Employee trust dynamics during organizational change: a context of mergers and acquisitions

Abstract

Purpose– The purpose of this paper is to explore the relationship of employees’ element of organizational trust with the processes and practices of the merged organization during post-M & A integration post-merger integration (PMI) phase. Specifically the variables of employees’ perceptions of effectiveness of HR initiatives, communication, and cultural convergence were studied as important determinants of employees’ trust.Design/methodology/approach– A mixed method research design was adopted, where quantitative data were collected through questionnaires, and the qualitative support has been gained asking open ended elaborated questions. The analysis was performed on the data obtained from 117 respondents having experienced merger or acquisition in past two to three years. Univariate and bivariate analysis were performed on the data using SPSS.Findings– The results of the study indicated the significant positive relationship amongst the variables understudy. It has been found that the poor management of the underlined processes and practices during PMI phase would negatively impact the employees’ phenomenon of trust in the merged organization.Practical implications– This research has significant implications for researchers and practitioners. This study contributes to the understanding of the psychological outcomes of M & A survivors as an imperative for strategic human resource management.Originality/value– This research is an extension of M & A performance research in terms of psychological variables, and is an initiative to discuss M & A cases from the context of a fast developing economy.