A Social Identity Analysis of Mergers and Acquisitions

Dramatic organizational changes like mergers and acquisitions (M&As) often result in rather low levels of employee identification with the organization. This puts the financial and strategic objectives of M&As at risk, because lower post-merger identification results in more conflict, lower motivation, and as a consequence decreases organizational performance. This chapter provides insights into the professional management of identity and identification processes during post-merger integration. Based on a theoretical and practical framework of identity management during M&As, it summarizes how underlying employee motives and organizational status impact on the tensions and conflicts between merging organizations and their employees. It also discusses how appropriate management of identity continuity, fairness perceptions, and leadership can increase postmerger identification. Finally, some caveats and future topics of inquiry are discussed.