Can Job Security Compensate For Lack of Continuity during M&A Process? - M&A Strategies and Employee Outcomes -

Merger and acquisition(M&A) brings significant changes in organizational life and positive employee outcome is critical for the success of M&A. Similar to previous research, we found that communication has a positive influence on reducing uncertainty. In addition, job security is also found to have a significant impact on post-merger organizational identification. However, contrary existing research, sense of continuity did not have any significant impact on organizational identification. One possible explanation may be that sense of continuity serves as a proxy measure for job security under organizational change, and when employees perceive high level of job security, they will more willingly cope with changes and identify with the new organization even if sense of continuity is missing. An important implication for managers is that offering job security may compensate for lack of continuity when merging organizations want to avoid the loss of human capital and expertise.