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Does National Context Affect Target Firm Employees’ Trust in Acquisitions?

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  • Günter K. Stahl

    (Vienna University of Economics and Business
    Organizational Behavior Area, INSEAD)

  • Chei Hwee Chua

    (University of Miami)

  • Amy L. Pablo

    (University of Calgary)

Abstract

In this study, we test the assumption that the way target firm employees respond to a takeover is contingent on their national origin. The antecedents of target firm member trust in the acquiring firm management were examined in a cross-national sample of German and Singaporean employees using a policy-capturing design. Five factors hypothesized to affect target firm member trust after a takeover were found to be significant influences on employees’ trust judgments in a decision-making simulation: (i) combining firms’ collaboration history, (ii) mode of takeover, (iii) whether it was a domestic or cross-border acquisition, (iv) degree of autonomy removal, and (v) attractiveness of the acquiring firm’s human resource policies and reward system. Further analyses suggest that the relative importance of these factors in predicting target firm employees’ reactions to a takeover varies depending on their national origin. We conclude that companies engaged in cross-border acquisitions need to consider contingencies in the cultural and institutional contexts in which the acquired firms are embedded and adapt their approaches for integrating them accordingly.

Suggested Citation

  • 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.
  • Handle: RePEc:spr:manint:v:52:y:2012:i:3:d:10.1007_s11575-011-0099-7
    DOI: 10.1007/s11575-011-0099-7
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    3. Dan S. Chiaburu & Subrata Chakrabarty & Jiexin Wang & Ning Li, 2015. "Organizational Support and Citizenship Behaviors: A Comparative Cross-Cultural Meta-Analysis," Management International Review, Springer, vol. 55(5), pages 707-736, October.
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    6. Dörrenbächer, Christoph & Witzmann, Natalie, 2015. "The link between cultural due diligence and socio-cultural post-merger integration management as a critical success factor in M&As," Working Papers 84, Berlin School of Economics and Law, Institute of Management Berlin (IMB).
    7. Diana W.P. Kwok, 2018. "Boundary spanning and subordinate—leader trust: A tale of two acquisitions in a multicultural emerging economy," Post-Print hal-01744451, HAL.
    8. Wafa Tariq Waqar & Yan Ma, 2024. "Acquirers’ corporate governance ratings and the likelihood of deal completion: Do stakeholders care about the agency hazards of European cross-border acquirers?," Review of Managerial Science, Springer, vol. 18(10), pages 2815-2848, October.
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