Authors: CHRYSAVGI KEFI, Sofia Chatzi

Title: Strategic Management in period of financial crisis. Analyzing employees’ attitudes towards mergers and acquisitions

Abstract

Since the global financial crisis began in 2008, Greece has been experiencing one of the most severe financial crises in its recent history. This has led to significant social and political changes. Strong uncertainty, failure to cope with financial obligations, lack of liquidity in the market, unemployment and lack of security are some of the effects of the aforementioned financial crisis. Many organizations in Greece, in their efforts to survive and remain competitive, have implemented strategic alliances to share available resources, acquire new knowledge, and share experiences and skills. As an aspect of strategic management, M&A allow enterprises to reinforce, restructure the nature of their business while at the same time help them to survive. However, since M&A transaction is a very complex practice and involves many parties, results from such efforts are often disappointing.

So, the overall goal of our research was to examine the attitudes of employees towards M&A. We tested our hypotheses in a sample of 118 employees working in the Greek private sector. Close-ended questions were adapted from other studies to measure workplace organizational justice, organizational commitment, respondents’ identification with the organization, their intentions to leave the organization, and organizational citizenship behavior (OCB).

The findings showed that during organizational change employees’ justice judgments play an important role in their behaviors. Procedural justice can prevent employees’ withdrawal intentions after M&A are implemented, while high levels of employees’ identification with the organization can positively affect employees’ organizational citizenship behaviors during mergers and acquisitions. On the other hand, identification with the organization, distributive and interactional justice did not relate to withdrawal intentions. Neither distributive justice nor procedural and interactional justice predicted OCB. Even though M&A might significantly change employees’ working safety conditions and welfare and harm employees’ organizational commitment to the new enterprise, our results showed that procedural justice and identification with the organization before change might affect the levels of organizational commitment after change. However, our analyses resulted to two non-significant factors of organizational commitment that is distributive justice and interactional justice. Lastly, our findings depicted that organizational commitment fully mediated the relationship between identification with the organization and OCB, while at the same time mediated the relationship between procedural justice and employees’ withdrawal intentions.