Organizational Change and Performance: The Moderating Role of Human Resource Management Centrality

Abstract

In this study, we examine how the effects of mergers and acquisitions on organizational performance depend on human resource management (HRM) centrality. HRM centrality is the status of HRM in the organization. In an analysis of the data from the 2005 Cranet survey, overall results showed that i) organizational change stemming from mergers and acquisitions increased HRM centrality, ii) organizational change and HRM centrality increased organizational performance and, most importantly, iii) the positive effect of organizational change on organizational performance increased with HRM centrality. More detailed analyses revealed that the moderating role of HRM centrality itself depended on the type of organizational change, the type of responsibility for HRM practices and HRM strategic involvement, and the type of organizational performance indicators. The study offers new insights about the critical role of HRM centrality, and suggests that mergers and acquisitions should be studied as differentiated change processes.