Effects of work attitudes on reactions to a pending corporate acquisition: A qualitative and quantitative investigation

Abstract

This study is a snapshot of employee reactions to a pending acquisition at a specific point in the acquisition process---four months after the acquisition announcement and two weeks prior to a final shareholder vote to accept the offer. Two hundred and ninety-three union and non-union employees responded to a questionnaire measuring their reactions of psychological stress, intention to leave, "merger syndrome" (a new measure developed from the literature for this study), and trust in acquirer's management. Respondents also completed measures of organizational identification, threat to continued employment, job involvement, union identification and union support of the pending acquisition (the last two were collected for union employees only). The data were submitted to hierarchical regression analyses, examining the direct effects of the dependent measures (psychological stress, intention to leave, merger syndrome, and trust in acquirer's management) on the independent variables (organizational identification, threat to continued employment, job involvement, and union identification), as well as the interactions with threat and union support. Unexpectedly, psychological stress was not significantly influenced by any of the independent variables. High levels of organizational identification were related to increased merger syndrome levels, as expected, but the increased trust in acquirer's management and reduced intention to leave were in the opposite direction of the prediction. Threat to continued employment only acted as a moderator with job involvement on the merger syndrome, with low job involved employees under threat reporting more merger syndrome. As expected, threat was related to increased intention to leave and lower trust in acquirer's management. High job involvement was associated with lower intention to leave and higher trust in acquirer's management. There were no direct effects of union identification, but it did interact with union support on merger syndrome and trust in acquirer's management. High levels of union identification and high union support for the acquisition unexpectedly lead to higher levels of merger syndrome, while high levels of union identification and high union support lead to higher trust in acquirer's management. The limited findings for organizational identification are discussed in light of social identity theory and effective merger management