The impact of status on employee commitment to mergers

The Spy Who Loved Me is one of my favourite Bond films. One of the images that forever remains printed in my mind is the giant tanker, Liparus, opening up its doors and swallowing submarines. I always use this analogy during mergers to help explain reactions to the proposed changes. Because for smaller organisations or departments, they can feel powerless like those submarines being consumed by the giant tanker and this can flavour how employees in those organisations respond.

Therefore, I was really interested to read research published in the September 2017 edition of the British Journal Social Psychology which shows how the status of an organisation can influence how committed employees are (or aren’t) to a merger.

Whilst the focus of the research was on the commercial world, there are implications for the public and charity sectors too. For example, where departments merge (social care with housing), or organisations merge (two councils becoming one; a smaller charity being merged with a larger one).

How employees feel their organisation or department is viewed in relation to the other will have an impact on how well people adapt to the merger-instigated change.

When mergers are announced it can:

  • Disrupt employees’ sense of identity
  • Lead to a loss of purpose
  • Lead to lower productivity

In addition, employees from lower status organisations or departments are more likely to react negatively to the change.

The research

The researchers used the work of Giessner et al (2006) as the basis from which to explore the impact of mergers on commitment to change. Giessner and colleagues found there are typically four merger patterns:

  1. Assimilation – where the lower-status organisation is assimilated in to the higher status organisation;
  2. Integration-proportionality (IP) – where pre-merger status differences are kept and reproduced in the new organisation;
  3. Integration-equality (IE) – where both organisations are equally represented; and
  4. Transformation – where both organisations form a completely new organisation with new culture and identity.

144 people were surveyed across various sectors, of which 32 had been through mergers in real-life. Participants were given a fictional merger scenario to which they were asked to respond to at various points. The researchers focused on the IE and IP aspects of the Giessner model with the view that context is key to attitude formation.

The findings

Where pre-merger status differences were retained post-merger (IP), the research showed that:

  • The impact of the merger was moderated by how well employees were able to process the information given to them (i.e. quality and regularity of information, along with being given time to process); and
  • The impact of the merger on levels of commitment to change was insignificant.

Where both organisations were equally represented post-merger (IE), the research showed that:

  • There was more commitment from employees from the lower-status organisation; and
  • When people are given sufficient time to process and understand the merger information they are more likely to be committed to the change.

In summary, how employees make sense of and build on information given to them about the merger-instigated change is key to their commitment. This is, in turn, fed by how equal or proportional any merger is or isn’t perceived to be.

Implications for organisations and practitioners

The main take-away is that the more effort that is put into providing enough quality information about the proposed merger, the more likely it is to gain commitment to change.

In particular, the researchers state that information processing in the early stages of the change are key to the attitudes that will form over time. They cite the work of John Kotter where he estimated that in the first three months of organisational change information about the change is only about 2% of all information provided. Therefore:

  • Have your change communication and engagement strategy lined up before you launch the merger is crucial;
  • Ensuring you are putting out enough quality information regularly once you press the ‘go’ button is vital; and
  • How things are worded is important. If you want to create a sense of equality between organisations or departments that are merging then ensuring you check for language that implies status differences is critical.

I would also advocate the use of a ‘transition monitoring team’ (a group of employees representing them and their colleagues) to test out information before it goes wider, as well as using them to test the reactions to information once it’s gone out. I’ve used TMTs for various changes over the past 15 years and it can make a real, positive difference to how committed and adaptive to the changes employees feel.

If you’ve experienced or led a merger, either of organisations or departments, what were the things that made a positive difference? Share your thoughts and ideas in the comments box below.

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