Abstract
Orientation: Over a period of 6 years, a South African pharmaceutical company had been involved in several mergers and acquisitions. These changes had proved difficult for staff and staff attrition had risen.Research purpose: The objective of the study was to explore the perceptions of senior managers about the impact of change on the psychological contract. The sub-objectives were to determine what organisational factors contribute to changes in the psychological contract during periods of change, and the implications of the breach of the psychological contract for the company and its employees.Motivation for the study: As the company was set to embark on further mergers and acquisitions, the opinions of senior managers about how such changes should be addressed are important for the company.Research design, approach and method: A case study approach was used in this qualitative study. The population comprised 60 senior managers of whom 12 were purposefully selected for inclusion in the study. A semistructured interview schedule was used to capture the views of these managers and themes were extracted by means of content analysis.Main findings: Seven themes emerged which encapsulated the perceptions of senior managers about the impact of change on the psychological contract during periods of mergers and acquisitions – lack of communication, an absence of planning, lack of employee engagement, less than optimal human resources involvement, lack of preparation of the organisational culture and poor change management processes. These factors need to be addressed to strengthen the psychological contract of employees during periods of change.Practical/managerial implications: The study highlighted areas that leaders and managers of the company should consider when embarking on mergers and acquisitions if the psychological contract of employees is not to be negatively impacted.Contribution: While caution must be exercised in the generalisation of the findings, companies in the same industry or those in other industries could use the findings as points of departure for considering the elements that should be addressed in change initiatives.
Highlights
Growing competition has created opportunities for companies to increase market share through mergers and acquisitions (M&As)
The objective of the study was to explore the perceptions of senior managers about the impact of change on the psychological contract
Proposition 1: Psychological contract breach can occur during periods of organisational change This proposition is supported by the themes that were identified by senior managers – organisational culture, employee engagement and communication
Summary
Growing competition has created opportunities for companies to increase market share through mergers and acquisitions (M&As). Many M&As fail to create value for the merged companies (Gomes, Angwin & Yedidia Tarba, 2013) because the complex interdependent subactivities of due diligence, negotiations, financing, people integration and organisational culture have not been synergised (Wei & Clegg, 2014). When implementing changes such as M&As, leaders tend to focus on business outcomes rather than on the impact the changes will have on individuals within the organisation (Aggarwal-Gupta, Kumar & Upadhyahula, 2012). The company engaged in a series of M&As between 2009 and 2015
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
