The Impact of Mergers and Acquisitions on the Sales Force. (April 2018)

• Record Type: Journal Article
• Authors: Bommaraju, Raghu; Ahearne, Michael; Hall, Zachary R.; Tirunillai, Seshadri; Lam, Son K.
• Is Part Of: JMR, Journal of marketing research. Volume 55:Number 2(2018)
• Page Start: 254
• Page End: 264
• Publication Date: 2018-04
• Subjects: mergers and acquisitions -- sales force management -- organizational image -- organizational identification -- natural experiment; Marketing research -- Periodicals; 658.8305
• DOI: 10.1509/jmr.16.0059
• Languages: English
• ISSNs: 0022-2437

Abstract

This research draws from the psychodynamic perspective of social identity theory to examine the causal effect of mergers and acquisitions involving a mismatch of external images on the sales force. Study 1, a natural longitudinal experiment, shows that a merger with a poorer-image firm immediately dilutes salespeople's organizational identification (OI), which in turn impairs their performance. As sense makers, salespeople who are more tenured experience stronger OI dilution, whereas those who perceive a high level of social inclusion experience weaker OI dilution. As sense givers, managers who emphasize the firm's strategic intent in their communication buffer the OI-dilution effect, whereas those who emphasize the firm's organizational culture aggravate the effect. Study 2, a scenario-based experiment, further demonstrates that the OI-dilution effect is stronger than the OI-enhancement effect from merging with a better-image firm. Furthermore, both studies confirm that the adverse effect of mergers and acquisitions that involve a mismatch of external image stems from image uncertainty rather than job uncertainty.