Does national context affect target firm employees' trust in acquisitions?

Günter Stahl, C.H. Chua, A. Pablo

Publication: Scientific journalJournal articlepeer-review

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Abstract

In this study, we test the assumption that the way target firm employees respond to a takeover is contingent on their national origin.
The antecedents of target firm member trust in the acquiring firm management were examined in a cross-national sample of German and Singaporean employees using a policy-capturing design. Five factors hypothesized to affect target firm member trust after a takeover were found to
be significant influences on employees' trust judgments in a decision-making simulation: (i)
combining firms' collaboration history, (ii) mode of takeover, (iii) whether it was a domestic
or cross-border acquisition, (iv) degree of autonomy removal, and (v) attractiveness of the
acquiring firm's human resource policies and reward system. Further analyses suggest that
the relative importance of these factors in predicting target firm employees' reactions to a
takeover varies depending on their national origin.
We conclude that companies engaged in cross-border acquisitions need to consider contingencies
in the cultural and institutional contexts in which the acquired firms are embedded and
adapt their approaches for integrating them accordingly.
Original languageEnglish
JournalManagement International Review
DOIs
Publication statusPublished - 1 Mar 2012

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