How and when organizational integration efforts matter in South Korea: a psychological process perspective on the post-merger integration

Abstract

Both business practitioners and researchers have demonstrated growing interest in organizations' post-merger integration (PMI) efforts in mergers and acquisitions (M&As). However, relatively little attention has been paid to actions directed toward the organizations' internal members. To complement the prevailing macro-level interest in PMI, the current study focuses on a psychological process that links PMI efforts and turnover intention through relative deprivation. Specifically, given that many employees typically experience relative deprivation during the M&A process, we examine whether perceptions about an organization's sincere PMI efforts reduce employees' relative deprivation and whether relative deprivation is, in turn, related to employee turnover intention. In addition, we investigate whether employees' trust in top management can serve as a boundary condition for the relationship between the perception of sincere integration efforts and relative deprivation. The results of a field survey from 271 employees at a merged company in South Korea demonstrate that relative deprivation mediates the negative relationship between the sincere integration efforts and turnover intention. Furthermore, the mediated relationship is effective only under high trust in top management. Study limitations and implications for research and practice are discussed.