THE EFFECT OF INTEGRATION APPROACH ON EMPLOYEE ATTITUDES THROUGH ORGANIZATIONAL CULTURE CHANGE AND HR INITIATIVES DURING MERGERS AND ACQUISITIONS

Abstract

Mergers and acquisitions (M&A) have been widely recognized as key strategies to achieve sustainable business growth and competitive advantage. Unfortunately, the success rate of M&A has not been fully meeting expectations. In a study of a M&A at an Indonesian company, 101 employees were surveyed on their organization’s culture before and after the merger, the effectiveness of human resources in dealing with the merger, and their organizational commitment and employee engagement. It was found that the employees who underwent a preservative approach had greater organizational commitment and employee engagement compared to those who underwent a transformational approach. Those who underwent a preservative approach perceived less culture change during the merger. The effectiveness of human resources in dealing with the merger was found to moderate the relationship between culture change and organizational commitment, such that greater culture change was related to lower commitment when human resources was ineffective. However, when human resources was effective, there was not a significant relationship between culture change and commitment.