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British Journal of Management, Vol. 17, S69–S79 (2006)
DOI: 10.1111/j.1467-8551.2006.00479.x
Working Under a Black Cloud: How to
Sustain Organizational Identiﬁcation after
a Merger*
Rolf van Dick, Johannes Ullrichw and Patrick A. Tissington
Aston Business School, Aston University, Work and Organizational Psychology Group, Aston Triangle,
Birmingham B4 7ET, UK, Birmingham, UK, and wPhilipps-University, Department of Psychology, Gutenberg
Str18, 350 37 Marburg, Germany
Corresponding author email: [email protected]
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 previous studies. Then, we present a study conducted 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 competition. 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 boardrooms and the business press. The news of an
upcoming merger is something everybody in the
organizations concerned obsesses about – much
*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 12th European Congress on Work and Organizational Psychology. Istanbul, 12–15 May 2005. A previous
version was published in the Aston Business School’s
working paper series (RP 0419).
r 2006 British Academy of Management
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 precautions and sometimes, if this is an option, retreat
from the scene. Likewise, the announcement of a
merger often meets with apprehension and concerns 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-
S70
nizations. This in turn has negative consequences
for employees’ collective identity and self-esteem.
The article will unravel these ideas, describe how
they align with the social identity perspective in
general and then present an empirical study
illustrating and supporting our arguments.
Explaining negative reactions to mergers
It seems relatively easy to explain why a merger
so often provokes negative reactions. From the
perspective of psychological learning theories, it
could be argued that a formerly neutral or
positive stimulus (the announcement of a merger)
has, through personal experience or extensive
vicarious conditioning in the media, acquired the
negative valence of events such as the destruction
of shareholder value and lay-oﬀs. If the material
damage implied by the merger were the whole
story, minimizing this would be the only intervention possible by managers wishing to gain
employee support for the change process. Indeed
it should be emphasized that avoiding massive
lay-oﬀs and enabling workers to cope with the
necessary amount of uncertainty and stress are
factors of paramount importance in making a
merger succeed (Cartwright and Panchal, 2001;
Hogan and Overmyer-Day, 1994). In the present
article, however, our goal is to complement this
perspective with an easily overlooked point.
Mergers aﬀect the lives of people not only in
material ways, because people working in organizations (as opposed to shareholders who may
well expect no more from an organization than
ﬁnancial return on investment) have needs above
and beyond their pay cheque and the basic issue
of job security. Drawing on social identity theory,
we will show how fulﬁlment of these social needs
is in part related to processes of organizational
identiﬁcation. Mounting evidence suggests that
employee reactions to a merger vary in a
systematic fashion depending on how much the
merger is perceived to corrupt the pre-merger
organization’s identity, and thereby to pose a
threat to the employees’ organizational identiﬁcation. Before we review such evidence from
previous studies, we set the stage by unravelling
the key concepts of the social identity approach
relevant to the analysis of mergers. Finally, we
will present a study that we conducted in a
merger of two hospitals to further corroborate
our ideas about the important role of post-
R. van Dick, J. Ullrich and P. A. Tissington
merger organizational identiﬁcation above and
beyond the eﬀects of perceived job insecurity.
The social identity approach applied to
organizational life
One of the basic ideas of social identity theory
(SIT) (Tajfel and Turner, 1979, 1986) is that the
social groups we belong to form a signiﬁcant part
of our self-concept. In contrast to our personal
identities, SIT calls that part of our self-concept
in which we see ourselves as being similar to other
members of our social groups – our social
identity. Tajfel (1978, p. 68) originally deﬁned
social identity as ‘that part of an individual’s selfconcept which derives from his [sic] knowledge of
his membership of a social group (or groups)
together with the value and emotional signiﬁcance attached to that membership’. Because of
the embedding of group membership in the
individual’s self-concept, an individual will, to a
greater or lesser extent, think, act and have
feelings consistent with the group’s values and
relative social standing. Thus, to the highly
identiﬁed individual, violating the group’s norms
is like breaking a rule set by him or herself and, in
the same way, the group’s success is experienced
as his or her own achievement. Of course not all
of our social groups are emotionally signiﬁcant to
us all the time. Self-categorization theory (SCT)
(e.g. Turner et al., 1987) articulates the principles
according to which diﬀerent social identities
become salient in a given situation. SCT assumes
that representations of the self emerge in relation
to other social objects that are categorized as
either similar to or diﬀerent from the self.
Furthermore, the theory notes that these selfcategories vary on a continuum of inclusiveness
so that, at one end, self-categorizations as human
beings render ourselves identical in our perception to all humans (in contrast to other animals),
whereas at the other end of the continuum,
nobody is included in the self-category but
ourselves (in contrast to other individuals). The
various social groups that we belong to fall
somewhere in between these extremes. Situational
characteristics determine which of our group
memberships become salient and thus relevant to
our behaviour. So, if another group is in conﬂict
with our own group, it is more likely that this
group membership becomes important in guiding
S71
Identiﬁcation in the Course of a Merger
our behaviour. Formally speaking, social identity
salience is produced interactively by the cognitive
accessibility of the category and how much it ﬁts
the situation (Oakes, 1987). Accessibility describes
the perceiver’s readiness to accept a category,
that is the extent to which it has prior meaning
and signiﬁcance for the individual (Oakes,
Haslam and Turner, 1994). The more saturated
the prior meaning of a category the less input is
necessary to activate this speciﬁc category
(Oakes, 1987). Fit refers to the match between
category speciﬁcations and the stimulus reality
(Oakes, 1987). A soccer player, for instance, may
be able to access the social category of his team
with ease, and during a match, category speciﬁcations such as ‘red and white shirt’ will serve him
well to make sense of the social situation.
Alternatively, the category of his team will not
come to be salient so easily when he is at the
opera where people wear black suits. Thus, the
core element of the SCT is that an individual’s
social identity is not uniformly predictive of his
or her behaviour. Rather, which aspect of one’s
identity is inﬂuential in any given situation is
dependent largely on the context and the group’s
salience in that context.
While a more detailed account of the situational contingencies of identity salience explicated in SCT is beyond the scope of this
introduction, for our purposes it may suﬃce to
say that individuals can have social identities that
are chronically important to them and are used to
lend structure and meaning to a whole range of
situations. In view of the amount of time people
spend at work, it is theoretically plausible that
work organizations provide such identities (e.g.
Ashforth and Mael, 1989), and indeed, numerous
studies have shown the empirical reality of
organizational identity (e.g. Haslam, 2004; Haslam, Postmes and Ellemers, 2003; Van Dick
et al., 2004). Although there is some overlap
between the notions of corporate image and
organizational identity (e.g. Hatch and Schultz,
2002), we believe the concepts to be distinguishable in that the latter refers to what insiders
believe is central and distinctive about the
organization, and these beliefs may or may not
include things known to or accepted by other
stakeholders (e.g. suppliers or customers) who
are involved in the construction of the corporate
image. The key construct for our discussion of
mergers is organizational identiﬁcation, which is
the extent to which these beliefs become selfreferential (Pratt, 1998) for a member of the
organization. The critical point is that for those
employees who strongly identify with their
organization, its identity becomes not only
descriptive but prescriptive as well (Haslam,
Postmes and Ellemers, 2003). Clearly, organizations beneﬁt from high levels of identiﬁcation as
shown by research linking identiﬁcation with,
inter alia, higher work motivation, performance,
organizational citizenship behaviour and lower
attrition (e.g. Haslam, 2004; Van Dick, 2004; for
the problem of over-identiﬁcation see Dukerich,
Kramer and McLean Parks, 1998).
What kind of beneﬁts, then, do strongly
identiﬁed employees receive in return for the
eﬀort expended in identifying with an organization? In this respect, it is important to note that
the positive outcomes mentioned above are
associated with a salient organizational identity
rather than personal identity, which contradicts
traditional assumptions of what motivates people
at work (e.g. McClelland, 1987). Organizational
identiﬁcation seems to do this job independently
of the various beneﬁts tailored to the individual
employee (e.g. pay rises, career advancement).
People who identify with the organization tend to
internalize collective goals as intrinsically motivating (Ellemers, de Gilder and Haslam, 2004).
As Haslam, Powell and Turner’s (2000) synopsis
of social identity theory and need theories
suggests, organizational identiﬁcation breeds motivation based on the fulﬁlment of needs for
relatedness or aﬃliation. Hence, peer recognition
and collective pride (e.g. in achieving group
goals) are the chief rewards involved in social
identity-based motivation because they feed back
into the self-concept (see Ellemers, de Gilder and
Haslam, 2004).
The social identity approach to organizational
mergers
Having established how the basic processes of
social identity constructs translate into organizational outcomes, we can now turn to their role in
organizational mergers. Theoretically, it can be
expected that mergers per se should alter an
employee’s identiﬁcation because a merger essentially redraws or dissolves the category boundaries of two distinct groups within the newly
created merger entity. Thus, mergers inherently
S72
threaten the distinctiveness of the pre-merger
group identity and, consequently, sub-group identiﬁcation should increase at the expense of
identiﬁcation with the post-merger entity (for
the notion of distinctiveness threat, see Branscombe et al., 1999).
Indeed, the negative eﬀects of ‘mere merging’
have been demonstrated in the laboratory by
asking two-person groups to collaborate on a
task (Haunschild, Moreland and Murrell, 1994).
In this study, groups that had a common identity
based on previous interactions showed stronger
resistance to the merging of their group than
groups with no such shared work history. Outside the experimental laboratory, however, merging organizations are likely to be of unequal
vitality in terms of, for example, their physical
and human resources, institutional control, and
prestige (Bourhis and Barrette, 2000). In generalizing the experimental results, we can therefore
expect that the negative eﬀects should be enhanced for members of the organization of lesser
vitality, as it is likely to be less dominant in
shaping the post-merger identity. Conversely, the
dominant merger partner should be able to secure
greater continuity of identity-deﬁning characteristics in the course of merger integration, thus
increasing the chances that its members will
identify with the post-merger entity compared
to members of the dominated partner.
Van Knippenberg and colleagues have investigated the issue of continuity in a series of studies.
They argue that a stronger sense of continuity
among members of the dominant organization
should manifest itself in a stronger relationship of
pre- and post-merger identiﬁcation (see for an
overview: Van Knippenberg and Van Knippenberg, 2004). If employees of a merging organization perceive little change in their daily work it
should be more likely that they preserve their
identiﬁcation with the former organization and
that this identiﬁcation will be transferred to the
post-merger organization as well. If, on the other
hand, discontinuity occurs (such as moving to
another location, changing the entire management, or organizational culture) it is less likely
that employees will transfer their former identiﬁcation to the new organization. Van Knippenberg and associates indeed found support for
these assumptions across diﬀerent types of
organizations (Van Knippenberg et al., 2002).
Van Knippenberg and colleagues have also
R. van Dick, J. Ullrich and P. A. Tissington
demonstrated the importance of continuity in
experimental studies by manipulating it directly.
This was done by telling participants in a
brainstorming study that their team would join
another team in order to brainstorm collectively.
Crucially, a stronger relationship of pre- and
post-merger identiﬁcation was obtained for those
participants who were led to believe that their
group would be continued and merely expanded
by the other group, and that their group
characteristics (e.g. their group logo) would be
maintained. When the perspective was modiﬁed
to suggest low continuation, pre- and postmerger identiﬁcation were less closely aligned
(Van Leeuwen, Van Knippenberg and Ellemers,
2003, Van Leeuwen and Van Knippenberg, 2003).
Lastly, in a ﬁeld study of two merging banks,
Vanbeselaere, Boen and de Witte (2002) also
found direct eﬀects of perceived continuity on
post-merger identiﬁcation. The more that people
were satisﬁed with the way their pre-merger bank
lived on in the merged bank, the stronger was
their identiﬁcation with the merged bank, and the
more positive was their attitude toward people
from the merger partner.
In reality, continuity of merged companies will
be regarded as only moderately desirable, and
employees of the less-dominant organization in
the merger process are likely to be worse oﬀ in
terms of continuity (cf. Ullrich, Wieseke and Van
Dick, 2005). Thus, an important question is what
other antidotes could be employed to alleviate the
negative consequences of a merger? We will now
review two of those.
First, the socio-emotional orientation of the
merged organization has been identiﬁed by the
social identity literature as an important factor
inﬂuencing the perceived threat to pre-merger
identities (Gaertner et al., 2001). Socio-emotional
factors underlying perceived organizational support are especially important during merger
integration. These include fair organizational
procedures and tangible eﬀorts on the part of
supervisors and managers to care for the wellbeing of their subordinates and to value their
contributions (Rhoades and Eisenberger, 2002).
In the context of mergers in the banking industry,
Gaertner et al. (2001) observed that when
employees perceived a merger as threatening,
‘us against them’ dynamics and turnover intentions increased and commitment to the merged
organization decreased. Importantly, however,
S73
Identiﬁcation in the Course of a Merger
bank employees reporting that their merged
organization demonstrated a strong socio-emotional orientation experienced less threat and
were less likely to reduce their commitment.
Second, and related to the notion of organizational support, is the provision of clear and
forthright information about what is going to
change as a result of the merger. As noted above,
rumours quickly take root after the announcement of a merger about lay-oﬀs, compensation,
relocation and other issues. These material issues
probably form the most prominent part of the
merger grapevine. However, communicating envisioned changes related to organizational identity is at least of equal importance. For example,
integration of pre-merger teams, changes in
cross-level coordination or client relationships
hinge upon a collective redeﬁnition of group
boundaries and identity that cannot be achieved
overnight. Rather, frequent and open communication is required. Schweiger and DeNisi (1991)
compared the amount of information desired by
employees going through a merger to the uncertainty of a newcomer to the organization.
Probing further into this analogy, they applied
the idea of realistic job previews (cf. Premack and
Wanous, 1985) to a communication programme
they created and called ‘realistic merger preview’.
In the course of a merger between two Fortune
500 companies, Schweiger and DeNisi conducted
a longitudinal experiment testing the eﬀectiveness
of such a programme. One of the two plants
involved in the merger received a realistic merger
preview (e.g. a regular newsletter, a hotline,
weekly meetings of supervisors and staﬀ) and
the other was left to its own devices. Three
months after the preview programme had begun,
employees of the ‘experimental’ plant scored
signiﬁcantly lower on stress and uncertainty
measures while exhibiting more job satisfaction,
commitment and self-reported performance than
employees of the ‘control’ plant.
In summary, we have discussed three important process factors related to the sustenance of a
positive relationship between merging organizations and its employees: maintaining continuity,
showing a socio-emotional orientation and timely
and honest communication. Of course, when a
merger leads to lay-oﬀs, the importance of these
factors will increase. The way departing employees are treated by the merged organization will
also have signiﬁcant eﬀects on the remaining
workforce (e.g. Brockner, 1988) and special
attention should be paid to their needs for
continuity, organizational support and information. However, we have argued previously that
mergers can have a large impact on the wellbeing
and performance of employees extending beyond
the fear of being made redundant. In the ﬁnal
part of this article, we will present a ﬁeld study
that demonstrates these dynamics in the absence
of organizational downsizing.
In order to adequately assess the diﬀerential
impact of a merger on social and personal needs,
respectively, we ﬁnd it useful to concentrate on
two key variables: organizational identiﬁcation
and job insecurity. As detailed by Haslam, Powell
and Turner (2000) and discussed above, organizational identiﬁcation ties in with social needs
(e.g. aﬃliation and recognition). In contrast, job
insecurity can be viewed as arising from a threat
to personal needs for safety.
Taken together, we assume that both postmerger identiﬁcation and perceptions of job
insecurity aﬀect employees’ work-related attitudes and behaviour such as job satisfaction,
turnover intentions, or extra-role behaviours.
Post-merger identiﬁcation and job insecurity will
be inﬂuenced by the three factors described
above, that is continuity, socio-emotional orientation and communication before and during the
merger. Furthermore, levels of pre-merger identiﬁcation have to be taken into account. Figure 1
illustrates these assumptions in form of a
heuristic model and also exempliﬁes the underlying mechanisms in terms of employees’ needs.
We believe that perceptions of job insecurity have
a negative impact on employees’ attitudes and
behaviours because they challenge and threaten
basic human needs for security, pay and so on.
Post-merger identiﬁcation, on the other hand,
will be positively associated with outcome variables because it satisﬁes higher order social needs
of aﬃliation and respect (see Haslam, Powell and
Turner, 2000).
Method
In spring 2001 a local council responsible for
healthcare developed a strategy of merging two
hospitals that were situated about 30 kilometres
apart on the outskirts of two middle-sized cities
in Germany. The hospitals were of nearly equal
S74
R. van Dick, J. Ullrich and P. A. Tissington
Pre-merger
identification
Social Needs
Post-merger
identification
-Affiliation
- Belongingness
- Respect
Communication
Outcomes
Socio-emotional
orientation
- Well-Being
- Satisfaction
- Turnover
- Performance
- ...
Job
insecurity
Continuity
Personal Needs
- Security
- Pay
Figure 1. Heuristic model explaining outcomes following an organizational merger
Note: The concepts in boxes illustrate the hypothesized input-mediation-output chain, and the constructs in circles refer to
underlying needs.
size, with about 600 employees each, and both
mainly treating mental illnesses of adult patients.
Merger plans were ﬁrst launched in summer
2001 and the merger was formally completed by
agreements between representatives of council,
senior management and unions. The merger
agreement made it explicit that no jobs would
be cut as a result of the merger and emphasized
that the merger would facilitate the retention of
jobs in the face of increasing competition in the
health services market. The plan was to keep
both hospitals as separate entities with respect to
medical services but to merge facilities such as
kitchen, laundry, and most parts of the administration. The ﬁrst author was asked to conduct
an employee survey about nine months after the
merger agreement, and in September 2002, questionnaires were distributed to all 1244 employees
of both hospitals. At the time of the study, few
employees had switched positions from one to the
other hospital and, with the exception of integrating most laundry facilities, the other planned
changes like merging the administration or kitchen
facilities had not been carried out.
The overall response rate was 37%, resulting in
a sample of n 5 459 employees, which will be
used for the analyses. The questionnaire contained several concepts that are not relevant for
the present context. We will now describe only
those scales that match the present theoretical
framework (for further details of this study see
Van Dick, Wagner and Lemmer, 2004).
Organizational identiﬁcation was measured
with respect to the sub-unit that existed prior to
the merger and is continuing to exist after the
merger (four items, e.g. ‘I identify with . . .’, ‘I am
glad to work for . . .’, alpha 5 0.88). We will refer
to this aspect as pre-merger identiﬁcation in the
remainder of this article. Four items that were
identical to the above except the target name (the
organization’s name after the merger) were used
to assess post-merger identiﬁcation (alpha 5 0.91).
Job insecurity was measured with four items (e.g.
‘I am afraid of losing my job’, ‘I am satisﬁed with
the amount of job security I have’ (reverse
scored), alpha 5 0.58). A measure of continuity
was derived from three items (e.g. ‘With regard to
my team nothing will change as a result of the
merger’, ‘The merger will have no impact on my
routine work’, alpha 5 0.73). Socio-emotional
orientation was obtained with three items (e.g.
‘The organization values the employees’ contributions’, ‘The organization cares for the employees’ well-being’, alpha 5 0.89). Communication
was assessed with six items (e.g. ‘Management
has provided information about all processes and
eﬀects of the merger’, ‘Most decisions have been
made without consulting employees’ (reverse
scored), alpha 5 0.74). Five variables measured
desirable outcomes both from the vantage point
of the organization and the individual employee:
Job satisfaction was measured with three items
adapted from the Job Diagnostic Survey (Hackman and Oldham, 1980; alpha 5 0.78). Organiza-
Identiﬁcation in the Course of a Merger
tional citizenship behaviour (OCB) was assessed
with ﬁve items tapping into extra-role behaviours
as deﬁned by Organ (1997; alpha 5 0.72). Turnover intentions were measured with two items (‘I
frequently think of quitting this job’, and ‘I have
already looked for other jobs’, correlation
between the two items was r 5 0.61, po0.001).
An index of negative emotions was derived from
averaging responses to items asking for the
amount of fear and anger experienced with
regard to the merger (both items were correlated
at r 5 0.48, po0.001). For all items, participants
had to indicate agreement or disagreement on sixpoint rating scales (endpoints: ‘do not at all
agree’, and ‘do fully agree’, respectively). Lastly,
physical complaints were measured with six items
asking for the frequency of a range of physical
symptoms (six response alternatives from ‘never’
to ‘very often’, alpha 5 0.76).
Results
First of all, we examined relationships between
organizational identiﬁcation after the merger and
potential outcomes. As can be seen in Figure 2,
post-merger identiﬁcation was systematically related
to a number of variables essential both for the
wellbeing and the productivity of the employees.
Highly identiﬁed employees reported more
citizenship behaviour and job satisfaction, and
turnover intentions
job satisfaction
negative emotions
OCB
Standardised mean scores
0.28
0.18
0.08
−0.02
−0.12
−0.22
−0.32
low
intermediate
high
Post-merger identification
Figure 2. Relationships between post-merger identiﬁcation and
outcome variables
S75
also lower turnover intentions and less negative
emotions. The opposite is true of employees
identifying only weakly with the merged organization. Correlations of these variables with
post-merger identiﬁcation were signiﬁcant in all
cases except for negative emotions and remained
stable when we controlled for pre-merger identiﬁcation and process variables. Consistent with
the notion of distinctiveness threat (Branscombe
et al., 1999), we also found a positive relationship
between pre-merger identiﬁcation and negative
emotions. That is to say, those who accorded
more importance to their former hospitals identity reported more anger and fear as a result of the
merger.
Second, we looked brieﬂy at the prevalence and
correlates of job insecurity in isolation before
turning to a structural equation model encompassing both of our key variables. Given that no
lay-oﬀs had taken place at the time of our study
and that it was emphasized that the merger would
ensure a prospect of job security, the mean level
of job insecurity was relatively high (4.08; with a
theoretical maximum of 6). Signiﬁcant correlates
of job insecurity were negative emotions, physical
symptoms such as neck and shoulder pains, and
organizational citizenship behaviour.
In order to determine whether our assumption
of the diﬀerential functioning of post-merger
identiﬁcation and job insecurity would hold when
all relationships are analysed in an overall model,
we devised the model depicted in Figure 1 and
put it to a test in a structural equation analysis.
Sex, age and pre-merger aﬃliation were entered
as control variables; pre-merger identiﬁcation,
continuity, socio-emotional orientation and communication were included as predictors as speciﬁed
in Figure 1, followed by post-merger identiﬁcation
and job insecurity as mediators. Lastly, wellbeing,
OCB, job satisfaction, and turnover intentions were
included as criteria. To achieve a good ﬁt to the
data, the model has been modiﬁed in some respects
allowing inter-correlations between the predictor variables on the one hand and the outcome
variables on the other as well as some direct
eﬀects from the predictor variables on the
outcomes in addition to the proposed mediated
eﬀects. The overall ﬁt of the model was good
(X2 5 57.9, po0.05, df 5 31, CFI 5 0.96, AGFI 5
0.94, SRMR 5 0.04, RMSEA 5 0.06). We will
not describe each and every relationship but give
a brief overview of the main ﬁndings related to
S76
R. van Dick, J. Ullrich and P. A. Tissington
Pre-merger
Identification
.25
Post-merger
Identification
Communication
.1 5
Job
satisfaction
.12
−.15
.23
Turnover
intentions
−.35
Socio-emotional
orientation
.16
OCB
.23
Continuity
−.34
Job
Insecurity
.22
Health
Complaints
Figure 3. Empirical Model Derived from Structural Equation Modelling (all Paths Signiﬁcant)
the proposed model. The empirical model is
presented in Figure 3.
First of all, in most cases the predictor
variables were related to the mediating variables
as expected. Speciﬁcally, pre-merger identiﬁcation related to post-merger identiﬁcation
(b 5 0.25), communication was related to postmerger identiﬁcation (b 5 0.12), and continuity
was related to job insecurity (b 5 0.34). Socioemotional orientation was not signiﬁcantly related to the mediating concepts, although both
eﬀects pointed in the assumed direction (0.07 for
post-merger identiﬁcation, and
0.07 for job
insecurity, respectively. However, and in line with
the review by Rhoades and Eisenberger (2002),
socio-emotional orientation had important
direct relationships with turnover intentions
(b 5 0.35) and OCB (b 5 0.16). This ﬁnding
indicates that employees who feel emotionally
valued and supported are more likely to stay
within the organization and are ready to go the
extra mile independently of identity and securityrelated attitudes. Post-merger identiﬁcation was
related to job satisfaction (b 5 0.15), turnover
intentions (b 5 0.15), and OCB (b 5 0.23),
whereas job insecurity correlated with healthcomplaints (b 5 0.22), and OCB (b 5 0.13). The
relationship between wellbeing and job insecurity
was as expected since job insecurity, as a classic
work stressor, should relate positively to reports
of physical symptoms (cf. the meta-analysis by
Sverke, Hellgren and Na¨swall, 2002). However,
the positive relation between job insecurity and
OCB was unexpected. This may be explained by
employees’ putting in extra eﬀort as a means to
keep their job in a time of uncertainty. In
summary, we found support for the proposed
relationships and have been able to explain
substantial amounts of variance in all criterion
variables (between R2 5 0.07 for wellbeing, and
R2 5 0.20 for job satisfaction, respectively).
Conclusions
We have argued against the merger folklore that
maintains that a merger negatively aﬀects wellbeing and work attitudes of the employees
involved primarily by inducing feelings of job
insecurity. Emphasizing that the workplace is not
only a resource for fulﬁlling people’s ﬁnancial
needs, we adopted a dual perspective that shed
light on how mergers can undermine social needs
as well. This dual perspective allowed us to
illustrate in a ﬁeld study the independent roles of
organizational identiﬁcation and job insecurity in
Identiﬁcation in the Course of a Merger
mediating the relationships between theoreticallyderived process variables and organizational
outcomes. Whereas the irreducibility of social to
personal needs has been implied by the entire
social identity literature on mergers (e.g., Terry,
2001, 2003; Van Leeuwen and Van Knippenberg,
2003; Van Knippenberg and Van Leeuwen,
2001), we believe that the contribution of the
present article lies in its explicit juxtaposition of
these needs and its consequences for merger
integration. To our knowledge, the joint operation of material threat (e.g. job insecurity) and
identity threat (e.g. discontinuity) has been
demonstrated here for the ﬁrst time empirically.
It should be acknowledged that the data set we
used here cannot conﬁrm our underlying model
in terms of causality. Data have only been
obtained in a cross-sectional design and it is
theoretically sound to conceive of the causal
relationship between identiﬁcation and the outcome variables as bi-directional. This means that
employees with a stronger post-merger identiﬁcation are more likely to be satisﬁed and high
performing, but, on the other hand, good
performance leads to more respect by colleagues
and supervisors, which in turn can increase
feelings of belongingness, and thus identiﬁcation.
With regard to the eﬀects of pre-merger identiﬁcation, continuity, socio-emotional orientation
and clear communication, the causal direction is
more plausibly rendered as in our model than the
other way round. Longitudinal studies are of
course needed to prove this assumed structure.
A further alternative explanation worth considering is that an unknown third variable may be
responsible for the observed relationships. As for
the most likely candidate of a third variable
explaining the relationships that we found,
personality (George, 1992), results by Schaubroeck, Ganster and Kemmerer (1996) suggest
that trait aﬀect explains correlations of job
attitudes only to a moderate extent. Because we
did not measure personality traits, we cannot rule
out this possibility. On a theoretical basis,
however, the mutability of organizational identiﬁcation with regard to situational changes (see
Ellemers, de Gilder and Haslam, 2004) would
lead us to rather downplay this concern.
Having acknowledged these limitations, we
move on to summarize our ﬁndings and outline
some guidelines for practitioners on how to make
use of this knowledge. First of all, our data
S77
clearly support the assumption that post-merger
identiﬁcation relates positively to employee attitudes and behaviours. Strongly identiﬁed employees are more satisﬁed, less likely to withdraw
and more willing to put in extra eﬀort. Therefore,
ensuring a sense of belonging among the workforce and providing a positive basis for employees’ social identity is key to the success of a
merger. Our theoretical analysis – which was
largely conﬁrmed by the data – suggests a
number of important ways in which to sustain
organizational identiﬁcation and to lower feelings
of job insecurity even in the shadow of a ‘black
cloud’. First of all, managers should aim for
continuity in work routines, teams and communication channels. This, according to our data,
would help to reduce feelings of job insecurity.
Clear communication, as a second important
factor, may be used to build up post-merger
identiﬁcation. Such communication should address all issues of potential job losses but also
consistently stress the positive elements of the
merged organization to foster identiﬁcation with
this new object. Thus, communication and
continuity are both appropriate means for
managers to make a merger more successful
(see Van Knippenberg and Van Leeuwen, 2001).
These are, however, not values in themselves, but
work because they respectively increase identiﬁcation and reduce job insecurity. One has to
consider, though, that communication has to be
genuine. If management uses communication
simply to manipulate the workforce by trying to
distract and disguise the real issues, this can easily
backﬁre and cause even more negative reactions
towards the merger (for an example of a
dissociation between rhetoric and action during
a merger, see Vaara, 2003).
A diﬀerent pattern has emerged for socioemotional orientation where we could not ﬁnd
support for the proposed mediation via identiﬁcation and job insecurity. However, we did ﬁnd
direct eﬀects on two of our outcome variables
indicating that the more employees felt cared for,
the more likely they were to show extra-role
behaviour and the less likely they were to have
turnover intentions. This divergence from our
proposed model might simply be because communication and continuity have been assessed
with questions directly related to the merger
whereas socio-emotional orientation was measured in a rather general way not related to the
S78
speciﬁc situation of the merger. But it also reﬂects
ﬁndings from the organizational support literature of direct positive relationships between
support and variables such as job satisfaction
(e.g. Eisenberger et al., 1997). Thus, losses of
continuity may be buﬀered as long as managers
and supervisors show a socio-emotional orientation such as providing emotional support and
demonstrating care for employees’ needs and
wellbeing in times of change.
Many authors have convincingly argued that it
is the people in organizations who are critical to
the success or failure of mergers (e.g. Cartwright
and Cooper, 1992; Marcks and Mirvis, 2001).
However, it has been suggested that the human
factor is typically paid less attention than economic and technical aspects when merger and acquisitions are planned and executed (Terry, 2001,
2003). We hope that out analyses have oﬀered
managers the means to make the black cloud pass
by – and possibly even add some sunlight.
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Rolf van Dick earned his PhD from Philipps University, Marburg, Germany in social psychology. He is
currently a Professor of Social Psychology and Organisational Behaviour at Aston Business School. His
primary research interests are in the ﬁeld of individual’s attachment to organizational groups. He has
published ﬁve books and more than 60 chapters and journal articles and is currently editing a special
issue of Journal of Organizational Behavior on identiﬁcation and commitment in organizations.
Johannes Ullrich graduated in Psychology at Philipps University, Marburg, Germany and is
currently doing his PhD in the research training group ‘Group-focused enmity’ at Philipps
University. His research interests include attitude strength, intergroup relations, and social identity
processes in organizations.
Patrick A. Tissington is a lecturer in Work and Organisational Psychology and serves as the Director of
the Doctor of Business Administration program at Aston Business School. He obtained his PhD from
the Industrial Psychology Research Group at the University of Aberdeen. His research, teaching, and
consultancy centre on decision making in executive leadership, emergency services and military contexts.