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Chapter 8 - Social Identity Processes in Sino-Western Mergers and Acquisitions

from Part III - Change in Context

Published online by Cambridge University Press:  28 September 2023

Shaul Oreg
Affiliation:
Hebrew University of Jerusalem
Alexandra Michel
Affiliation:
Universität Heidelberg
Rune Todnem By
Affiliation:
Universitet i Stavanger, Norway
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Summary

Using a social identity approach, this research program focuses on how Eastern and Western managers make sense of mergers and acquisitions (M&As). Study 1 used online experiments to examine how people perceive intergroup criticism. We found that employees responded to criticism more negatively when it was made by an outgroup rather than by ingroup members. Building on the study 1 results, we further explored social identity processes and intergroup dynamics. We conducted interviews with European (Study 2) and Chinese managers (Study 3) involved in an acquisition of a European company by a Chinese holding. Study 2 shows that European managers’ organizational identity change is facilitated by alignment of a post-merger identity with their pre-merger historical identity, and over time, they engaged in collaboration and knowledge sharing with their Chinese counterparts. In Study 3, we found that Chinese managers leveraged an agile organizational identity to deal with status inferiority and rapid organizational changes. In summary, this research program addresses the need for a deeper understanding of social identity processes and change beyond M&A context, but also in other cross-cultural collaboration processes which involve employees who initially have various identities, practices, and cultural backgrounds.

Type
Chapter
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The Psychology of Organizational Change
New Insights on the Antecedents and Consequences of Individuals' Responses to Change
, pp. 170 - 182
Publisher: Cambridge University Press
Print publication year: 2023

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