Continuity and change in mergers and acquisitions: A social identity case atudy of a german industrial merger

Abstract

It is crucial from an employee’s point of view to perceive some degree of stability even in times of major organizational change. This paper examines the role
of a sense of continuity for organizational identification after an organizational merger. We argue that mergers and acquisitions so often end in failures partly because the change is designed in discontinuous ways and employees do not feel they are doing the same job after the merger as before. Such discontinuous change engenders a critical tension between positive and negative effects of identification that has not yet been fully understood. To deepen the understanding of this tension, in-depth interviews were conducted in a recently merged German industrial company. Based on these qualitative data we demonstrate how features of the postmerger company structure and the way it was implemented may have eroded
organizational identification. Finally, we propose a parsimonious model to be tested by future research, in which the sense of continuity is consisting of both observable as well as projected continuity.