Thinking of mergers and acquisitions? Think of justice: a people perspective

Abstract

Purpose Achieving a highly satisfied and committed workforce, during post-merger integration (PMI), has made employees’ perceived organizational justice a vital construct in the mergers and acquisitions (M&A) research. For example, employee attitudes like satisfaction and commitment influence overall M&A outcomes, but employee responses primarily depend on their perceptions of justice for the merged organization. Hence, the purpose of this paper is to investigate the cause and effect of employees’ perceptions of justice during M&A. Design/methodology/approach This research used a mixed-methods research design (qual and quan). The quantitative investigation of 207 M&A survivors from 3 M&A deals examined the relationship between perceived organizational justice (three dimensions) with employees’ level of affective commitment and satisfaction during PMI. The multivariate analysis was performed to analyze this data. A thorough thematic content analysis of the in-depth interviews of ten M&A experts and strategists helped to develop a detailed theoretical model of justice during M&A. Findings The resultant model highlighted the three antecedents of perceptions of justice, i.e. human integration, cultural integration and task integration, which together explained the employees’ perception of justice during M&A. Perception of justice was further found to influence employees’ psychological outcomes and overall synergy realization. Originality/value The current study adds to the literature by providing a holistic understanding of the justice phenomenon during M&A by focusing on its antecedents and outcomes, and thus, proposes a detailed framework. The current study also emphasizes on the relative importance of procedural and interactional justice over distributive justice in determining employee attitudes toward change.