Academic journal article ASBM Journal of Management

Impact of Acquisition and Trust as Perceived by the Acquiring and Acquired Employees of a Multinational Telecommunication Company in Kolkata

Academic journal article ASBM Journal of Management

Impact of Acquisition and Trust as Perceived by the Acquiring and Acquired Employees of a Multinational Telecommunication Company in Kolkata

Article excerpt

Introduction

An acquisition brings in two different entities to work together as one and it calls for a lot of integration and alignment from the part of the members of both the organizations to work together more effectively. Apart from good financial and strategic fit, success of an acquisition depends upon a good cultural fit and the quality of the organization's employees, their enthusiasm and satisfaction with the job, their sense of fair treatment, their interpersonal and organizational trust - all have an impact on the firm's productivity, level of customer service, reputation and survival.

The quest of improved productivity through better human resources management had its beginning in the late 1930s with the initiation of the human relations movement. Prior to that, F. W. Taylor's scientific management principles created a new awareness regarding those who had come to earn a livelihood in an organization. Earlier, human beings were considered as mere instruments of productivity ready to work from dawn to dusk under whatever condition and being motivated by the lure of money only. When human relations movement began to gain popularity, more attempts were made to understand human beings at work - the factors that play an important role in making their physical as well as humane environment more congenial for effective performance. Even more so in the present turbulent times when long-term organization-wide changes, like acquisition are being implemented, it calls for creation of an employee friendly work environment that helps organizational members adapt to changes and be more effective in achieving the new directions of the organization.

In the fast changing business environment, mediocre organizations have no chance to survive. Companies need to get their business wheel move speedily and achieve quality and excellence. They have to be development oriented, and have fast and consistent growth. Regardless of industry it appears to have become all but impossible for firms to compete with others, strengthen and maintain their position in the competitive global market place, without growing through deals that result in mergers and acquisitions. The phrase mergers and acquisitions (abbreviated M&A) refers to the corporate strategy corporate finance and management, dealing with the buying, selling and combining of different companies that can aid, finance or help a growing company in a given industry grow rapidly without having to create another business entity although they are often uttered in the same breath and used as though are synonymous, the terms mergers and acquisitions often mean slightly different things. An acquisition usually occurs when a company, generally a larger one, buys a smaller one for a set of amount of money or stocks or both and incorporates the acquired company's operations into its own, i.e., it clearly establishes itself as the new owner. Factors such as, cultural fit, management style similarity, the pattern of dominance between the merging firms, the social climate surrounding the acquisition, the preferred mode of acculturation of the acquiring firm have increasingly been recognized to be of critical importance to M&A success (Mark & Mirvis, 2001). Study conducted by Nikandrou and Papalaxendris (2000) revealed that acquisition often have negative impact on employee behaviour resulting in counter-productive practices like, absenteeism, low morale, job dissatisfaction, increased intensions to quit, resistance to change, focus on personal security rather than organizational goals, a tendency to not pass information, up or down and lack of cooperation. Research findings on the aftermath of an acquisition reveal that acquisition often has detrimental effects on the psychological well-being of the employees, thus affecting their performance. Employee concerns are mainly: loss of identity, lack of information and anxiety, obsession with self -survival, increased intensions to quit, terminations, merging of cultures and reward systems. …

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