Mergers and group status: the impact of high, low and equal group status on identification and satisfaction with a company merger, experienced controllability, group identity and group cohesion

Abstract

AbstractAlthough mergers are seen as tools to enhance business in today's global marketplace, they have had a low success rate, possibly because the focus has been on financial and legal issues rather than on the human factors involved. In this respect, focusing on the social psychological variables, social identity theory can provide an explanation for the failure of most mergers. An experiment based on this theory involving mergers between two workgroups was conducted to investigate the effects of merger‐related status on participants' psychological responses to the mergers. Thirty‐six small groups were assigned to three different status groups (high, low and equal status groups) using the minimal group paradigm. Most negative responses to the merger—in terms of identification with the merger group, satisfaction with the merger, common in‐group identity, group cohesion and controllability—were given by the members of the low status groups. Contrary to expectations, status was not related to the performance of the groups. Theoretical and practical implications are discussed. Copyright © 2007 John Wiley & Sons, Ltd.