The Impact of Leadership and Change Management Strategy on Organizational Culture and Individual Acceptance of Change during a Merger
| Author | Marie H. Kavanagh,Neal M. Ashkanasy |
| Published date | 01 March 2006 |
| Date | 01 March 2006 |
| DOI | http://doi.org/10.1111/j.1467-8551.2006.00480.x |
The Impact of Leadership and Change
Management Strategy on Organizational
Culture and Individual Acceptance of
Change during a Merger
Marie H. Kavanagh and Neal M. Ashkanasy
UQ Business School, The University of Queensland, Brisbane, Queensland, 4072, Australia
Email: m.kavanagh@business.uq.edu.au
This article reports a longitudinal study that examined mergers between three large
multi-site public-sector organizations. Both qualitative and quantitative methods of
analysis are used to examine the effect of leadership and change management strategies
on acceptance of cultural change by individuals. Findings indicate that in many cases
the change that occurs as a result of a merger is imposed on the leaders themselves, and
it is often the pace of change that inhibits the successful re-engineering of the culture. In
this respect, the success or otherwise of any merger hinges on individual perceptions
about the manner in which the process is handled and the direction in which the culture
is moved. Communication and a transparent change process are important, as this will
often determine not only how a leader will be regarded, but who will be regarded as a
leader. Leaders need to be competent and trained in the process of transforming
organizations to ensure that individuals within the organization accept the changes
prompted by a merger.
Acquisitions, mergers and change have been an
ongoing part of the operational strategy of many
organizations for years, and have proven to be a
significant and popular means for achieving
corporate diversity, growth and rationalization
(Cartwright and Cooper, 1992). In this post-
modern era, organizations have to deal with as
much chaos as order and change is a constant
dynamic (Berquist, 1993). Organizations operat-
ing within the higher education sector have been
no exception.
The organizational culture literature reminds
us that a wide range of factors affect organiza-
tional change as produced during a merger, and
that those leaders hoping to initiate organiza-
tional change and generate follower acceptance
face a daunting task (Michaela and Burke, 2000).
The challenge is to select a set of actions that are
achievable within the capacity of the organization
to absorb change and resource constraints. Early
research building upon the ‘great man’ theory of
leadership (Judge et al., 2002) found that the
situation also plays a vital role in determining
leader effectiveness and that, to be effective,
leaders must behave differently in different situa-
tions (Stogdill, 1974; Yukl, 2002).
Much has been written about leadership
qualities and types of leadership (e.g. Bass and
Avolio, 1994; House, 1996; Conger and Kanun-
go, 1998). Bass (1985) suggests that leaders must
promote change by creating vision. Theories of
transformational leadership and organizational
change emphasize that change is accomplished
through the leader’s implementation of a unique
vision of the organization through powerful
persuasive personal characteristics and actions
designed to change internal organizational cul-
tural forms and substance (Bass and Avolio,
1994; Hatch, 1993; Porras and Robertson, 1992).
Kouzes and Posner (1987, p. 30) suggest that,
British Journal of Management, Vol. 17, S81–S103 (2006)
DOI: 10.1111/j.1467-8551.2006.00480.x
r2006 British Academy of Management
when facing significant change, ‘Leadership is the
art of mobilizing others to want to struggle for
shared aspirations’. Leaders therefore must be
skilled in change management processes if they
are to act successfully as agents of change and
motivate others to follow (Van Knippenberg and
Hogg, 2003).
Weber (1978) attributed cultural change to
‘charismatic interventions of a unique and idio-
syncratic sort’ and emphasized leadership and its
power bases and interests. Fishman and Kavanaugh
(1989) suggest that the culture of an organization
and how people respond to change and innovation
is shaped substantially by the behaviours of the
leader. More broadly, organizational leaders are
a key source of influence on organizational
culture (Schein, 1992). According to Mumford
et al. (2002), organizational climate and culture
represent collective social construction over which
leaders have substantial control and influence.
Because leadership is pre-eminently a group
process (Chemers, 2001), social identity theorists
(Haslam and Platow, 2001; Hogg and Terry,
2001; Hogg and van Knippenberg, 2003) would
argue that a shift from the personal towards the
relational (group) level of identity is appropriate
in an analysis of leadership in organizational
contexts particularly after a merger (van Knip-
penberg and van Leeuwen, 2001). Social identity
theory focuses on the notion of the self concept –
referred to as social identity – that derives from
memberships in social groups and contrasts with
personal identity, which reflects a person’s
characteristics as a unique individual (Hogg,
1996; Hogg and Abrams, 1988; Tajfel and Turn-
er, 1979). Van Knippenberg and Hogg (2003) and
van Dick (2004) argue that in high salience
groups with which people identify strongly,
leadership effectiveness is significantly influenced
by how prototypical of the group the leader is
perceived to be by the members. While the social
identity perspective may be an important one
when examining leadership and power, it is by no
means the only perspective.
Nonetheless, the influence of leaders rests on
how others regard them. According to Weber
(1978, 1996), leaders in this sense are lent prestige
when employees believe in them and what they
are doing, and are willingto accept their decisions.
Conger and Kanungo (1988) and Kotter (1988)
stress in particular that leaders need to under-
stand that management refers to processes of
planning, organizing and controlling; while lea-
dership is the process of motivating people to
change. Amabile (1998) has suggested that, by
influencing the nature of the work environment
and organizational culture, leaders can affect
organizational members’ attitude to work related
change and motivation. The challenge then is to
select a set of actions that are feasible within the
capacity of the organization to absorb change
and manage resources.
The study we report here builds on extant
literature to develop propositions about the
impact of leaders and leadership on the ability of
individuals to accept change. Change management
strategies and the effects of shifts in organizational
culture are examinedas moderating variables. This
is a longitudinal study that addresses a gap in the
literature on leadership in merger-evoked change
and places emphasis on people, as individuals, as
being essential to the outcome of any merger
process. Our results suggest that changing an
organization boils down to directing energy and
effort towards four identifiable aspects of organi-
zational life: (1) the behaviour of institutional
leaders; (2) the selection and execution of appro-
priate management strategies (particularly change
management strategies); (3) an understanding of
the organization’s basic structure, systems, and
formal processes (culture); and (4) actions taken
by leaders affecting acceptance of change by
individuals who play key roles in both formal
and informal systems (see also Nadler, Thies and
Nadler, 2001). We argue further that there has not
yet been sufficient critical analysis of the role of
leadership in termsof adoption of change manage-
ment strategies or, of the consequences that
cultural shifts caused during a merger place on
individuals and ultimately their acceptance of
change. We examine how leaders are perceived
during a merger change process and explore the
leadership qualities and styles which motivate
acceptance of change by individuals. These argu-
ments give rise to the model depicted in Figure 1.
Theoretical background and
propositions
Change management approaches
Mergers are highly complex events with a
seemingly infinite number of factors that can
lead to success or failure. Because they influence
S82 M. H. Kavanagh and N. M. Ashkanasy
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