This research extended the findings on the effect of merge and acquisition by applying social identity theory. Various correlates of merge and acquisition were investigated using 864 South Korean employees. This investigation had three purposes. The f...
This research extended the findings on the effect of merge and acquisition by applying social identity theory. Various correlates of merge and acquisition were investigated using 864 South Korean employees. This investigation had three purposes. The first was to develop social identity scale concerning merger organization situation. The second purpose was to compose pre-merger organizational identity management strategy scale and identify its factor structure. Finally, the effect of status perception and the legitimacy and stability of status difference between employees from merging and merged organization on pre-merger organizational identity and pre-merger organizational identity management strategy was identified. Also, the role of pre-merger organizational identity and organizational culture similarity on post-merger organizational identity was examined. In addition, the effects of post-merger organizational identity and pre-merger organizational identity on organizational effectiveness were examined. The main results were as followed. First, three factors (group self-esteem, group identification, group involvement) were found using exploratory and confirmatory factor analysis in the first study. Second, eight factors (individuality, assimilation; individual strategy vs hostility behavior, the pursuit of in-group superiority; collective behavior strategy vs subgroup categorization, new comparison dimension, and re-evaluation of comparison dimension; collective cognitive strategy) were identified in the second study. Finally, employees who perceive their current status to "high status" after merge and acquisition, they are less likely to use individual strategy but more likely to use collective behavior strategy. Also, the higher the pre-merger organizational identity and the similarity of organizational culture, the higher the post-merger organizational identity which leads to high organizational effectiveness. On the other hand, employees who perceive their current status to "low status" after merge and acquisition, they are less likely to use individual strategy but less likely to use collective behavior strategy. Also, the higher the pre-merger organizational identity and the similarity of organizational culture, the lower the post-merger organizational identity which leads to low organizational effectiveness. Future research is needed to enhance our understanding of the effect of merge and acquisition to develop a plausible model based upon this research.