Management Behavior on InterClean-EnviroTech Merger

The current essay has the intention to briefly analyze the merger situation between the two companies InterClean and EnviroTech, after the acquisition of the latter from the former organization. As a part of InterClean’s new strategy newly proposed solutions/service model, sales reps from both companies will be set into multi-functional teams taking advantage of all the expertise gathered mutually from these organizations in the Cleaning and Sanitation Industry.
A merger or fusion between organizations is always a sensitive subject to deal with, since the human capital from the companies involved will experience a cultural, structural and managerial change that needs to be handled delicately during the transition, in order to impact the least on areas like employees social identity, behavior and attitudes toward organizational commitments, turnover intention of key players among the company, to name a few.
Lipponen, J., Olkkonen, M., & Moilanen, M. (2004) explain the approach of social identity theories, by stating that they “share the same fundamental assumption that individuals define themselves in terms of their social group memberships and that group-defined self-perception produces distinctive effects on social behaviour and intergroup relations. This means that the more an individual conceives of him- or herself in terms of membership in a group or, in other words, identifies with the group, the more his or her attitudes and behaviour are governed by this group membership”. The authors on their study also explain that concepts like procedural justice (‘perceived fairness of the formal procedures used in allocation decision-making’) distributed justice (‘perceived fairness of the allocation outcomes’) and interactional justice (‘perceived fairness of the interpersonal treatment received from the decision- makers or supervisors’) have a substantial impact on the employee behavior and attitudes outlined above.
Terry, D., & Callan, V. (1998) explain that “there are many examples of mergers failing because of the ‘us’ versus ‘them’ dynamics that occur if employees do not relinquish their old identities”.
It is essential that all these situations be considered in advance to design a proper pre-merger communicational, monitoring and training strategy to aim for a successful transition with the least possible impact and assure a better performance. There are two sociological terms widely known in the HR environment appearing mostly on the social identity theories, which explain the individual feelings among the members of a unit regarding loyalty and respect to the membership of the group. Ingroup in one side, supports on the loyalty and respect among the members, while on the other side Outgroup leans towards the individual feelings of dislike, opposition and competition. Terry, D., & Callan, V. (1998) on their discussion about the Ingroup Bias in response an Organizational Merger explain “there is an accentuation of intergroup status differences. As a consequence of the salience of their relative inferior status, employees of the lower status organization should be particularly threatened by the merger situation and hence should engage in high levels of in-group bias, particularly on the status- irrelevant dimensions. For the employees of the high-status organization, levels of threat, particularly during the anticipatory phase of a merger, are likely to be lower than among the low-status employees. However, in an effort to verity their superior status in an unstable intergroup context, it is likely that they will engage in more in-group bias than the low-status employees on the status-relevant dimensions”. This is apparent on the Water Cooler conversations between the employees. It is fundamental that the communicational campaign during the pre-merger places as clear as possible the roles of the players in the joining experience, because there will always be a difference on the status, but the smoothness of the transition would be more likely to succeed if the employees understand the advantages of learning from each other experiences, helping on their “motivation to enhance their feelings of self-worth”, knowing that people are motivated to associated favorably with other groups, hoping to belong to high-status groups within the new merged company. References:

Terry, D., & Callan, V. (1998). In-group bias in response to an organizational merger. Group Dynamics: Theory, Research, and Practice, 2(2), 67-81. doi:10.1037/1089-2699.2.2.67.

Bartels, J., Pruyn, A., & de Jong, M. (2009). Employee identification before and after an internal merger: A longitudinal analysis. Journal of Occupational & Organizational Psychology, 82(1), 113. Retrieved from MasterFILE Premier database.

(n.d). Employee Demographics Shape Successful Mergers, According to Stanford Business School Research. Ascribe Higher Education News Service, Retrieved from Gale: Academic OneFile (PowerSearch) database.

Lipponen, J., Olkkonen, M., & Moilanen, M. (2004). Perceived procedural justice and employee responses to an organizational merger. European Journal of Work & Organizational Psychology, 13(3), 391-413. doi:10.1080/13594320444000146.