INDIVIDUAL AND ORGANIZATIONAL IDENTITIES IN MERGER CONTEXTS: A BOUNDARY PERSPECTIVE

Bruno Felix,Mário S Bento

doi:10.1590/1678-6971/eramg170104

Bruno Felix, Mário S Bento

Open Access

https://doi.org/10.1590/1678-6971/eramg170104

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Abstract

ABSTRACT Purpose: To understand the boundary dynamics between organizational and individual identities that are negotiated in mergers. Originality/value: This was the first study to explore the interface of the boundaries between individual and organizational identities in merger contexts. Design/methodology/approach: The results are presented as a grounded theory based on interviews with 64 individuals from 16 different companies that have undergone mergers. Findings: We analyzed conflict, intrusion, distance and balance as consequences of internal and external identity boundaries’ (in) congruence between organizations and discussed how companies can minimize individual and organizational (of the merged company) identity conflicts through boundary work. Furthermore, we discussed the relationships between organizational and individual identity boundaries. The grounded theory we developed held that the degree of permeability between the internal and external boundaries between the organizations involved in a merger determines the types of episodic events and permanent states of conflict between organizational identities. In general, our study contributes to a holistic and comprehensive vision of how the boundaries between identities at the organizational and individual levels contribute to identity formation and the retention of individuals in the new merged organization. Suggestions for practice and for future researches are provided.

Highlights

In recent decades, more than 40,000 mergers and acquisitions (M&As) have occurred around the world involving amounts that exceed US$ 5.5 trillion (Cho, Lee, & Kim, 2014)
This study aimed to understand the boundary dynamics between organizational and individual identities that are negotiated in mergers
In the post-merger period, we sought to understand: 4. How do individuals react to conflicts between their personal identities and the organizational identity of the merged company?. This qualitative study was conducted based on in-depth interviews with 64 employees from 16 companies that have undergone a merger with the aim of developing a grounded theory (Glaser & Strauss, 1967) to understand how the boundary dynamics between individual and organizational identities occur in merger contexts

Summary

Introduction

More than 40,000 mergers and acquisitions (M&As) have occurred around the world involving amounts that exceed US$ 5.5 trillion (Cho, Lee, & Kim, 2014) During this period, with rising competition in an increasingly global market, mergers have been used as a growth strategy to add successful brands to a portfolio (Joseph, 2014), to increase market share and to reduce costs by capturing operational synergy (Dick, Ullrich, & Tissington, 2006; Vieru & Rivard, 2014). The interface between individual and collective identities has emerged as one of the critical factors for successful mergers (Vieru & Rivard, 2014) Given this context, studies have sought to understand how the identity construction and confrontation process takes place in the merger context. Some studies have been conducted to understand the boundary dynamics between the group identities in a post-merger organization (Terry, Carey, & Callan, 2001) and between the multiple identities of a hybrid organization and its members (MacLean & Webber, 2015)

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