The role of employee engagement during mergers and acquisitions.
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Date
2016
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Abstract
ABSTRACT
In the current business environment, transformational change is viewed as a competitive
advantage. In response to the ongoing change in economic conditions, some organisations
have sought to transform their strategies either by restructuring or by taking on an acquisition
or merger with another organisation. Along with change, comes the feeling of uncertainty and
insecurity. Understanding the nature of organisational change management in South Africa is
crucial to the successful implementation of change programs during transformation.
The research study reviewed literature on the main topics; mergers, acquisitions, change
management and employee engagement. The terms mergers and acquisitions were defined,
the differences were discussed along with the different types and critical success factors. The
Kotter’s (1996) Eight Step Model for Change was identified as suitable for this research to
determine the implementation of change management in the organisations. The extent to
which employees were engaged was explained using Aon Hewitt’s (2013) Employee
Engagement Model.
This study revolved around employee engagement and change management with specific
reference to change during mergers and acquisitions and investigated comparisons thereof.
The core objectives of the research were to establish the employee engagement level in a post
acquired company compared to that of a post acquired then merged company and to measure
the degree to which change management was implemented. The research study made use of a
quantitative research methodology via a structured questionnaire and was conducted using
the convenience sampling method drawn from the private chemical sector in KwaZulu-Natal,
South Africa. The organisation that was selected had undergone 2 acquisitions in the last 5
years and the latter entailed a merger of the acquired company.
The statistical tools that were used to analyse the data were frequency distribution, standard
deviation and measures of central tendency, t-test and Friedman test. The study found
moderate levels of engagement for the engagement outcomes SAY and STRIVE, with neutral
responses for intention to STAY. There were no differences found in the three engagement
outcomes between the post acquired organisation and the post acquired then merged
organisation. The comparison of the implementation of change management between the post
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acquired organisation and the post acquired then merged organisation using Kotter`s (1996)
eight step change model found no differences in the implementation of change, except for
step two - “creating a guiding coalition”, where the post acquired organisation was unaware
of the implementation and the post acquired then merged organisation remained neutral. A
core finding in the research study was that a distinction in change management
implementation could not be found in companies undergoing acquisitions compared to
companies undergoing mergers.
The information in this research study will benefit change practitioners, managers and change
leaders and help them understand change management implementation during acquisitions
and / or mergers.
Description
Master’s Degree. University of KwaZulu-Natal, Durban.