Modelling post‐acquisition employee behavior: typology and determining factors
| Published date | 01 February 1998 |
| Date | 01 February 1998 |
| DOI | https://doi.org/10.1108/01425459810369841 |
| Pages | 73-91 |
| Author | Dimitris Bourantas,Irene I. Nicandrou |
| Subject Matter | HR & organizational behaviour |
Modelling post-
acquisition
employee
behavior
73
Modelling post-acquisition
employee behavior: typology
and determining factors
Dimitris Bourantas and Irene I. Nicandrou
University of Athens in Business and Economics, Athens, Greece
Despite the financial and strategic considerations in the planning stage of an
acquisition, many acquisitions have been regarded as unsuccessful, with
acquiring firms exhibiting poor performance and low profits or stock prices
(Agrawal et al., 1992; Amihud et al. 1990; Business Week, 1988; Datta et al., 1992;
Fowler and Schmidt, 1988; Marks, 1988; Ravenscraft and Scherer, 1987; Travlos
1987). The portion of the failure that has been unexplained has been attributed
to human-related problems (Cartwright and Cooper 1990; Napier 1989).
Of prior research on human resource issues of mergers and acquisitions,
most has been focused on the effects of acquisitions on the work attitudes and
behaviors of the employees of the acquired firm. All involved in mergers and
acquisitions stress the importance of the “neglected” human factor for the
success of the acquisition. Vinten (1993) remarks on the inconsistency that
exists between the actual lack of interest that acquiring companies show in the
human factor before the acquisition (less than 37 per cent of the companies
conduct a management/personnel audit) and the importance of the human-
related aspects for the outcome of the acquisition and society in general. This
de-emphasis of the human aspects is reflected in the number of research studies
undertaken in this area. Up to now there has been no significant effort showing
what are the causes and consequences of the various employee reactions to the
changes that an acquisition implies. Despite the increasing interest and the
growing amount of research on the impact of mergers and acquisitions on
human resource issues, there are only a few studies to draw upon. Most of the
literature is based upon anecdotal evidence and hypothetical speculation.
Researchers working in this area have identified a wide range of potential
responses to the changes that an acquisition implies. There is no single or
simple answer to the question, “How do acquisitions affect the work behaviors
and attitudes of the employees of the acquired firm?”. Thus, employees of the
acquired firm may react positively, negatively, or indifferently, subsequent to
the acquisition.
However, there is no development of a systematic typology of employee
behavior to acquisitions. In the absence of such a typology and model, it is
difficult to develop a comprehensive theory-based understanding of employee
reactions to mergers and acquisitions. The goal of this paper is to cover this
deficiency in the literature by developing a conceptual framework for studying
employee behaviors in mergers and acquisitions and proposing a model that Employee Relations,
Vol. 20 No. 1, 1998, pp. 73-91.
© MCBUniversity Press, 0142-5455
Received June 1997
Revised September 1997
Employee
Relations
20,1
74
determines the impact of a variety of factors on these behaviors. The model
proposed here, displayed in Figure 1, shows the relationship between the
factors affecting the formation of employee attitudes toward the acquisition and
their subsequent influence on employee behaviors.
Figure 1.
Model of employee
behavior
ACQUISITION
CHARACTERISTICS
• Relationship of
Managerial Teams
• Climate
• Communication
INTEGRATION
CHARACTERISTICS
• Degree of Integration
• Degree of Employee
Participation
• Pace of Change
Implementation
• Employee Relations
• Communication
ORGANIZATIONAL
CHARACTERISTICS
• Culture
• Management Styles
• Systems &
Procedures
• Size
INDIVIDUAL
CHARACTERISTICS
• Demographic
Variables
• Hierarchical Level
• Uncertainty
• Tolerance to
Ambiguity
• Tolerance to Change
• Locus of Control
INTERVENING
VARIABLES
–Cost of Action
–Satisfaction
–Investment Size
–Quality of
Alternatives
–Expectations
– Trust to Management
–Intent to Quit
BEHAVIORS
–Loyalty
–Compliance
–Voice
–Neglect
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