Walking the Talk: A Multistakeholder Exploration of Organizational Authenticity, Employee Productivity, and Post-Merger Performance

Abstract

Does consistency between how a firm treats employees (what it does) and its espoused employee-oriented values (what it says) affect employee productivity? Furthermore, given that the stakeholder theory perspective holds that what happens to one stakeholder influences other stakeholders, does this sort of consistency vis-à-vis a firm's customers also influence employee productivity? We empirically investigate the influence of organizational authenticity—defined as consistency between a firm's espoused values and realized practices—in the context of a merger, and specifically during post-merger integration. Our findings show that a lack of organizational authenticity in terms of both under-promising and over-promising to both employees and customers is associated with lower productivity, which in turn is related to long-term merger performance, thus affecting outcomes for shareholders. These findings support the importance of authenticity and should therefore be of interest to executives responsible for ensuring the consistency between what a firm says and what it does, as well as those who participate in and study the merger integration process. In particular, we propose stakeholder theory as a helpful lens for examining the merger integration process as well as other joint actions such as strategic alliances.