Top Management Turnover Following Acquisitions – Why are they leaving?
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School of Business |
Bachelor's thesis
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Authors
Date
2019
Department
Major/Subject
Mcode
Degree programme
Johtaminen
Language
en
Pages
26
Series
Abstract
Research shows that top management turnover increases in the years following acquisitions and it is influenced by numerous macro-, meso- and micro-level factors. Yet the role of individuals’ experiences in explaining the decisions to leave remains inconclusive. The purpose of this thesis was to examine how M&As affect the top management turnover and what kind of individual-level factors explain the top managers’ decisions to leave the company after acquisition. The perspective is based on psychological theories concerning stress, organizational identity, role and job characteristics. The topic is studied by reviewing literature concerning the human side of M&As, and as a result, an indicative model on the underlying reasons and determinants of top management turnover following M&As is constructed. The relationships between M&A-implied changes, psychological states and employee reactions are presented. In conclusion, the findings of this thesis propose that top managers of the merged organizations go through periods of severe changes that put them under significant pressure. This causes top managers to feel uncertain, threatened and stressed, which results in psychological and behavioural responses such as changes in job satisfaction, work motivation and turnover intentions. These reactions are further related to increased turnover. The findings emphasize the serious consequences M&As have for the individuals involved. The negative reactions result in increased turnover that might be related to lower post-M&A performance. To minimize the potential negative outcomes, best practices should be identified, and formal social policies developed.Description
Thesis advisor
Yli-Kauhaluoma, SariKeywords
merger, acquisition, turnover, stress, identity, top management