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When Organizational Justice Matters for Affective Merger Commitment

Author

Listed:
  • Ralf Bebenroth

    (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan)

  • Kai Oliver Thiele

    (Hamburg University of Technology(TUHH), Germany and Human Resource Management and Organizations (HRMO), Germany)

Abstract

We investigate when organizational justice matters to employees' commitment in the post-acquisition process after a company is overtaken in a cross-border acquisition. There is overwhelming evidence that employees who are treated fairly during acquisitions are more committed to their new firms. We extend this finding by dividing organizational justice into three sub-dimensions: informational justice, interpersonal justice, and procedural justice. We find evidence that procedural justice is an important antecedent of affective merger commitment at an early stage of the integration period, while informational justice becomes important at a later stage. Further analysis on heterogeneity between the target firm's employees and the bidder firm's employees reveals that, immediately after the acquisition, target-firm's employees value knowing where they will be at the new firm (procedural justice), while bidder-firm employees are more concerned about communication and transparency (informational justice). Our results point to the importance of organizational justice in a cross-border M&A setting and the need for a separate study of issues related to bidder firms and target firms.

Suggested Citation

  • Ralf Bebenroth & Kai Oliver Thiele, 2015. "When Organizational Justice Matters for Affective Merger Commitment," Discussion Paper Series DP2015-22, Research Institute for Economics & Business Administration, Kobe University.
    • Handle: RePEc:kob:dpaper:dp2015-22
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    File URL: https://www.rieb.kobe-u.ac.jp/academic/ra/dp/English/DP2015-22.pdf
    File Function: First version, 2015
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    References listed on IDEAS

    as
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    2. Kimberly M. Ellis & Taco H. Reus & Bruce T. Lamont, 2009. "The effects of procedural and informational justice in the integration of related acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 30(2), pages 137-161, February.
    3. Kimberly M. Ellis & Taco H. Reus & Bruce T. Lamont, 2009. "Erratum: The effects of procedural and informational justice in the integration of related acquisitions," Strategic Management Journal, Wiley Blackwell, vol. 30(2), pages 1-1, February.
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    5. Shapiro, Debra L. & Buttner, E. Holly & Barry, Bruce, 1994. "Explanations: What Factors Enhance Their Perceived Adequacy?," Organizational Behavior and Human Decision Processes, Elsevier, vol. 58(3), pages 346-368, June.
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    Cited by:

    1. Ashish Malik & Ralf Bebenroth, 2017. "Mind Your Language! : Role of Target Firm Language in Post-Merger Integration," Discussion Paper Series DP2017-15, Research Institute for Economics & Business Administration, Kobe University.

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    Keywords

    Lobby; Theorisation; Competition policy; Publishing; Japan; Resale price maintenance; Neoliberalism;
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