. 36(1).

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