Social Identity Crisis Amongst Employees in Mergers & Acquisitions

Abstract

Purpose: The process of mergers and acquisitions has gained substantial importance in today's corporate world. During mergers and acquisitions, employees experience several emotional and social challenges. The social identity theory of intergroup behavior (Tajfel and Turner, 1979) emphasizes that an individual’s wants to hold a positive self-concept through personal and social identity. The study analyses the emotional and social dimensions of employees involved in mergers and acquisitions from the perspective of social identity theory.Design/methodology/approach: The study is a qualitative study of the emotional and social challenges faced by employees in mergers/acquisitions, using the framework of social identity theory. The data for the study was collected from a sample of HR managers and employees of the organizations which have undergone merger or acquisition via personal interviews.Research limitations: 1. The degree of recency of merger and acquisitions may lead to different responses. 2. The subjectivity involved in managing employees during mergers and acquisitions in different organizations. 3. The study is limited to the companies of Bangalore only. Practical implications: This study explores a few interesting aspects, such as: 1. The emotional and social crisis employees go through during merger/acquisition. 2. The approach adopted by different companies to address the crisis. 3. The relevance of social identity theory in merger/acquisition. 4. The important dimensions to be addressed by HR during merger/acquisition. Value: The study suggests key elements of human resources required for smooth transition in mergers/acquisitions. The study also looks into the effective management of emotions during mergers/acquisitions, eventually leading to emotional well-being of an employee.