Working Under a Black Cloud: How to Sustain Organizational Identification after a Merger*
| Author | Patrick A. Tissington,Rolf Dick,Johannes Ullrich |
| Date | 01 March 2006 |
| DOI | http://doi.org/10.1111/j.1467-8551.2006.00479.x |
| Published date | 01 March 2006 |
Working Under a Black Cloud: How to
Sustain Organizational Identification after
aMerger
*
Rolf van Dick, Johannes Ullrich
w
and Patrick A. Tissington
Aston Business School, Aston University, Work and Organizational Psychology Group, Aston Triangle,
Birmingham B4 7ET, UK, Birmingham, UK, and
w
Philipps-University, Department of Psychology, Gutenberg
Str18, 350 37 Marburg, Germany
Corresponding author email: r.vandick@aston.ac.uk
This article argues against the merger folklore that maintains that a merger negatively
affects well-being and work attitudes primarily through the threat of job insecurity. We
hold that the workplace is not only a resource for fulfilling a person’s financial needs,
but that it is an important component of the self-concept in terms of identification with
the organization, as explained by social identity theory. We unravel the key concepts of
the social identity approach relevant to the analysis of mergers and review evidence
from previousstudies. Then, we present a studyconducted during a merger to substantiate
our ideas about the effects of post-merger organizational identification above and
beyond the effects of perceived job insecurity. We recommend that managers should
account for these psychological effects through the provision of continuity and specific
types of communication.
Introduction
Mergers and acquisitions are popular strategic
means for organizations to enhance profitability or
to survive amid ever more fierce global competi-
tion. The frequency of organizational mergers
sharply increased at the end of the last century,
while their size and degree of internationalization
also escalated. These developments, in conjunction
with a high rate of financial failure, have made
merger an issue of public concern beyond board-
rooms and the business press. The news of an
upcoming merger is something everybody in the
organizations concerned obsesses about – much
like the weather. In fact, in psychological terms a
merger has an effect similar to that of a black
cloud in the sky; people take appropriate precau-
tions and sometimes, if this is an option, retreat
from the scene. Likewise, the announcement of a
merger often meets with apprehension and con-
cerns such as ‘Will the transaction create value?’
amongst shareholders or ‘Will I keep my job?’
amongst employees. Both groups of people start
to think twice about their investments in the
enterprise. In the worst case, they retreat (for
instance by withdrawing financial support or in
various ways withdrawing their labour).
This article presents several reasons for these
negative reactions by employees to mergers. One
very obvious reason is the fear of losing one’s job,
with all the damaging implications for personal
wellbeing and security. However, beyond these
personally relevant issues, we argue that, from a
social identity perspective, a merger creates a
threat to the organization’s identity and thus the
employees’ social identification with their orga-
*
We would like to thank Lucy Chamberlain and Ulrich
Wagner for constructive comments on an earlier version
of the present paper. Parts of this paper were presented
at the 12
th
European Congress on Work and Organiza-
tional Psychology. Istanbul,12–15 May 2005. A previous
version was published in the Aston Business School’s
working paper series (RP 0419).
British Journal of Management, Vol. 17, S69–S79 (2006)
DOI: 10.1111/j.1467-8551.2006.00479.x
r2006 British Academy of Management
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