IDEAS home Printed from https://ideas.repec.org/a/eee/iburev/v25y2016i1p103-113.html
   My bibliography  Save this article

Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions

Author

Listed:
  • Rao-Nicholson, Rekha
  • Khan, Zaheer
  • Stokes, Peter

Abstract

This paper examines the impact of leadership on targets’ employee psychological safety (EPS), characterized by employees’ expectation of job and remuneration stability, during the cross-border mergers and acquisitions (M&As) by emerging market multinational companies (EMNEs). The M&As by Indian and Chinese companies forms the empirical context of this study and the case survey method is used to examine the effect of leadership on EPS. The results show that the EMNEs’ leadership visibility during the M&A process has no impact on the EPS, whereas, the trust in the EMNEs’ leadership has positive effect on the EPS. The deal status has a moderating effect on the leadership visibility and positively affects the EPS. This research finds evidence of target country differences in terms of the effect of EMNEs’ leadership on EPS and limited evidence of such effect for acquirer nationality differences.

Suggested Citation

  • Rao-Nicholson, Rekha & Khan, Zaheer & Stokes, Peter, 2016. "Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions," International Business Review, Elsevier, vol. 25(1), pages 103-113.
    • Handle: RePEc:eee:iburev:v:25:y:2016:i:1:p:103-113
    DOI: 10.1016/j.ibusrev.2015.09.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0969593115300275
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ibusrev.2015.09.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Amar K. J. R. Nayak, 2011. "Growth of Indian Multinationals," Palgrave Macmillan Books, in: Indian Multinationals, chapter 4, pages 49-91, Palgrave Macmillan.
    2. Dollard, Maureen F. & Neser, Daniel Y., 2013. "Worker health is good for the economy: Union density and psychosocial safety climate as determinants of country differences in worker health and productivity in 31 European countries," Social Science & Medicine, Elsevier, vol. 92(C), pages 114-123.
    3. Rikard Larsson & Sydney Finkelstein, 1999. "Integrating Strategic, Organizational, and Human Resource Perspectives on Mergers and Acquisitions: A Case Survey of Synergy Realization," Organization Science, INFORMS, vol. 10(1), pages 1-26, February.
    4. Gunkel, Marjaana & Schlaegel, Christopher & Rossteutscher, Tobias & Wolff, Birgitta, 2015. "The human aspect of cross-border acquisition outcomes: The role of management practices, employee emotions, and national culture," International Business Review, Elsevier, vol. 24(3), pages 394-408.
    5. Moeller, Miriam & Harvey, Michael & Griffith, David & Richey, Glenn, 2013. "The impact of country-of-origin on the acceptance of foreign subsidiaries in host countries: An examination of the ‘liability-of-foreignness’," International Business Review, Elsevier, vol. 22(1), pages 89-99.
    6. Harvey, Michael & Novicevic, Milorad M. & Buckley, M. Ronald & Fung, Helen, 2005. "Reducing inpatriate managers' 'Liability of Foreignness' by addressing stigmatization and stereotype threats," Journal of World Business, Elsevier, vol. 40(3), pages 267-280, August.
    7. Chung, Goo Hyeok & Du, Jing & Choi, Jin Nam, 2014. "How do employees adapt to organizational change driven by cross-border M&As? A case in China," Journal of World Business, Elsevier, vol. 49(1), pages 78-86.
    8. 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.
    9. Athina Vasilaki, 2011. "The Relationship Between Transformational Leadership and Postacquisition Performance," International Studies of Management & Organization, Taylor & Francis Journals, vol. 41(3), pages 42-58, January.
    10. Günter K. Stahl & Duncan N. Angwin & Philippe Very & Emanuel Gomes & Yaakov Weber & Shlomo Yedidia Tarba & Niels Noorderhaven & Haim Benyamini & Dave Bouckenooghe & Samia Chreim & Muriel Durand & Méla, 2013. "Sociocultural Integration in Mergers and Acquisitions: Unresolved Paradoxes and Directions for Future Research," Post-Print halshs-00862249, HAL.
    11. Wang, Chengqi & Hong, Junjie & Kafouros, Mario & Boateng, Agyenim, 2012. "What drives outward FDI of Chinese firms? Testing the explanatory power of three theoretical frameworks," International Business Review, Elsevier, vol. 21(3), pages 425-438.
    12. Ying ZHU & Malcolm WARNER & Tongqing FENG, 2011. "Employment relations “with Chinese characteristics”: The role of trade unions in China," International Labour Review, International Labour Organization, vol. 150(1-2), pages 127-143, June.
    13. Günter K. Stahl & Chei Hwee Chua & Amy L. Pablo, 2012. "Does National Context Affect Target Firm Employees’ Trust in Acquisitions?," Management International Review, Springer, vol. 52(3), pages 395-423, June.
    14. Zhang, Jianhong & Zhou, Chaohong & Ebbers, Haico, 2011. "Completion of Chinese overseas acquisitions: Institutional perspectives and evidence," International Business Review, Elsevier, vol. 20(2), pages 226-238, April.
    15. Luo, Yadong & Shenkar, Oded & Nyaw, Mee-Kau, 2002. "Mitigating liabilities of foreignness: Defensive versus offensive approaches," Journal of International Management, Elsevier, vol. 8(3), pages 283-300.
    16. Kohli, Reena & Mann, Bikram Jit Singh, 2012. "Analyzing determinants of value creation in domestic and cross border acquisitions in India," International Business Review, Elsevier, vol. 21(6), pages 998-1016.
    17. Ben Kedia & Nolan Gaffney & Jack Clampit, 2012. "EMNEs and Knowledge-seeking FDI," Management International Review, Springer, vol. 52(2), pages 155-173, April.
    18. Ning, Lutao & Kuo, Jing-Ming & Strange, Roger & Wang, Boya, 2014. "International investors’ reactions to cross-border acquisitions by emerging market multinationals," International Business Review, Elsevier, vol. 23(4), pages 811-823.
    19. Balasubramanian Elango & S. Prakash Sethi, 2007. "An exploration of the relationship between country of origin (COE) and the internationalization-performance paradigm," Management International Review, Springer, vol. 47(3), pages 369-392, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ibeh, Kevin & Makhmadshoev, Dilshod, 2018. "Post-acquisition integration behavior of nascent African multinational enterprises," Journal of Business Research, Elsevier, vol. 93(C), pages 255-267.
    2. Szkudlarek, Betina & Osland, Joyce S. & Nardon, Luciara & Zander, Lena, 2020. "Communication and culture in international business – Moving the field forward," Journal of World Business, Elsevier, vol. 55(6).
    3. Mukherjee, Debmalya & Kumar, Satish & Mukherjee, Deepraj & Goyal, Kirti, 2022. "Mapping five decades of international business and management research on India: A bibliometric analysis and future directions," Journal of Business Research, Elsevier, vol. 145(C), pages 864-891.
    4. 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).
    5. Patel, Parth & Bhanugopan, Ramudu & Sinha, Paresha & Prikshat, Verma & Boyle, Brendan, 2024. "Home country and firm-specific advantage influences on HRM replication versus adaptation in EMNEs operating in advanced economies: A qualitative comparative analysis," Journal of Business Research, Elsevier, vol. 170(C).
    6. Kevin I.N. Ibeh, . "Why do African multinationals invest outside their home region? Should they?," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Durand, Muriel, 2016. "Employing critical incident technique as one way to display the hidden aspects of post-merger integration," International Business Review, Elsevier, vol. 25(1), pages 87-102.
    2. Jane W. Lu & Hao Ma & Xuanli Xie, 2022. "Foreignness research in international business: Major streams and future directions," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 53(3), pages 449-480, April.
    3. Khan, Zaheer & Soundararajan, Vivek & Wood, Geoffrey & Ahammad, Mohammad Faisal, 2020. "Employee emotional resilience during post-merger integration across national boundaries: Rewards and the mediating role of fairness norms," Journal of World Business, Elsevier, vol. 55(2).
    4. Wang, Daojuan & Hain, Daniel S. & Larimo, Jorma & Dao, Li T., 2020. "Cultural differences and synergy realization in cross-border acquisitions," International Business Review, Elsevier, vol. 29(3).
    5. 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).
    6. Joardar, Arpita & Wu, Sibin, 2017. "Liabilities and benefits: Examining the two sides of the foreignness coin from entrepreneurial perspective," International Business Review, Elsevier, vol. 26(6), pages 1157-1167.
    7. Li, Linjie & Liu, Xiaming & Yuan, Dong & Yu, Miaojie, 2017. "Does outward FDI generate higher productivity for emerging economy MNEs? – Micro-level evidence from Chinese manufacturing firms," International Business Review, Elsevier, vol. 26(5), pages 839-854.
    8. Aybar, Bülent & Thanakijsombat, Thanarerk, 2015. "Financing decisions and gains from cross-border acquisitions by emerging-market acquirers," Emerging Markets Review, Elsevier, vol. 24(C), pages 69-80.
    9. Buitrago R., Ricardo E. & Barbosa Camargo, María Inés, 2021. "Institutions, institutional quality, and international competitiveness: Review and examination of future research directions," Journal of Business Research, Elsevier, vol. 128(C), pages 423-435.
    10. Alessia Amighini & Claudio Cozza & Elisa Giuliani & Roberta Rabellotti & Vittoria Scalera, 2015. "Multinational enterprises from emerging economies: what theories suggest, what evidence shows. A literature review," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 42(3), pages 343-370, September.
    11. Bamiatzi, Vassiliki & Efthyvoulou, Georgios & Jabbour, Liza, 2017. "Foreign vs domestic ownership on debt reduction: An investigation of acquisition targets in Italy and Spain," International Business Review, Elsevier, vol. 26(5), pages 801-815.
    12. He, Xinming & Zhang, Jianhong, 2018. "Emerging market MNCs' cross-border acquisition completion: Institutional image and strategies," Journal of Business Research, Elsevier, vol. 93(C), pages 139-150.
    13. Muhammad Waseem Bari & Muhammad Abrar & Mohsin Bashir & Sajjad Ahmad Baig & Meng Fanchen, 2019. "Soft Issues During Cross-Border Mergers and Acquisitions and Industry Performance, China–Pakistan Economic Corridor Based View," SAGE Open, , vol. 9(2), pages 21582440198, April.
    14. Gilbert Kofi Adarkwah & Tine Petersen Malonæs, 2022. "Firm-specific advantages: a comprehensive review with a focus on emerging markets," Asia Pacific Journal of Management, Springer, vol. 39(2), pages 539-585, June.
    15. Tao, Fang & Liu, Xiaohui & Gao, Lan & Xia, Enjun, 2017. "Do cross-border mergers and acquisitions increase short-term market performance? The case of Chinese firms," International Business Review, Elsevier, vol. 26(1), pages 189-202.
    16. Bauer, Florian & King, David & Matzler, Kurt, 2016. "Speed of acquisition integration: Separating the role of human and task integration," Scandinavian Journal of Management, Elsevier, vol. 32(3), pages 150-165.
    17. Ai, Qi & Tan, Hui, 2020. "Uncovering neglected success factors in post-acquisition reverse capability transfer: Evidence from Chinese multinational corporations in Europe," Journal of World Business, Elsevier, vol. 55(3).
    18. Strobl, Andreas & Bauer, Florian & Matzler, Kurt, 2020. "The impact of industry-wide and target market environmental hostility on entrepreneurial leadership in mergers and acquisitions," Journal of World Business, Elsevier, vol. 55(2).
    19. Zhang, Jianhong & Jiang, Jiangang & Noorderhaven, Niels, 2019. "Is certification an effective legitimacy strategy for foreign firms in emerging markets?," International Business Review, Elsevier, vol. 28(2), pages 252-267.
    20. Qi Ai & Hui Tan, 2018. "The intra-firm knowledge transfer in the outward M&A of EMNCs: Evidence from Chinese manufacturing firms," Asia Pacific Journal of Management, Springer, vol. 35(2), pages 399-425, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:iburev:v:25:y:2016:i:1:p:103-113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/133/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.