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Employee sensemaking in mergers : How deal characteristics shape employee attitudes

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  • Katty Marmenout

    (EM - EMLyon Business School)

Abstract

This experimental study examines how employees make sense of a merger announcement and investigates the relationship between deal characteristics (culture clash potential, degree of integration, position in deal structure) and employee attitudes. A sensemaking mechanism is proposed and tested on graduate students subjected to merger scenarios. As employees make sense of the merger, higher perceived uncertainty is associated with greater dysfunctional outcomes. Although perceived uncertainty mediates the effect of perceived cultural similarity on employee attitudes, this is not so for perceived power. An employee's position in the deal structure strongly influences perceived power, but unexpectedly, higher perceived power does not reduce uncertainty. Still, greater perceived power is directly associated with lower intention to leave and greater satisfaction. Although the degree of integration did not affect any of the outcome variables directly, complex interaction effects were found. Complementary qualitative data analysis sheds light on how employees make sense of the deal.

Suggested Citation

  • Katty Marmenout, 2010. "Employee sensemaking in mergers : How deal characteristics shape employee attitudes," Post-Print hal-02312640, HAL.
  • Handle: RePEc:hal:journl:hal-02312640
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    Citations

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    Cited by:

    1. Thuy, Nguyen Thi Bich & Van, Phan Dang Ngoc Yen, 2020. "Employee Commitment To Organizational Change With The Role Of Job Satisfaction And Transformational Leadership," OSF Preprints vs689, Center for Open Science.
    2. David P. Kroon & Niels G. Noorderhaven & Kevin G. Corley & Eero Vaara, 2022. "Hard and Soft Integration: Towards a Dynamic Model of Post‐Acquisition Integration," Journal of Management Studies, Wiley Blackwell, vol. 59(5), pages 1132-1161, July.
    3. 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.
    4. Bebenroth, Ralf & Thiele, Kai Oliver, 2015. "Identification to oneself and to the others: Employees' perceptions after a merger," Working Papers on East Asian Studies 106/2015, University of Duisburg-Essen, Institute of East Asian Studies IN-EAST.
    5. 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.
    6. Dr krishn A. Goyal Goyal & Vijay Joshi, 2012. "Impact of Merger on Stress Level of Employees (A Case Study of Erstwhile Bank of Rajasthan Ltd.)," International Journal of Business Research and Management (IJBRM), Computer Science Journals (CSC Journals), vol. 3(5), pages 234-248, October.
    7. Philippe Monin & Niels Noorderhaven & Eero Vaara & David Kroon, 2013. "Giving Sense to and Making Sense of Justice in Postmerger Integration," Post-Print hal-02276708, HAL.
    8. Nguyen Thi Bich Thuy & Phan Dang Ngoc Yen Van, 2020. "Employee Commitment to Organizational Change with the Role of Job Satisfaction and Transformational Leadership," Technium Social Sciences Journal, Technium Science, vol. 2(1), pages 1-17, January.

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