EUROPEAN JOURNAL OF WORK PSYCHOLOGY, 2004, 13 (2), 113–119
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Current themes in organizational change Doris Fay
Aston Business School, Aston University, Birmingham, UK Harald Lührmann Accenture, Germany
The game goes on. The pressure on organizations for continuous change, in order to adapt to shifts in market structure, to deregulation or legal initiatives, and to quickly grasp evolving opportunities has not reduced—on the contrary; it has increased with progressing globalization and competition. Specifically, current challenges range from managing mergers and acquisitions, downsizing, and “rightsizing”, to business reengineering, or developing and implementing new technologies. As sales markets are getting tougher, companies keep decreasing the product life cycles, which necessitates faster innovation. “Change” has become a buzzword in the daily press; it seems to be omnipresent in the minds of consultants and other practitioners. Unfortunately, the results from costly change efforts fall too often behind expectations. For social scientists, therefore, it remains a pertinent task to invest in research that helps to gain a better understanding of change processes and of factors that contribute to successful change and innovation. This special issue faces up to this challenge by providing empirical and theoretical contributions that address two subject areas of the multifaceted change arena: first, corporate restructurings such as merger and acquisition, downsizing, or redundancies; and second, changing and innovating the way business is done. Mergers and acquisitions (M&A) seem to appear in waves, with the earliest ones being witnessed in the late 1890 in the USA and the most recent one in the 1990 (Gaughan, 2002; Lubatkin & Lane, 1996). By now, M&A are common to nearly all industries, such as finance (e.g., Allianz and Dresdner in 2001), media (AOL and Time Warner in 2000), or production (HP and Compaq in 2001). The optimistic voices that celebrate the
Correspondence should be addressed to Doris Fay, Aston Business School, Aston University, Aston Triangle, Birmingham B4 7ET, UK. Email:
[email protected] would like particularly to acknowledge the help and support of our reviewers in the process of compiling this special issue.
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© 2004 Psychology Press Ltd http://www.tandf.co.uk/journals/pp/ 1359432X.html
DOI: 10.1080/13594320444000029
announcements of each new merger, however, tend to turn into frustrated voices when speaking about their merger’s success. Estimations of mergers that failed their financial objectives in terms of share value, return on investment, postcombination profitability range from 50% (Cartwright & Cooper, 1996) up to 75% (Marks & Mirvis, 2001). Failure analyses undertaken from the perspective of strategic management examined the success of the planned business diversification and potential synergies, other disciplines such as organizational research focused on whether different corporate cultures could be aligned (Lubatkin & Lane, 1996; Marks & Mirvis, 2001). Recently, however, there has been an increasing interest in understanding how to manage “the soft side” of a merger process; which brought factors such as communication (Schweiger & DeNisi, 1991), and trust during the merging process in to the limelight (Kremershof, 2003; Stahl & Sitkin, 2001; cf. Larsson & Finkelstein, 1999). An understanding evolved that such variables would strongly influence staff commitment, motivation, and retention. The work of Rolf van Dick, Ulrich Wagner, and Gunnar Lemmer, in the first article of this special issue, widens this approach. Drawing on social identity theory the authors highlight the role of organizational identity and its effect on staff attitudes. In many mergers or acquisitions, one of the parties involved needs to give up the “object” that employees identify with; for example, AOL Time Warner will remove “AOL” from its name (AOL, 2003). This article highlights the relevance of both, the premerger and postmerger identity to understand a range of attitudinal outcomes that may affect the bottom lines. Concurrent with the merger wave, driven by the urge to cut costs or to increase productivity, other businesses engaged in reducing their workforce. Similar to mergers, the results of the downsizing and redundancy exercises were often disappointing. Unforeseen repercussions, such as low moral of the remaining staff, the realization that one might have lost the best people (Mirvis, 1997), and the feeling that organizational performance was still poor despite the painful cuts, prompted a landmark study on the development of profitability of downsized companies. Results clearly showed that companies that purely downsized did not improve their performance in terms of return on assets (Cascio, Young, & Morris, 1997) (ironically, though, stock price performance increased). This revealing result was attributed to the remaining workforce’s attitudes and behaviours counteracting the presumed benefits of downsizing; it was the survivor syndrome’s hour of birth (Brockner, 1988). It became a widely accepted assumption that survivors who have witnessed poor treatment of the leavers will develop negative emotions and attitudes towards their organization and perform poorly.
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While the study by Cascio et al. (1997) raised serious doubts about the financial merits of downsizing, the associated unpleasant attitudinal and emotional outcomes have put an additional question to its usefulness. However, Les Worrall, Carole Parkes, and Cary Cooper, in the next article, suggest that the negative effects of downsizing have not been fully proven. Negative effects are typically explained in terms of the survivor syndrome and are also attributed the widely practised “Mafia model” of downsizing (Stebbins, 1989). The latter describes the desire to have done with the redundancy quickly and then forget about it, which generally leads to ignoring even the most basic human resources practices. The authors argue that the frequently reported unwanted outcomes could in fact be engendered by the experience of the organization undergoing change. Layoffs—even in small numbers—require changes to how the work is done, for example, in terms of division of labour; and most forms of change are in general associated with a whole raft of unpleasant experiences. To test whether negative outcomes have been rightly attributed to downsizing (instead of the disturbing process of change), they compare assessments on effectiveness, morale, employee motivation, and other variables from managers whose organizations underwent redundancy programmes with assessments of managers from organizations that underwent other types of changes. The results confirm that redundancy programmes are associated with worse assessments than other types of change—which was especially the case when redundancies were combined with delayering. The 1990s saw an enormous growth in publications that sought to unravel the factors leading to the survivor syndrome and ensuing symptoms such as voluntary turnover. The evolving knowledge highlighted that survivors’ perceptions of how fair the processes around the layoffs were is relevant (Brockner, Wiesenfeld, & Martin, 1995; Brockner, Wiesenfeld, Reed, Grover, & Martin, 1993). The implication of this was to focus on good treatment of leavers to avoid the survivor syndrome. Many practitioners incorporate this knowledge into their downsizing strategies. The qualitative study by Kusum Sahdev compares an organization in which the downsizing delivered the desired results with an organization that was not successful. Her analysis shows how the strong emphasis on pleasing the leavers also has negative outcomes. One organization followed the state-of-the-art knowledge and focused strongly on accommodating the leavers by pursuing a transparent redundancy process, applying fair decision rules, and providing substantial support for the leavers in terms of outplacement and redundancy packages. Contrary to expectations, this company was not successful; instead, the measures taken, combined with neglect of job design issues, made leaving the organization more attractive than staying. Is this the hour of birth of the reluctant survivor? On the other hand, the organization that ignored many of these factors, and that even made no secret of potential further downsizing, fared well. Key to their success was investing in survivors, making staying attractive by enhancing their skills, redesigning their work and putting into place mechanism of empowering.
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The second group of articles in this special issue focuses on business innovation such as the adoption and implementation of new technologies and working practices. Again, the few studies that sought to test their effectiveness, such as the seminal study by Porras and Robertson (1992) on organizational development interventions, have shown that there are positive effects; but one cannot ignore the fact that a considerable number of interventions do not meet their targets. Unfortunately, a more recent analysis did not come to a more positive conclusion: Wolfsmith and colleagues estimated the success rate of large-scale change interventions to average around 50% (as cited in Farias & Johnson, 2000). These ambiguous results have fuelled an interest in identifying factors that are crucial to success; one of them is, according to Porras and Robertson, “the degree and quality of organizational member involvement in the change process” (p. 754). Accordingly, literature on organizational change typically elaborates on strategies that are designed to enable change recipients’ participation in the change process (e.g., Cummings & Worley, 1997). In practice, however, job incumbents may be reluctant to acknowledge the “blessings” offered by these participation opportunities. Conny Antoni’s empirical article seeks to identify employee attitudes and perceptions that encourage them to get involved in the change process. Using a generalized expectancy-valence model the author identifies the role that colleagues and supervisors have in influencing whether employees make use of the opportunity to be involved. This research is not only important because participation contributes to the success of the change initiatives; additionally, participation seems to be a factor that prevents the development of cynicism against organizational change (Reichers, Wanous, & Austin, 1997). In view of the prognosis that change will be the only constant feature of our future, it seems a timely task to understand what protects us from becoming too negative about it. Whereas Conny Antoni’s article subscribes to the view that “user participation” is beneficial to successful organizational change, the theoretical article authored by Chris Clegg and Susan Walsh develop a set of propositions about change management that challenge this perspective (in addition to some other commonly held positions). Most importantly, the authors take the stance that when implementing change, technology is typically taken as a given; therefore, change management efforts focus too much on issues of implementation and user participation. Drawing strongly on the principles of sociotechnical systems approach, they turn the logic of “user participation in system design” upside down and demand “ownership” of the future users over the process. Effective change management then does not ask how one can achieve user participation in the design and implementation of a new system; instead, the question is how the future users—who are in this framework the owners of the new system—can make designers and other experts to develop what they need. The penultimate article by Doris Fay, Harald Lührmann, and Carsten Kohl also emphasizes the notion of active change participants by exploring the role of proactive climate. Previous theorizing on climate and culture in organizational
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change has discussed these variables from two perspectives: First, scholars of organizational development have pointed out that the success of change efforts depends on whether culture can be successfully changed (cf. Burke, 1994; Cummings & Worley, 1997). No matter whether an organization targets at changing its structure, processes, technology, or mission, culture and climate change is seen as a cardinal factor for successful, enduring organizational change. Second, organizations may differ from each other in their ability to successfully implement a change. This implies that climate could be a precondition for the success of a change effort. Building on previous work on climate in organizational change (Baer & Frese, 2003; Klein, Conn, & Sorra, 2001) the authors look at the role of proactive climate in organizations that are in the consolidation phase after a large-scale reorganization. Results show that climate is linked both directly to performance of an organizational unit and moderates the effect of line managers’ attitudes and behaviours. The final article looks at one specific avenue through which organizations change: innovation. Organizations change by innovating their processes, products, people management strategies, services, or other variables. Arguing, that work teams play a crucial role in initiating and pulling through innovations, Michael West, Giles Hirst, Andreas Richter, and Helen Shipton undertake the task of drawing up prescriptions for developing innovative work teams. Based on a comprehensive review on team innovation that employs an input—process— output framework, they develop practically oriented recommendations. The article does not shy away from pointing to some important dilemmas that one is confronted with when trying to put science into practice. For example, the finding that external demands support innovation is considered alongside its potentially impairing effect on creativity; the beneficial effects of diversity for generating ideas and decision-making quality is linked to diversity’s potentially disintegrating force; the necessity that innovation and even only attempted innovations require recognition and reward becomes a dilemma when recognizing that rewards can threat intrinsic motivation—while intrinsic motivation is one of the best established predictors in creativity research. The article helps us to understand how distal variables such as diversity translate into more proximal variables such as conflicts and dissent. Even though the demand for a better understanding of what facilitates innovation in organizations is stronger than ever, innovation research has become fairly routinized and a lack of integration across different levels has been noted (cf. Anderson, de Dreu, & Nijstad, 2004). This article might help to find ways out. REFERENCES Anderson, N., de Dreu, C.K.W., & Nijstad, B.A. (2004). The routinization of innovation research: A constructively critical review of the state-of-the-science. Journal of Organizational Behaviour, 25, 147–173.
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AOL. (2003, September 19). AOL dropped from Time Warner name. Retrieved from http://www.pbs.org/newshour/bb/business/aol_time_index.html Baer, M., & Frese, M. (2003). Innovation is not enough: Climates for initiative and psychological safety, process innovations and firm performance. Journal of Organizational Behavior, 24, 45–68. Brockner, J. (1988). The effects of work layoffs on survivors: Research, theory, and practice. In B.M.Staw & L.L.Cummings (Eds.), Research in organizational behavior (Vol. 10, pp. 213– 255). Greenwich, CT: JAI Press. Brockner, J., Wiesenfeld, B.M., & Martin, C. (1995). Decision frame, procedural justice, and survivors’ reactions to job layoffs. Organizational Behavior and Human Decision Processes, 63, 59–68. Brockner, J., Wiesenfeld, B.M., Reed, T., Grover, S., & Martin, C. (1993). The interactive effects of job content and context on the reaction of layoff survivors. Journal of Personality and Social Psychology, 64(2), 187–197. Burke, W.W. (1994). Organization development: A process of learning and changing. Reading, MA: Addison-Wesley. Cartwright, S., & Cooper, C.L. (1996). Managing mergers, acquisitions, and strategic alliances: Integrating people and cultures (2nd ed.). Oxford, UK: ButterworthHeinemann. Cascio, W.F., Young, C.E., & Morris, J.R. (1997). Financial consequences of employment-change decisions in major U.S. corporations. Academy of Management Journal, 40, 1175– 1189. Cummings, T.G., & Worley, C.G. (1997). Organization development and change (6th ed.). Cincinnati, OH: South-Western College Publishing. Farias, G., & Johnson, H. (2000). Organizational development and change management: Setting the record straight. Journal of Applied Behavioral Science, 36, 376–379. Gaughan, P. (2002). Mergers, acquisitions, and corporate restructurings (3rd ed.). New York: HarperCollins. Klein, K.J., Conn, A.B., & Sorra, J.S. (2001). Implementing computerized technology: An organizational analysis. Journal of Applied Psychology, 86(5), 811–824. Kremershof, I. (2003). The role of trust in the post-merger/-acquisition integration process: A case survey. Unpublished diploma thesis, Giessen University, Germany. Larsson, R., & Finkelstein, S. (1999). Integrating strategic, organizational, and human resource perspectives on mergers and acquisitions: A case survey of synergy realization. Organization Science, 10, 1–26. Lubatkin, M.H., & Lane, P.J. (1996). Psst… The merger mavens still have it wrong. Academy of Management Executive, 10(1), 21–37. Marks, M.L., & Mirvis, P.H. (2001). Making mergers and acquisitions work: Strategic and psychological preparation. Academy of Management Executive, 15, 80–92. Mirvis, P.H. (1997). Human resource management: Leaders, laggards, and followers. Academy of Management Executive, 11(2), 43–56. Porras, J.I., & Robertson, P.J. (1992). Organizational development: Theory, practice, and research. In M.D.Dunnette & L.M.Hough (Eds.), Handbook of industrial and organizational psychology (2nd ed., Vol. 3, pp. 719–822). Palo Alto, CA: Consulting Psychologists Press. Reichers, A.E., Wanous, J.P., & Austin, J.T. (1997). Understanding and managing cynicism about organizational change. Academy of Management Executive, 11(1), 48–59.
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Schweiger, D.M., & DeNisi, A.S. (1991). Communication with employees following a merger: A longitudinal field experiment. Academy of Management Journal, 34, 110–135. Stahl, G.K., & Sitkin, S.B. (2001, August). Trust in corporate acquisitions. Paper presented at the Academy of Management conference, Washington DC. Stebbins, M.W. (1989). Downsizing with “mafia model” consultants. Business Forum, 14, 45–47.
EUROPEAN JOURNAL OF WORK PSYCHOLOGY, 2004, 13 (2), 121–138
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Research note: The winds of change— Multiple identifications in the case of organizational mergers Rolf van Dick, Ulrich Wagner, and Gunnar Lemmer Philipps-University of Marburg, Germany
Within the organizational domain, different foci of social identification can be differentiated. In the context of an organizational merger, identification with the former premerger organization, which often continues as a subunit of the larger whole after the merger, and identification with the larger organization post merger are important aspects of an employee’s belief system and thus are relevant for work-related attitudes and behaviours. We conducted a cross-sectional questionnaire study among 450 employees of two recently merged hospitals. We hypothesized that both identification with the premerger subunit that still exists as a separate entity after the fusion and identification with the postmerger larger organization will be positively associated with job satisfaction and self-reported citizenship behaviour and negatively correlated with turnover intentions and negative emotions. Furthermore, particularly those employees who are highly identified with both entities should hold more positive attitudes compared to those only weakly identified with both entities. Our hypotheses were largely confirmed. Practical implications for the management of organizational mergers are discussed. Mergers and acquisitions represent a major aspect of organizational change in today’s industries. The aim of this article is to give an overview of research on organizational mergers from a social identity perspective, and to provide empirical evidence for the relationships between social identification © 2004 Psychology Press Ltd http://www.tandf.co.uk/journals/pp/ 1359432X.html
DOI: 10.1080/13594320444000038
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and work-related attitudes and self-reported behaviours. We present evidence showing that it is fruitful to take different foci of identification into account in the domain of mergers and acquisitions. When taking the perspective of an employee, organizational mergers can be considered as a tremendous process of organizational change. According to Albert and Whetten (1985) organizational identity is defined by its essential features which are characterized by (1) what organizational members think is central to the organization; (2) what distinguishes this particular organization from other organizations from the viewpoint of its members; and (3) what the members perceive as enduring, i.e., connecting the organization’s past with its presence (cf. Gioia, 1998). By the act of acquiring another organization and incorporating this new organization into a larger whole and even more by being acquired, all these aspects of an organization’s identity are challenged. This can be demonstrated on the example of the fusion between Daimler Benz AG and Chrysler Corporation. The merger was publicly announced as a merger of equal partners with the signature of a merger agreement in London in May 1998. In 1999 and 2000 the merger looked like becoming an economic success with more than $11 billion operating profit. Since then, however, the profit has decreased dramatically, and economically the fusion is now widely considered a failure. The reason for the failure can be seen in a cultural mismatch between the working and leadership styles of both companies. Leshinsky (2000) argues that the fusion was not at all a merger of equals but a planned takeover of Chrysler by Daimler. Evidence for this comes from the fact that within 2 years after the merger most members of the senior management of Chrysler were replaced by German managers and that many of the German authoritative top-down processes in determining strategic and operative decisions were implemented at Chrysler, replacing the more “free-wheeling” sprit of the former company. For the employees of both premerger companies but particularly for those of Chrysler, centrality, enduring features, and distinctiveness of “their” organization have become more and more problematic and waning. For instance, Chrysler and Daimler had very different product lines before the merger happened, i.e., passenger cars and jeeps by Chrysler and luxury cars and heavy-duty trucks by
Correspondence should be addressed to Rolf van Dick, Work & Organizational Psychology, Aston Business School, Aston University, Aston Triangle, Birmingham B4 7ET, UK. Email:
[email protected] authors thank Miriam Koschate and Patrick Tissington for their helpful comments on previous versions of this article. Jeremy Dawson’s help with regression analysis is greatly appreciated. We are especially grateful to Doris Fay and two anonymous reviewers for their very constructive criticism. Portions of this paper have been presented at the 11th European Congress of Work and Organizational Psychology, May 14–17, 2003, Lisbon, Portugal.
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Daimler. After the merger this clear distinction disappeared because officially both product lines were produced under one roof. Some theorists argue that the nature of an organization’s identity is crucial for the individual’s identification with the organization (e.g., Dutton, Dukerich, & Harquail, 1994). According to Ashforth and Mael (1989), identification with one’s organization partially answers the question of “Who am I?” and being identified means a sense of oneness between employee and organization. Thus, the changes in the identity of the premerger companies Chrysler and Daimler are also challenging and threatening for the individual employee’s identity. Many authors consider loss in psychological attachment as one of the most problematic outcomes of organizational mergers (e.g., Cartwright & Cooper, 1992). From a social identity perspective, the fusion of two organizations can be seen as a merger between an ingroup and a former outgroup into a larger unit (see, for an overview, Van Dick, 2004). The more the members of the postmerger organization feel like being members of a new common ingroup, the more they can identify with the new organization (e.g., Gaertner, Bachman, Dovidio, & Banker, 2001). Social identity research on mergers and acquisitions has demonstrated that identification with the postmerger organization is related to higher job satisfaction, more extra-role behaviour, and lower turnover and absenteeism (e.g., Bachman, 1993; Terry, 2001, 2003). Rousseau (1998) asks the question of what motivates employees to identify with their organizations in times of change? She argues that contemporary workers are well aware of the fact that change in any form is necessary for today’s organizations to be successful in the global competition. If the change is considered to help reaching the organization’s goals or even to help the organization to survive, the change is incorporated in the organization’s identity and thus, eventually, into the person’s self-concept. Organizational change will also affect organizational identification. But whether this change is threatening or challenging and then leads to increases or decreases in identification is highly dependent on the context of the change, i.e., the necessity and continuity of the process in the eyes of the employees. Van Knippenberg and Van Leeuwen (2001) argue that the sense of continuity is key to identification with the postmerger company (see also Van Leeuwen, Van Knippenberg, & Ellemers, 2003). If employees feel that the merger does not affect their daily work, this sense of continuity helps translating the premerger identification (with the former organization) into a new identification with the postmerger organization. If, on the other hand, changes in organizational culture and climate lead employees to perceive large discontinuities between pre- and postmerger organization, it is unlikely that a high identification with the premerger organization continues to be a high identification with the postmerger company. However, one can also assume positive effects of discontinuity for some employees in line with the challenging aspect of change as proposed by Rousseau (1998, see above). The fusion itself might provide opportunities to a change for the better, particularly for those who did not feel attached with the organization prior to the merger. To summarize, we can assume that perceived
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continuity and discontinuity lead to the following combinations of identification among the merger partner’s employees: (1) individuals who perceive high continuity and were highly identified prior and post merger (high/high); (2) individuals who perceive continuity but were neither identified prior nor post merger (low/low); and (3) individuals who perceive discontinuity as a threat and who were originally strongly identified but only weakly post merger (high/low). This group of employees in particular can be expected to have the most negative attitudes. Finally, (4) individuals who perceive discontinuity as positive since it is challenging and who were not identified originally but who are identified post merger (low/high). Empirical studies show that it is useful to differentiate between different foci of identification. Van Knippenberg and Van Schie (2000), for instance, distinguish between work group identification and identification with the organization as a whole and found that work group identification was more closely associated with a range of work-related attitudes than identification with the organization as a whole. Van Knippenberg and Van Schie argued that this result was plausible because the more narrow focus should always be more salient in everyday working life and should therefore have more impact on attitudes and behaviours. Van Dick, Wagner, Stellmacher, and Christ (2004) studied four different foci of identification among school teachers (identification with career, team, school, and occupational group, respectively). Their results revealed that it was not always team identification that was related closer to work-related variables, but that the association between identification and criteria like, for example, extra-role behaviour on behalf of the own qualification, on behalf of colleagues or on behalf of the organization as a whole was dependent on the level of specificity or correspondence (cf. Christ, Van Dick, Wagner, & Stellmacher, 2003). Finally, Scott (1997) considered different levels of identification in a geographically dispersed organization (e.g., regional identities) and found empirical support for the usefulness of this distinction. According to this theoretical and empirical work we consider it as also relevant to distinguish between foci of identification in the case of organizational mergers. In this context it is fruitful to distinguish between at least two foci of identification, that is (1) identification with the premerger subunit of the postmerger organization which is often implicitly or explicitly still existent, at least in the subjective feeling of the employee, and (2) identification with the new, larger organization post merger. Identification with both categories will be relevant for the explanation of work-related attitudes and behaviours. When the premerger subunits still exist as separate entities—as it is the case in the merger we present in the empirical part of the present article— they continue to contribute to the employees’ self-definition and thus their self-esteem. In addition to this, the fusion provides a new and larger group the employee can identify with. In line with the arguments of Gaertner and colleagues (2001) it can be expected that both premerger organizations form a new common identity. If there is at least a minimum amount of perceived continuity in working
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conditions, tasks to perform, and so on, prior and following the merger, employees will be able to use both categories—the larger merger as well as the subunits—as categories to identify with. The management and activation of the pre- and postmerger entities can be considered to be very similar to the situation of employees of global players for instance, who can identify both with the company as an internationally operating large category as well as with the national branch they are actually working for (see Ashforth & Johnson, 2001, for a discussion of multiple identities in organizations). To summarize, the social identity approach assumes positive relations between social identification with organizational groups and attitudes related to and behaviours on behalf of these groups. The theoretical rationale for this assumption is that via social identification the norms and values of the organization (or parts of it) become incorporated into the individual’s selfconcept and thus contribute to that part of his or her self-esteem that is dependent on the individual’s social identity. As a result, the individual thinks and acts in a congruent way with this identity and will be more motivated, satisfied and ready for engagement on behalf of the group. These assumptions have been supported in empirical studies (e.g., Van Dick & Wagner, 2002; Van Knippenberg & Van Schie, 2000) and a recent meta-analysis (Fontenot & Scott, 2003). Following these theoretical arguments and its empirical evidence we expect positive relations between both forms of identification and work-related criteria, i.e., employees who are more identified with either the premerger subunit or the postmerger larger organization will be more satisfied with their jobs, will experience less negative emotions with respect to the merger, will have lower turnover intentions, and will be willing to show extra-role behaviour to a greater extent. Of particular interest however, is the combination of both identities. Any organization provides multiple potential nested identities (work team, department, company, etc.). In the case of an organizational merger the two relevant categories are the former organization and the larger organization post merger. Which of these identities becomes the most relevant for the employee’s behaviour depends on the relative salience in a given situation (cf. Ashforth & Johnson, 2001). For those being highly identified with both the premerger subunit and the postmerger organization, the sense of continuity can be assumed to be high and thus the premerger identification has been transferred into a high identification with the new entity (cf. Van Knippenberg & Van Leeuwen, 2001). This should be particularly the case in our example where the two premerger organizations continue to exist as separate entities (cf. Van Leeuwen & Van Knippenberg, 2003). It can therefore be expected that these employees will hold the most positive attitudes. On the other hand those with only little identification with both foci can be expected to have the most negative attitudes because they have been negatively preoccupied towards their organization previous to the merger and the ongoing change would have no impact on this negative belief pattern.
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To summarize, after an organizational merger has taken place, we would expect (1) to find positive correlations between both foci of identification and work-related attitudes. Moreover, we would expect (2) interaction effects of identification with the two entities, i.e., the premerger subunit and the postmerger larger organization. For those being highly identified with both entities (high/high), the premerger subunit is continuing to provide a basis for self-esteem and, on the same time, the transformation of the premerger identity into the new larger identity of the postmerger organization has worked particularly well and these employees should be best off with respect to satisfaction etc. For those who were identified only to a weak extent to the premerger subunit and continue to be weakly attached to the organization post merger (low/low), comparably lower levels of job satisfaction and extra-role behaviour and higher levels of turnover intentions and negative emotions can be expected. More interestingly, however, are outcomes for the other two plausible combinations. For those who were not identified with the premerger subunit but who do identify with the organization post merger (low/high), the merger obviously has changed the situation to the better and one can expect positive reactions towards the merger, i.e., less negative emotions and more job satisfaction. The worst situation can be expected for those who were highly identified prior to the merger but cannot identify with the organization post merger (high/low). Here, the perceived threat of discontinuity has lead to a drop in identification and this in turn is associated with more negative emotions, less job satisfaction, and a higher inclination towards turnover intentions. METHOD Background and procedures In the spring of 2001, a local council responsible for medical healthcare developed a concept for merging two hospitals for psychotherapy and psychiatry. Both hospitals were of nearly equal size (about 600 employees each); both are mainly dealing with adult patients (with an additional department for child therapy in one of the hospitals); both are situated at the surroundings of two middle-sized cities in Germany, about 30 kilometres apart. The plans for the merger were launched in summer 2001, and were formally completed by merger agreements between representatives of council, senior management, and unions. It was made explicit that no jobs should be cut because of the merger, but, instead, that jobs should be retained, facing the more and more competitive market in this sector. The plan was to keep both hospitals as separate entities with respect to the therapeutic sector but to merge facilities such as kitchen, laundry, and most parts of the administration in one of the locations. In May 2002, the researchers were formally commissioned with conducting an employee survey. After discussions with all relevant parties involved in the merger,
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standardized questionnaires were developed and pretested. In September 2002, questionnaires were distributed to all 1244 employees of both hospitals. Participation was voluntary and confidential. At the time of the study, only very few employees (N=6 in our sample) had switched positions from one to the other hospital. The only major change was that the CEO of one hospital became CEO of the new merger working half of the week in one and the other half in the other hospital. Both subunits kept their names (Centre for Psychiatry in [name of one of the two cities]) and together they got a joint name for being part of the merger (Center for Psychiatry in [name of the region]). However, despite the few changes planned to happen in the long run and that actually happened after the merger agreement, the merger was perceived as a big change for the employees— this became apparent in employee meetings documented in the form of letters and articles in the local newspapers. Participants and questionnaires The overall response rate was 37%. The sample consisted of 459 employees; 38% are female, 63% of the total sample were working in the therapeutic sector (e.g., as medical doctors, nurses, educators), and 37% in other domains—mainly in administration. The questionnaire contained scales measuring team climate, evaluation of different quality management measures, etc. but for the purposes of the present article, only the following parts are of interest. Organizational identification. This was obtained with respect to the two relevant domains. Four items were intended to measure identification with the subunit that exists prior to the merger and is continuing to exist after the merger. These and the items measuring the other concepts are provided in the appendix. Four items were intended to assess identification with the postmerger organization as a whole. These were identical to those measuring premerger subunit identification and differed only in the organization’s name. The identification measures were used in our previous research in a number of different occupations and have been demonstrated to be of sufficient internal reliability as well as of sufficient discriminant and convergent validity (see, for example, Van Dick et al., 2004). Job satisfaction. This was measured with three items adapted from the Job Diagnostic Survey (JDS; Hackman & Oldham, 1980; see Appendix). Organizational citizenship behaviour. OCB was assessed with five items tapping extra-role behaviours as defined by Organ (1997; see Appendix). Originally these items were formulated to tap two aspects of extra-role behaviour, which is behaviour directed towards the organization as a whole and altruistic behaviour towards colleagues. Factor analyses revealed, however, that both factors could not be separated in the present data (Eigenvalue of the first factor extracted in a principal components factor analysis was 2.5 (second factor: 0.8) with very high factor loadings of above 0.6 for all items).
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Negative emotions. These were assessed with two items (“With respect to the merger I experience anger”, and “With respect to the merger I experience fear”, respectively). Both items were sufficiently correlated, r=.48, pRAD, RND RND>RAD NC
