Organizational And Individual Response To Corporate Acquisition Impact.

Despite the frequency with which mergers and acquisitions are occurring in U.S. business, little is known about their impact on organizations and employees. This dissertation studies the case of one corporate merger from the perspective of the acquired firm and its members. Data are available from surveys completed by 391 employees prior to and after the combination, from interviews with key personnel, and from various organizational memoranda. Organizational response to acquisition impact is studied first, beginning with a review of the events leading to the acquisition and a critical examination of the organization's preparation for the acquisition. Initial emotional and strategic responses to the acquisition are then analyzed, and the fit between the combining firms' structures, leadership styles, and values are examined. Finally, the impact of early post-acquisition events on the enduring relationship between the two previously distinct firms is traced. At the individual level, a model is proposed that distinguishes between direct acquisition impact--changes in one's work environment instituted by the acquiring firm--and indirect acquisition impact--changes in the work environment stemming from the acquired organization's response to the acquisition. Changes experienced by employees and negative and positive perceptions and expectations regarding the acquisition are cited. The various data sources show that direct acquisition impact was substantially limited to top management and accounting personnel but also that a considerable number of employees from throughout the organization experienced indirect acquisition impact, such as feeling that management had abandoned a concern for employees in favor of producing business results to please the new owners. Changes in employees' perceptions of their quality of work life are examined as one individual response to acquisition impact. Results show that employees' views of work life areas influenced by the acquisition were significantly lower after the acquisition than before it. Further analysis reveals that the process through which the acquisition was executed (e.g., information provided to employees and availability of social support) was related to employee response, while proximity to direct change was not. This suggests the importance of indirect acquisition impact in shaping individual response to corporate acquisition.PhDOccupational psychologyPsychologyUniversity of Michigan, Horace H. Rackham School of Graduate Studieshttp://deepblue.lib.umich.edu/bitstream/2027.42/127597/2/8204708.pd