Postmerger Strategies Healthcare Business Leaders Use
To Influence Employee Engagement and Satisfaction
Section 1: Foundation of the Study
Mergers and acquisitions (M&As) are a growing phenomenon in the business
world, as organizations continue to merge to increase market share and efficiency
(Mantere, Schildt, & Sillince, 2012). Although M&As are on the rise, the success rate is
not. M&As have a high failure rate and there has been little improvement since 1983
(Larhiri & Narayanan, 2013). Many researchers have studied the financial side of M&As;
but, there is limited research about the human side of M&As (Marks & Mirvas, 2011).
Along with M&As come culture changes, increased stress, and unknown variables that
have the potential to create conflict for employees (Drori, Wrzesniewski, & Ellis, 2011).
The purpose of this qualitative, descriptive case study was to explore strategies healthcare
business leaders use to influence the engagement and satisfaction of employees,
postmerger. The results of the study can be used to assist healthcare leaders with
increased employee engagement and satisfaction in future M&As.
Background of the Problem
Mergers and acquisitions (M&As) are becoming increasingly common for
organizations in the United States (Mantere et al., 2012). Since the introduction of the
Affordable Care Act, the number of healthcare M&As has doubled (Lineen, 2014). The
number of M&As continues to increase; however, the success rate of M&As does not
(Gomes, Angwin, Weber, & Tarba, 2012).
Researchers have been exploring the reasons why M&As fail for over 30 years,
but findings have been inconclusive (Lahiri & Narayanan, 2013). Many of the previous
researchers have examined the financial side of M&As when seeking answers regarding
why M&As fail (Chen & Krauskopf, 2013). Researchers also recommended studying the
human side of mergers (Cho, Lee, & Kim, 2014). The human side of mergers has been
cited as the primary reason for M&A failure; however, little literature exists in this area
(Kemel & Shahid, 2012). Postmerger cultural integration is a critical component for the
success or failure of an M&A (Lee, Kim, Kim, Kwon, & Cho, 2013). Many variables,
such as the merging of organizational culture and leadership, influence employee
engagement and satisfaction during times of change, such as an M&A (Vancea, 2011).
Problem Statement
One out of every three employees will take part in a merger and acquisition
(M&A) at some point in their career (Marmenout, 2011). M&As are generally not
successful, with a failure rate of more than 50% (Rouzies, 2011), and reduced employee
morale, engagement, and satisfaction contribute to 50% of the M&A failures (Kemel &
Shahid, 2012). The general business problem is that M&As often influence employee
outcomes (e.g., engagement, satisfaction). The specific business problem is some
healthcare business leaders lack postmerger strategies that influence the engagement and
satisfaction of employees.
Purpose Statement
The purpose of this qualitative, descriptive case study was to explore postmerger
strategies healthcare business leaders use to influence the engagement and satisfaction of
employees. The target population was comprised of employees at one medical facility in
the North Central region of the United States who were employed with the organization
prior to and postmerger. This case study included interviews with two different
populations as well as document review of company materials and web information. The
implications for positive social change include the potential to assist healthcare leaders
with employee engagement and increased satisfaction in future M&As.
Nature of the Study
A qualitative approach was the most appropriate for this study. Qualitative
researchers capture life as it is lived, focusing on subjects in their own settings (Dworkin,
2012). Dworkin (2012) stated that qualitative research is about the human experience and
is flexible. I studied employees in their own work environment. When a researcher is
exploring a complex issue and is looking to uncover the perceptions or experiences, a
qualitative study is best suited for collecting these data (Yin, 2014). A quantitative study
was considered, but was rejected because I was not measuring variables or using
experimentation (Hoare & Hoe, 2013). When a researcher seeks to explore the causal
factors of variables regarding a phenomenon, quantitative research is a good fit (Sergi &
Hallin, 2011).
Specifically, I conducted a qualitative, descriptive case study. Yin (2014) stated
that case studies are best when a how or why question is asked. Yin also stated that when
using a case study, the purpose is to focus on a real-world case. This study involved an
M&A in which all employees experienced the same event. I did not manipulate any
behaviors by doing an experiment. I collected data from two different groups via
interviews, and used existing documents for a deep probe into the question under
exploration. Phenomenological and ethnographic designs were also considered, but
would not have been effective because I assessed a case rather than a phenomenon
experienced by a group of specific individuals, and did not observe the subjects for long
periods of time (Yin, 2014).
Research Question
The central research question is: What strategies do healthcare business leaders
use postmerger to influence the engagement and satisfaction of employees?
Interview Questions
1. What job position did you hold during the recent merger?
2. What methods of communication were used to tell you about the merger?
3. How satisfied were you with the communication methods used?
4. What type of expectations did you have about the merger? Such as job
influence or changes in corporate culture?
5. How do you believe those expectations were met postmerger?
6. How would you describe employee engagement prior to the merger? On a
scale of 1-10, 10 is most engaged, what would you choose? Why?
7. How would you describe employee engagement postmerger? On a scale of
1-10, 10 is most engaged, what would you choose? Why?
8. How would you describe your satisfaction as an employee premerger to
postmerger? On a scale of 1-10, 10 is most satisfied, what would you
choose? Why?
9. If there were any changes to employee engagement and satisfaction, what
do you think caused that?
10. Do you think that the performance has gone up, down, or stayed the same
since the merger? Why?
11. Can you tell me anything else about the recent merger that would be
helpful for my study?
Conceptual Framework
The conceptual framework grounding this study was the social exchange theory
(SET). Homans, Thibaut, Kelley, and Blau are credited with the development of the SET
(Emerson, 1976). Homans began the effort in 1958, was followed in 1959 by Thibaut and
Kelley, and in 1979, Blau furthered developed the theory. The SET brought together
sociology, social psychology, and anthropology to explain how people work together for
a mutual benefit (Homans, 1958). The behavior of one person will influence the behavior
of another person as each considers the cost versus the reward ratio (Homans, 1958).
Social exchange theory is a useful theory when studying workplace behavior
(Cropanzano & Mitchell, 2005). Using SET can help explore employee engagement
issues in the workplace (Slack, Corlett, & Morris, 2015). When employees receive a high
level of social exchange, they will exhibit high levels of positive outcomes (Buiter &
Harris, 2013). During an M&A, there may be varying levels of communication and
expectations. How employees perceive these changes will affect the outcomes of their
behaviors. When employees believe that they are a good fit to the organization’s values
they are more likely to be more engaged and satisfied with their job (Memon, Salleh,
Baharom, & Harun, 2014).
Definition of Terms
Acquisition: The definition of acquisition is when one organization acquires a
large enough quantity of the shares of another company to gain ownership (Filho, 2014).
Corporate culture: The definition of corporate culture is a set of rules and beliefs
that employees understand and use to respond to various situations (Clarke & Salleh,
2011).
Employee engagement: The definition of employee engagement is the employee’s
emotional commitment to the company and its goals (Abraham, 2012).
Integration: Integration is defined as the combining of more than one entity to
work together (Chen & Krauskopf, 2013).
Merger: A merger is when two companies become one entity and assets,
liabilities, and corporate cultures are combined (Filho, 2014).
Assumptions, Limitations, and Delimitations
Assumptions
An assumption is something taken for granted, and not testable (Nenty, 2009). In
this study, I assumed that the participants answered questions honestly and that the
participants willingly talked openly about the subject of M &As. Another assumption was
that the documents and materials I reviewed such as website, mission and vision, and
employee handbook were reliable and valid.
Limitations
Limitations are unavoidable or uncontrollable factors or weaknesses that can limit
or affect the study design and findings (Nenty, 2009). Also, respondents might have had
bias toward the healthcare organization. Generalizability is not applicable because this
study is limited to one healthcare facility. Transferability may also be limited, as the
results from this study may not be the same for another organization.
During the interviews, I was physically present, which could affect the
participant’s responses by creating reflexivity (see Yin, 2014). The merger occurred in
the past, so the participants were recalling retrospective data. Another limitation may be
that the leadership staff might have shown bias toward the M&A process because of their
position as the implementation leaders.
Delimitations
Delimitations are boundaries a researcher sets to create the focus of the study
(Alina, Matis, & Oriol, 2012). In this study, I focused on the employee side of the M&A,
and did not include any financial information. The four leadership employees who I
interviewed, as well as the four nonleadership participants, included employees who have
been with the organization prior to and after the merger. Data included documents
provided by the company (including an employee handbook) as well as any information
that the company presents on its website that alludes to the culture (e.g., mission and
vision).
Significance of the Study
Contribution to Business Practice
This study has value to business because it may assist with the efficacy of future
healthcare M&As, and potentially M&As in general. Gaining an understanding of
healthcare worker’s perceptions and experiences post M&A might allow leaders to make
positive changes toward future M&As. The data collected from this study will contribute
to professional application because it may assist with the creation of a more engaged
workforce, both in healthcare and beyond.
There is a consensus among researchers that M&As are on the rise (Weber,
Belkin, & Tarba, 2011; Weber & Drori, 2011). M&As are occurring at faster rates, which
puts more pressure on leadership and employees (Weber & Fried, 2011). The human
component contributes to a large portion of postmerger failure (Lundqvist, 2012; Marks
& Mirvis, 2011). The human side of mergers needs to researched more in depth (Edwards
& Edwards, 2013). The data collected from this study will begin the journey into the
employee side of M&As.
Implications for Social Change
The results of the study may provide leaders with additional information on how
to successfully merge two organizations, as well as two organizational cultures. If leaders
are able to extend focus to factors that influence employee engagement and satisfaction
during and M&A such as leadership, communication, and culture this engagement would
lead to a more satisfied workforce. The implications for positive social change include the
potential to increase job satisfaction and engagement for healthcare workers. In addition
to these potential increases in job satisfaction and engagement comes the potential for
increased quality of care for patients in the population at large.
A Review of the Professional and Academic Literature The
following literature review contains material from various sources of literature
related to M&As and culture. I conducted reviews of articles from peerreviewed
journals, books, reports, and periodicals. Specifically, the material reviewed is
related to M&As, employee engagement, corporate culture, and employee
satisfaction. In the review of literature, I provided an understanding of what
issues might arise during a healthcare M&A, and the influences that may result in
lowered employee engagement and satisfaction.
I organized this review into eight categories and nine subcategories. The main
categories are SET, mergers and acquisitions, employee, employee engagement,
employee satisfaction, organizational culture, leadership, and communication. The
subcategories for M&As are downfall, and integration. Subcategories for employee are,
turnover, employee perceptions, psychological influence, and trust. Employee
engagement has the subcategories of leadership, and increasing engagement. The
category of employee satisfaction had one subcategory of stress. The categories of social
exchange theory, organizational culture, leadership, and communication do not have
subcategories.
For this study, I used several sources and searches. The majority of the searches
were done through the Walden University Library. The main databases used were:
ABI/INFORM Global database, Business Source Complete, ProQuest database, SAGE
Premier, and Google Scholar. Keyword searches included the following words in various
combinations; merger, acquisition, healthcare, employee engagement, employee,
employee performance, employee satisfaction, integration, change, organizational
change, postmerger, social exchange theory, turnover, perceptions, organizational
culture, corporate culture, communication, and strategic change. The literature review
contains 69 different resources. Of the 69 resources, 63 were published within 5 years of
anticipated program completion. The six resources that were older than 5 years were used
for the purpose of seminal research regarding SET. Furthermore, of the 69 total resources
used, 67 are from peer-reviewed sources, which meets the 85% rule.
The purpose of this qualitative descriptive case study was to explore what
strategies that healthcare business leaders use that may influence the satisfaction and
employee engagement of employees working in the healthcare field, after a merger. The
data was collected in the North Central region of the United States. The analyzed data
will then be used to assist healthcare leaders increase employee satisfaction and
engagement in future M&As.
The purpose of this literature review was to analyze a variety of sources to provide
a thorough understanding of the existing literature and framework. The literature review
includes the needed topic support and adds knowledge on the topic (e.g., Rowley, 2012).
A literature review can also assist with avoiding duplication of existing research and shift
focus to recommendations for future research (Rhoades, 2011).
Conceptual Framework: Social Exchange Theory
The conceptual framework grounding this study is the social exchange theory
(SET). Homans, Thibaut, Kelley, and Blau are credited with being the major developers
of the SET (Emerson, 1976). Emerson also assisted with furthering the development of
the theory (Cropanzano & Mitchell, 2007). Many researchers have continued work on
this theory including Cropanzano and Mitchell.
Homans (1958) began the SET effort in 1958, based on small group research done
by Georg Simmel. Homans was a self-proclaimed psychological reductionist who wanted
to learn more about what people in small groups of two or more people do to influence
each other. Homans focused on small groups of two or three people basing ideas on
elementary social behavior.
Homans (1958) indicated that people’s interactions entailed an exchange of
material and nonmaterial goods and suggested that a theory bringing sociology closer to
economics would be useful to describe social exchange. When two people interact with
one another, they are engaged in an exchange. Researchers suggested that the nongoods
transactions might be more influential than the physical transactions (Homans, 1958).
How an individual reacts to the other’s behavior was the area of Homans interest.
Homans proposed that two people engaged in an exchange also have costs associated
with the exchange. How they determine the values of the costs is how decisions are made
(Homans, 1958). Homans indicated that when someone gets an excess of one value they
would most likely not value it as much in the future and react differently to certain
situations.
Homans (1958) discussed cohesiveness as what attracts people to a group, as well
as approval, or a reinforcing activity. When members of a group have a positive
exchange, they are more likely to increase the number of interactions with that group and
its members. Conformers and deviants were two types of group members examined.
Conformers tend to follow the norm and not cause waves in a group, whereas the deviants
have behavior that is not found valuable among group members. The group members will
try to change the deviant’s behavior and the deviant will have a low sociometric place
(Homans, 1958).
Homans (1958) recommended the conduction of more studies to find a connection
between real life and experimentation. The researcher proposed the theory that social
behavior is an exchange. Social behavior can be an exchange of material or nonmaterial
goods. When someone is a participant in an exchange, he or she will give something in an
exchange at a cost to themselves, but may also receive a reward in return (Homans,
1958). Homans (1974) described three propositions regarding human behavior. The
success proposition; when a person is involved in a positive exchange, the more likely
they will repeat that action again. The stimulus proposition; If in a past experience a
stimuli has been rewarded for a particular action, and in a future situation similar stimuli
are present, the person is more likely to perform the action in a similar way. The
deprivation-satiation proposition; the more often that someone is getting a reward for
something, the less valuable the reward will be in the future (Homans, 1974).
That exchange participant is also trying to obtain the maximum reward for
themselves, and desires to be the most profitable within the group (Homans, 1958).
Homans (1974) added the value proposition; the more valuable the reward, the more
likely that the person will perform the action again. The SET brings together sociology,
social psychology, and anthropology to explain how people work together for a mutual
benefit (Homans, 1958). The behavior of one person will influence the behavior of
another person as each considers the cost versus the reward ratio (Homans, 1958).
Homans relied heavily on distributive justice.
The work of Thibaut and Kelley strengthened the general exchange approach
work that Homans began (Emerson, 1976). Thibaut and Kelley took a different approach
than Homans by trying to understand psychological concepts first, heading upward to the
dyad, and finally upward to the small group (Thibaut & Kelley, 1959). Thibaut and
Kelley did not believe that SET was a theory, but instead was a reference where many
theories could live (Thibaut & Kelley, 1959). Thibaut and Kelley explored exchange
patterns (Thibaut & Kelley, 1959). The researchers studied the idea of reciprocal
interdependence, and explored exchange sequence patterns (Thibaut & Kelley, 1959).
Blau (1964) further developed the social exchange theory in 1964 by calling out
Homan’s conflicting tendencies, and implications for social change. When Blau began
working on this, the concept of general approach started to be taken seriously, as he was
the third researcher to further investigate this theory (Emerson, 1976). Blau was different
from the previous researchers and stayed away from focusing on psychology. Blau
thought this could create blinders and important parts of social exchange could be missed
(Emerson, 1976). Blau had a slightly more economic view, and as a utilitarian, Blau
viewed the participant as forward looking. The participant would anticipate what the
reward would be, and choose the action that would provide the maximum benefit. There
are two types of social exchange; economic and social. Economic exchange occurs when
there is an agreement implemented for economic gain, such as an employment contract.
The social exchange is not agreed upon in advance, and is implicit (Colquitt & Rodell,
2011; Slack et al., 2015).
Blau asserted that trust is of importance in social exchange (Colquitt & Rodell,
2011). One of the most basic ways that humans interact is mutual reciprocation (Lee,
Capella, Taylor, Luo, & Gabler, 2014). Blau (1964) further discussed social exchange,
and the process of distributive justice. Blau summarized distributive justice as the cost of
investment versus the returns received for that investment. To put it simply, a positive
action will lead to a positive reaction, and vice versa (Lee et al., 2014). Blau added on to
Homans’ ideas by suggesting that the norms created by society influence what is deemed
an acceptable return on an investment (Blau, 1964). These norms are considered the links
for indirect exchange. Blau also indicated that cost benefit might rely somewhat on
scarcity of that benefit. Blau stated that the rule of justice is a social norm that was
withheld by Homans. Blau is credited with looking at the theory from a microeconomic
lens, and was focused more heavily on the economic analysis side (Colquitt & Rodell,
2011; Emerson, 1976).
Emerson (1976) continued to expand on SET. Emerson looked at the work of
Homans, Blau, Thibaut, and Kelley and found similarities and differences. Within SET,
rules evolve over time. The participants involved in the exchange must abide by the rules
of exchange. The rules become the guidelines of exchange (Cropanzano & Mitchell,
2007). Emerson (1969) came up with productive exchange to explain group problem
solving, corporate groups, and division of labor. Another area that Emerson expanded
upon is the examination of relationships between exchanges and the connections made
that affect the network structure (Emerson, 1976). Homans, Thibaut, Kelley, Blau,
Emerson, Cropanzano, Mitchell, and many others have built the SET from the ground up.
The social exchange theory has grown in popularity, and is used to study workplace
behavior and employee engagement (Cropanzano & Mitchell, 2005; Slack et al., 2014).
Social exchange theory is a very useful theory for studying workplace behavior
and employee engagement (Cropanzano & Mitchell, 2005; Slack et al., 2014). Using SET
can help explore and explain relationships between individuals, and employee
engagement issues in the workplace (Andrew & Sofian, 2012; Lee et al., 2014: Slack, et
al., 2015). SET involves reciprocation among parties (Andrew & Sofian, 2012;
Cropanzano & Mitchell, 2005; & Gruman & Saks, 2011). When employees receive a
high level of social exchange, they will exhibit high levels of positive outcomes (Andrew
& Sofian, 2012; Buiter & Harris, 2013). Within the SET, relationships will grow and
develop. Loyalty and commitment will expand as long as certain unspoken rules are met
(Gruman & Saks, 2011; Lee et al., 2014). These unspoken rules include the
aforementioned reciprocity, which means that an employee will react to the actions of the
other employee or employer (Cropanzano & Mitchell, 2005; Gruman & Saks, 2011; Lee
et al., 2014). Employees are looking for the cost vs benefit when making decisions
(Andrew & Sofian, 2012; Lee et al., 2014). During an M&A, there may be varying levels
of communication and expectations. How employees perceive these changes will affect
the outcomes of their behaviors.
Good communication about an M&A is considered interactional fairness and is
well perceived by employees (Buiter & Harris, 2013). When employees think that they
are a good fit to the organization’s values they are more likely to be more engaged and
satisfied with their job (Memon et al., 2014). If an employee believes that the value of his
or her membership to the organization is high, they will show an increased commitment
to that organization (Slack et al., 2015). The resources that the employee receives will be
valued high or low by the employee, and they will base their level of engagement on that,
showing a reciprocal relationship (Andrew & Sofian, 2012). When an employee thinks
they are psychologically fulfilled they are going to show more engagement toward the
organization (Gruman & Saks, 2011).
Several theories have been used to discuss the human side of mergers: anxiety,
social identity, acculturation, role conflict, job characteristic, and organizational justice
theory (Marmenout, 2011). Social identity theory is a way to understand cultural
differences (Weber & Drori, 2011). When employees identify with an organization, they
are more likely to have less conflict, higher job satisfaction, and more motivation
(Joseph, 2014).
Social identity theory has been used to examine identity issues during an M&A
(Joseph, 2014). Positive organizational identity is essential for postmerger integration
(Joseph, 2014). Social categorization theory coincides with social identity theory. This
theory examines how people identify with themselves while being a part of something
larger such as a group. Social categorization is how the individual sees himself or herself
belonging (Rouzies, 2011). When an M&A occurs, the individuals have to reorganize
themselves into a new group. How someone identifies with the original organization,
opportunity perceptions, and sense of belongingness will influence the level of
identification (Rouzies, 2011).
Cording, Harrison, Hoskisson, and Jonsen (2014) discussed the stakeholder theory
and how it follows alongside M&As and employee satisfaction. Within the stakeholder
theory, what influences one stakeholder will influence other stakeholders. This theory
focuses on the immediate influence the employee has on the customer or other
stakeholders. Over and under-promising consumers and employees will lead to negative
consequences during an M&A. This has shown lowered productivity (Cording, Harrison,
Hoskisson, & Johnson, 2014). The lowered productivity will go on to affect the
stakeholders. There were many good options for theory choice. SET was the best fit for
this study. Within an M&A employees are undergoing several changes. How they are
alerted to these changes and believe they are treated during this time is a close fit to SET.
Mergers and Acquisitions
Leaders of organizations may pursue growth internally or externally. Internal
growth will take longer than external growth, as the organization must use their own
resources. One form of external growth is through M&As (Filho, 2014). M&A is a
general term used to define the joining of two organizations. Usually, a merger is the
combination of two organizations, which creates one new organizations, whereas an
acquisition is the joining of two organizations where no new organization is formed
(Marks & Mirvas, 2011). In some situations, a combination of the two is used to move
more quickly (Marks & Mirvas, 2011). The position within the structure of the deal will
determine who is the acquired or acquiring party (Marmenout, 2011).
Growth. M&As are a growing phenomenon in the business world (Mantere et al.,
2012; Marmenout, 2011). A consensus exists among researchers that M&As are on the
rise (Weber, Belkin, & Tarba, 2011; Weber & Drori, 2011). Lineen (2014) asserted that
hospital M&As doubled between 2009 and 2012. This dramatic increase in healthcare
M&As began around the time of Affordable Care Act implementation (Lineen, 2014;
McCue, Thompson, & Tae Hyun 2015). Some of the increase in healthcare M&As is
because of the higher level of reimbursement standards, as well as need for increased
efficiency (McCue et al., 2015). Filho (2014) asserted that the United States is the front
runner in healthcare M&As. Other countries such as Brazil are also beginning to follow
the healthcare M&A trend.
This faster rate of M&A occurrence puts more pressure on management and
employees (Weber & Fried, 2011). Mergers and acquisitions are one way organizations
gain market share, increase performance, and stay ahead of competition (Brueller,
Carmeli, & Drori, 2014; Buiter & Harris, 2013; Rogan & Sorenson, 2014). M&As are
also a leading strategy when an organization wants to compete globally. This technique
will increase market share and customer reach, and will help to attain goals quicker
(Lahiri & Narayanan, 2013; Marks & Mirvis, 2011; Vazirani & Mohapatra, 2012).
M&As are used to reduce the number of competitors (Rogan & Sorenson, 2014).
Healthcare M&As are also used for coordination of care, risk assumption, and best
practice implementation (Filho, 2014). Filho suggested that other reasons that healthcare
organizations merge are to increase market share, add new technologies, and expand into
other geographic areas.
Downfall. Even with this increase in occurrence, M&As have a high failure rate
(Gomes et al., 2012; Teerikangas, Very, & Pisano, 2011; Vasilaki, 2011). Researchers
have asserted that M&As have been found to negatively affect employee performance
and shareholders values (Rogan & Sorenson, 2014). Researchers (e.g., Lahiri &
Narayanan, 2013; Marks & Mirvis, 2011) agree that among the past 30 years of research
there is little improvement in the success rate of M&As. Many M&As fail, yet the main
reason why is yet to be found. Many of the previous findings on M&A failure have been
contradictory (Weber, Tarba, & Reichel, 2011). Researchers found that M&A execution
is an important part of failure or success (Marks & Mirvas, 2011).
During an M&A, complex problems and difficulties often arise (Brueller et al.,
2014). Many leaders do not properly prepare for the integration of cultures and processes
(Rogan & Sorenson, 2014). Merger syndrome is a factor that influences the failure of
M&As (Marks & Mirvas, 2011). Merger syndrome can produce worst case scenario
thinking and reduces productivity (Marks & Mirvas, 2011).
Researchers asserted that failure to integrate the two merging organizations
properly contributes to postmerger failure (Edwards & Edwards, 2013). Poor integration
increases staff turnover as well as lowers employee’s job performance (Edwards &
Edwards, 2013). Little research is available about the negotiation phase of the M&A
(Weber, Belkin, & Tarba, 2011).
Merger of equals means that both sides of the merger will receive equivalent
resources, responsibilities, and role sharing (Drori et al., 2011). Within a merger of
equals, distributive equality or integrative equality are typically expected. When both of
the merging parties are given identical tools, distributive equality is shown. However, if
one party is given more in one area and less in another, and the other party is vice versa,
integrative equality is shown (Drori et al., 2011). Leadership may have a difficult time
maintaining equality during a merger of equals, and this can cause harm to the M&A
(Drori et al., 2011).
Cultural differences is one area that can cause issues within a merger of equals
(Drori et al., 2011). During an M&A, equality can cause turmoil and become a liability
(Drori et al., 2011). Healthcare organizations should consider culture, brand, operations,
and physicians when merging. The merging of these particulars should be outlined prior
to consolidation
Change is becoming normal in the business world, and viewing the transitions
through the employee’s lens can be beneficial to an organization going through an M&A
(Buiter & Harris, 2013). Researchers suggested that more attention be given to the human
side of M&As (Marks & Mirvas, 2011). One in three people will experience an M&A as
an employee, so the influence is large. Many times, when M&As are focused primarily
on financials over any other component, there may be issues with underestimating
resources as well as additional integration issues (Marks & Mirvas, 2011).
M&As are known to create anxiety and stress among employees. This in turn
leads to a higher turnover rate, decreased employee commitment, and lowered employee
satisfaction (Buiter & Harris, 2013). Execution is a primary issue with M&As.
Researchers claimed that transition burnout negatively affects M&A success (Marks &
Mirvas, 2011). Burn out is found when prolonged stressors exist on the job. Transition
burnout causes emotional and physical exhaustion (Marks & Mirvas, 2011). Researchers
proposed that the integration process is a component of the M&A (Cording et al., 2014).
Integration
The reasons why M&As fail are still poorly understood, and it is suggested that
researchers should focus on premerger and postmerger variables together (Bauer &
Matzler, 2014; Stahl et al., 2013). Previous researchers have looked at premerger, or
postmerger, but few have put the entire process together to find the variables (Gomes et
al., 2013). Although a premerger is managed well, it does not mean that the postmerger
will be successful (Lundqvist, 2011). Other researchers theorize that pre- and
postintegration have equal importance (Gomes et al., 2013). Filho (2014) noted that three
out of five healthcare organizations do not integrate properly.
There is a growing interest in postmerger integration during the M&A process.
Some researchers argued that post integration is the most important part of the
integration, and should be the primary focus (Vasilaki, 2011; Weber & Fried, 2011).
Postmerger integration poses many challenges to leadership, as several organizational
changes occur simultaneously (Monin, Noorderhaven, Vaara, & Kroon, 2012). Some
researchers argued that postmerger integration and organizational integration are two of
the most important parts of the integration process (Lee et al., 2013).
Many researchers agreed that integration is a key to a successful M&A (Vancea,
2011). The degree of integration, depth and pace of integration, are found to influence the
success rate of M&As (Lee et al., 2013). When forming integration teams from both sides
of a merger, teams should be able to work together, and attention is paid to culture
clashes (Marks & Mirvas, 2011). Researchers have asserted that the value creation
happens postmerger, and is of the most value to strategy and finances (Vasilaki, 2011;
Weber & Fried, 2011).Within the postmerger process, varying degrees of integration
exist. Researchers have recommended studying mergers 3-7 years post completion to
arrive at the best understanding of the entire integration process (Vasilaki, 2011).
Employee
Much of the current M&A literature focuses on financials (Chen & Krauskopf,
2013). Financials are difficult to understand without factoring in the employees that work
there (Cho et al., 2014). Some researchers theorized that the employee factor accounts for
the main cause of M&A failure (Kemel & Shahid, 2012; Lundqvist, 2012; Marks &
Mirvis, 2011). The human side of mergers needs to be looked into more deeply, and the
employee studied more closely (Marmenout, 2011; Melkonian et al., 2011; Stahl et al.,
2013; Weber & Drori, 2011).
Vancea (2011) determined that during integration, employees, and culture are
important factors that determine an M&As success or failure. Employees play large roles
when a substantial change occurs such as an M&A, and can largely influence success or
failure of the M&A (Shin, Taylor, & Seo, 2012). M&As can have negative effects on
employees such as anxiety, increased stress, commitment, satisfaction, and identification
issues (Buiter & Harris, 2013; Melkonian et al., 2011).
Stress can present decision making issues, as well as ethical dilemmas (Selart &
Johansen, 2011). The stress from an M&A puts additional pressure and demands on
leadership and staff. Leaders may be faced with terminating employees during an M&A,
which also leads to an increased level of stress (Selart & Johansen, 2011). Researchers
have theorized that when the acquiring company has employee friendly practices, there
will be a reduction in transition resistance from employees (Ertugral, 2013). Employees
may also experience a sense of loss postmerger (Kemel & Shahid, 2012). This can cause
the employees to become psychologically disturbed, which leads to work inefficiency and
increased turnover. The first 100 days postmerger is when the employees will be the most
uncomfortable about job changes and eliminations (Kemel & Shahid, 2012).
Turnover. With M&As comes an increase in layoffs and turnover among employees,
which can negatively influence the integration process (Buiter & Harris, 2013; Melkonian
et al., 2011). Increased turnover among leadership is also seen postmerger (Krug, Wright,
& Kroll, 2014). During M&As, the top management is usually occupied by the acquiring
organization (Gombola & Marciukaityte, 2013). Organizations on average lose one
quarter of their leaders within the first year postmerger, and 60% within five years
postmerger (Krug et al., 2014). A couple of reasons that this occurs is to minimize
resistance, lower communication problems, and decrease uncertainty while establishing
control (Krug et al., 2014).
When a leader views the M&A as detrimental to their career, or a lowering of
their job status, the likelihood that they will depart the organization increases (Krug et al.,
2014). During an M&A leaders tend to worry about termination, loss of status and
decision making ability, as well as loss of autonomy (Krug et al., 2014). Higher
leadership turnover postmerger has a negative influence on the postmerger performance
of the organization (Krug et al., 2014). Cho, Lee, and Kim (2014) explained that it is
beneficial to retain leadership staff with higher tenure to increase M&A success.
Researchers noted that 25% of top employees leave an organization within 90 days
postmerger (Galpin, Whitington, & Maellaro, 2012).
Organizations that lose key staff during an M&A are less likely to realize M&A
success (Galpin et al., 2012). Many employees leave because of lack of communication
and uncertainty about the changes during an M&A. Others leave because of a loss of
autonomy and status (Galpin et al., 2012). Leaders should try to retain as many staff as
possible for a smooth knowledge transfer, as well as maintaining the health of the
organization (Lee et al., 2013; Marmenout, 2011). An increased level of turnover will
also consume a large quantity of resources and time (Krug et al., 2014). Employee’s
cooperation in an M&A is essential for M&A success as employees are valuable
resources (Melkonian et al., 2011). A perceived sincere integration can positively
influence employee turnover rates during an M&A (Lee et al., 2013). Committed
employees will reduce the risk of turnover (Ertugrul, 2013). Providing employees with
benefits, and allowing them to assist with decision making will decrease days missed and
increase employee commitment to the organization (Ertugrul, 2013).
Employees may experience a sense of loss and neglect postmerger (Rogan &
Sorenson, 2014). They may become psychologically disturbed, which leads to work
inefficiency and increased turnover (Rogan & Sorenson, 2014). Relative deprivation
occurs during postmerger integration when employees begin to experience the loss from
organizational change; loss can cause employees to become very sensitive (Lee et al.,
2013).
During an M&A employees become worried about losses they may encounter
such as lessened rewards and benefits, as well as job changes (Lee et al., 2013). The
employees will compare themselves to others, and believe that they are in a worse
position, which can turn into relative deprivation (Lee et al., 2013). Relative deprivation
leads to a lowered organizational commitment as well as lowered employee engagement
(Cho et al., 2014).
When leadership is open and communicates changes honestly with staff, relative
deprivation will decrease (Lee et al., 2013). Lee et al. (2013) explained that sincerity is a
primary component of postmerger integration and employee satisfaction. Relative
deprivation during M&As is directly related to turnover (Cho et al., 2014). If an
employee can identify with the merged organization, they are less likely to leave (Cho et
al., 2014).
Low employee morale during mergers can have a detrimental effect on
postmerger performance (Marmenout, 2011). Others believe that loss of autonomy
postmerger will have a negative influence on M&A performance (Weber, Belkin, &
Tarba, 2011). Yet some researchers noted that organizational justice is an important
component of postmerger success (Monin et al., 2013). Postmerger success must include
employee cooperation (Melkonian et al., 2011). Many factors may influence employee
behavior and performance postmerger.
Employee perceptions. Specifically, employee’s perceptions can influence
employee’s reactions during M&As (Marmenout, 2011). Collective rumination is an
example of this, and describes how some employees react during an M&A (Marmenout,
2011). During an M&A, employees are uncertain of the changes occurring and are
unaware of how to react. If the leadership is not giving proper guidance, and allowing
transparency, the employees will look elsewhere for support (Marmenout, 2011). When
employees are unsure of how to react, they look to their peers for their reactions
(Marmenout, 2011). Employees look to their peers for discussions, viewpoints, and
exchange of information. This process is peer interaction, and provides the employees
with a much needed social support system (Marmenout, 2011).
During an M&A, it is important for leaders to communicate upcoming changes
clearly and early in the process. Communication of expectations and goals is also
beneficial when trying to increase employee awareness during an M&A (Ertugrul, 2013).
Ertugrul (2013) indicated that leaders should not make promises to employees that they
cannot uphold, as this creates turmoil. Employees need their leaders’ support during times
of change and will look to them for guidance (Sharif & Scandura, 2014). Leading in an
ethical way is important when gaining trust of employees (Sharif & Scandura, 2014).
Employees tend to focus on what their outcomes will be, compared to the
outcomes of those around them (Lee et al., 2013). When there is a substantial change
such as an M&A, and employees are experiencing stress and other negative emotions,
those emotions can spread to others rapidly (Marmenout, 2011). This rapid transfer of
emotion is usually negative.
Organizational justice also plays an important role in postmerger integration. To
perceive justice, employees would like to believe that there is equality and not a
dominating organization (Monin et al., 2012). To reduce confusion and increase the
perception of organizational justice, employees should be made aware of changes that
will be taking place postmerger (Monin et al., 2012). Distributive justice plays an
important role in M&As. When important resources are distributed among parties,
employees involved want to ensure the fairness of distribution (Monin et al., 2012).
Psychological/emotional influence. Peer interaction can create a sense of
psychological safety for employees. This sense of psychological safety can also be false.
There is a limited amount of information that gets passed around within the peer group.
This limited amount of information leads group members to create their own conclusions,
thus the creation of rumors appear (Marmenout, 2011). This confusion can create
dysfunction and conflict among groups (Marmenout, 2011). When an M&A is announced
to employees, they will discuss this change with their peers. If the employees have not
been previously made aware of the changes, this exchange will present increased feelings
of negativity than before the peer discussions (Marmenout, 2011).
During an M&A, many rapid changes are occurring and relative deprivation can
occur. Staff may be worried about the consequences of change (Lee et al., 2013).
Employee reactions evolve over time. The human side of mergers has been researched
with three perspectives; psychological, social, and cultural (Marmenout, 2011). The
psychological perspective looks at the individual employee and how they are affected by
the M&A in areas of stress, coping, and commitment. The social perspective looks at the
group and the effect of status, and group dynamics. The cultural perspective looks at the
entire organization and looks at culture clashes (Marmenout, 2011). Employees play a
strong role in an M&A and are an important consideration to make during M&As
(Melkonian et al., 2011).
For leadership to create a positive change regarding collective rumination and
peer interaction, leadership should stay focused. There is no way to completely avoid
these trouble areas; however, positive influence is possible (Marmenout, 2011). Working
with staff on possible solutions to problems can create a sense of control for the
employees; this method creates positive psychological outcomes and empowerment for
employees (Marmenout, 2011). When leadership has yet to determine the upcoming
changes, but collective rumination is occurring they can create a distraction. The
distraction may be focus on a different area, employee development, or physical exercise
programs. This distraction takes away focus from the upcoming changes (Marmenout,
2011). A third option for leadership is open and transparent communication (Marmenout,
2011). Marmenout explained that transparent communication helps to diffuse rumors
caused by collective rumination as well as increasing trust.
Trust. Organizational authenticity is beneficial when performing postmerger
integration (Cording et al., 2014). Leadership should not over or under promise
employees during an M&A. Over and under promising will only decrease organizational
authenticity (Cording et al., 2014). Employee trust is also a critical part of postmerger
integration. When an M&A occurs, an amount of uncertainty exists among employees.
They experience vulnerability. The trust that they once had can become impaired. This
mistrust leads to decreased job satisfaction and increased turnover rates postmerger
(Cording et al., 2014). When employees believe that an M&A is fair they will be more
willing to cooperate and commit (Drori et al., 2011). If there is proof of distributive and
procedural justice the employees will be more engaged based on fairness and equality
(Drori et al., 2011). However, during M&As distributive justice is not sustainable as
many postmerger dynamics are involved (Drori et al., 2011).
Researchers indicated that M&As failure may be caused from human uncertainty
issues (Rouzies, 2011). Lack of commitment to the integration process may come from
psychological attachment issues. Employees may also have feelings of uncertainty and
identity threat (Rouzies, 2011). Belonging to the larger organization may create
identification with the merger, however belonging to the larger organization was only
found to be important at the beginning of a merger. Later in the merger, interaction
intensity is of higher importance (Rouzies, 2011). Researchers recommended that
managers spend time communicating teamwork and goals to staff to develop a sense of
belonging (Rouzies, 2011).
Employee Engagement
Employee engagement is how emotionally connected and invested employees are
toward the organization and their goals (Mishra, Boynton, & Mishra, 2014; Serrano &
Reichard, 2011). The amount of dedication and motivation employees have toward their
job is also a part of employee engagement (Bakker, 2014). Bakker theorized that vigor,
dedication, and absorption are critical components of employee engagement. When
employees show vigor, they are excited about their job and want to be at work, as their
job has meaning for them (Bakker, 2014). Employees experiencing absorption will
concentrate well, whereas dedication encompasses a general attitude about the employees
job (Bakker, 2014).
Employees enjoy working in positive environments. Lack of engagement is
common among employees and has become an important research topic (Serrano &
Reichard, 2011). Engaged employees are critical to the success of an M&A (Galpin,
Whittington, & Maellaro, 2012). Employee engagement is directly connected to financial
success or failure of the M&A (Galpin et al., 2012). Researchers asserted that engaged
employees are considered a competitive advantage to the organization they are employed
(Galpin et al., 2012).
During an M&A, disengaged employees will have decreased productivity, safety,
and provide decreased customer service (Galpin et al., 2012). Researchers have
discovered that only one quarter of U.S. employees are engaged in their jobs, and this
lack of engagement has a financial influence on companies to the tune of $250- $350
billion dollars a year (Serrano & Reichard, 2011). Serrano and Reichard summarized
Schaufeli’s revision of Mashlach’s approach to employee engagement. The three
components described to employee engagement were vigor, absorption, and dedication
(Serrano & Reichard, 2011). Vigor represents the employee’s dedication to continue
working on projects even when challenges are present. Absorption is when the employee
is fully engrossed in what they are doing and lose concept of time, and is considered the
optimal experience. Dedication relates to the inspiration and pride an engaged employee
experiences (Serrano & Reichard, 2011).
Loyalty and productivity increase when employees are engaged (Serrano &
Reichard, 2011). Employee engagement creates increased performance, job satisfaction
& commitment, a sense of well-being, and increased profitability (Serrano & Reichard,
2011). When employees are engaged, the customers also have an increased level of
satisfaction and loyalty (Serrano & Reichard, 2011). Researchers discovered that when
employees are engaged, the company incurred five times less safety risks (Serrano &
Reichard, 2011).
There are not only benefits to the organization when employees are engaged, but
also to the employees themselves. Researchers suggested that engaged employees have
health benefits and a sense of satisfaction (Serrano & Reichard, 2011). Keeping
employees engaged, and reengaging them during the M&A process will increase job
satisfaction and decrease turnover rates (Galpin et al., 2012)
Leader influence. Engaged employees are more likely to remain loyal, speak in a
positive manner about the organization, and be high performers (Mishra et al., 2014).
Leadership is a very important factor when considering employee engagement (Serrano
& Reichard, 2011). Leaders can influence employees in various ways. Effective leaders
are able to create a satisfied and engaged workplace as well as organizational structure
(Nieberding, 2014).
Front line supervisors have a large influence on employee engagement. When the
front line supervisor gives a high level of support to their employees, the employees are
more engaged (Mishra et al., 2014). Open communication from supervisors that is
consistent creates a higher level of employee engagement (Mishra et al., 2014).
Information sharing and radical transparency between leadership and subordinates makes
the employee feel as though they belong and trust (Mishra et al., 2014). Engaged
employees are known to create positive relationships internally as well as externally
(Mishra et al., 2014).
Increased employee engagement has been found when leaders offer autonomy,
rewards, and promote thinking outside of the box (Serrano & Reichard, 2011).
Centralization, decentralization, chain of command, and specializations are areas leaders
should focus on to create a more engaged workforce (Nieberding, 2014). A
transformational leadership style has also been found to be the most effective when vying
for optimistic employees (Serrano & Reichard, 2011).
Increasing engagement. For employees to experience engagement, the
environment must be created by the leadership. When work is motivating and
meaningful, employees tend to become more engaged. Motivating and meaningful work
can be found by creating a vision for employees to follow and become motivated by. The
vision should be very clear so that the vision is easily understood (Serrano & Reichard,
2011).
Work should be altered so that the employees view it as worthwhile and
meaningful. The employees will want to work harder because they know they are valued
and are working toward the betterment of the organization (Serrano & Reichard, 2011).
Increasing resources and job redesign are other ways to increase employee engagement
(Serrano & Reichard, 2011). Researchers (e.g., Bakker, 2014) suggested that providing
employees with the correct resources is the most important part of increasing employee
engagement.
Leadership should ensure that the proper people are in the right jobs. Giving
employees explanations of their roles with clear expectations and rewards for work done
increases engagement (Serrano & Reichard, 2011). Consistent feedback, coaching,
autonomy, and access to information are also essential tools for increased employee
engagement (Bakker, 2014; Serrano & Reichard, 2011). Employee coaching is most
effective when the coaching is specific to each employee’s needs. Researchers
determined that proper coaching could lead to increased skills and engagement (Serrano
& Reichard, 2011).
Feedback in the form of formal reviews, as well as informal discussions are the
recommendation of researchers (Serrano & Reichard, 2011). This method increases job
clarity, goals, and increased engagement (Serrano & Reichard, 2011). Another important
aspect of employee engagement is recognition. Leadership should provide a clear path to
reward and recognition. Recognition supports positive behavior and shows appreciation
for work done (Serrano & Reichard, 2011). This also allows other employees to see what
behavior leadership is looking for (Serrano & Reichard, 2011). Allowing employees to
participate in applicable decision making also leads to increased employee engagement
(Serrano & Reichard, 2011). Researchers asserted that employee engagement spreads
among teams (Serrano & Reichard, 2011).
Employee Satisfaction
M&As are known to affect employee satisfaction, commitment, and identification
(Buiter & Harris, 2013). Employee satisfaction is the level of enjoyment and satisfaction
an employee has within their job (Marmenout, 2011). To increase satisfaction and
alleviate anxiety, the employees must have positive merger perceptions (Buiter & Harris,
2013). Conflict within groups may pose a challenge to employee satisfaction, and may
also create a lowered performance (Marmenout, 2011). When considering an M&A, the
two involved organizations should have a detailed plan for their operations strategy and
appoint an integration team to ensure the plan is followed. This will give the employees
clarity of expectations and timelines of when events will occur (Marks & Mirvas, 2011).
Stress. There is much employee uncertainty and anxiety postmerger (Buiter &
Harris, 2013). Researchers reported that increased workplace stress leads to a reduction in
job performance as well as physical ailments (Spurgeon, Mazelan, & Barwell, 2012).
Lack of concentration, depression, anxiety, and insomnia are a few of the psychological
stress symptoms (Spurgeon et al., 2012). Fifteen percent of occupational health claims in
the United States are linked to stress at work, and stress related absences are estimated at
60% of all employee absences (Spurgeon et al., 2012).
When leadership shows transparency and a higher level of interaction with
employees during an M&A the employees will have reduced uncertainty levels, which
creates satisfaction, and higher levels of performance (Buiter & Harris, 2013). M&As are
difficult to implement, and important to remember not to alienate the employees involved
(Schilling, Werr, Gand, & Sardas, 2012). Employees have a heightened sense of
vulnerability during an M&A. They pay additional attention to given cues. Their
reactions to these cues may decrease their own satisfaction, but also decrease how
customers and other stakeholders are treated (Cording et al., 2014). Employees involved
with changes are more satisfied. Inviting the employees to meetings where change is
discussed, and allowing them to have a voice creates satisfaction (Sharif & Scandura,
2014).
Many M&As will require some restructuring of positions to create the highest
level of efficiency, this can be stressful for employees (Clarke & Salleh, 2011). Advance
communication of restructuring changes is important to create trust. If employees view
new job structures and appointment of new positions as unfair, they will be dissatisfied
and deal with a loss of organizational identity (Clarke & Salleh, 2011). Explanations of
hiring processes for new positions will help to eradicate confusion on hiring standards.
Employees may feel as if they were demoted, or were treated unfairly after position
changes occur (Clarke & Salleh, 2011). If employees suspect that bias was shown during
the restructuring process they harbor resentment and other negative emotions (Clarke &
Salleh, 2011).
When faced with large organizational changes employee’s perceptions of justice
will influence their level of cooperation (Melkonian et al., 2011); however, those
employees who receive promotions, view their position as improved, or believe they have
received fair treatment, will have higher levels of job satisfaction (Clarke & Salleh, 2011;
Melkonian et al., 2011). When a larger and smaller organization are merging, researchers
have found that the larger organization is favored (Clarke & Salleh, 2011). This merger
creates a sense of bias among members of the smaller organization, which in turn creates
resentment and dissatisfaction among employees (Clarke & Salleh, 2011).
Researchers reported that employees from the acquiring company often times
cooperate better than employees from the acquired company (Melkonian et al., 2011;
Rouzies, 2011). Authentic work is work that employees can identify with, and believe
that they are well aligned with their duties, and are able to use their strengths (Kira,
Balkin, & San, 2012). When employees are experiencing authentic work they experience
a higher level of satisfaction as well has higher performance levels (Kira et al., 2012).
When a substantial organizational change occurs, such as an M&A this change can cause
a disruption in the authentic work style. The M&A can create inauthenticity by bringing
about confusion and uncertainty in relation to future job duties and roles (Kira et al.,
2012). Satisfied employees are more likely to continue working for the new firm.
Satisfied employees will work harder for the organization and show increased
productivity (Ertugrul, 2013). Researchers indicated that recognition, promotions, pay,
and job security increase satisfaction (Ertugrul, 2013).
Organizational Culture
M&As often have low performance and is usually attributed to issues involving
employees such as low morale, turnover, or culture clashes (Marmenout, 2011).
Researchers used the cultural perspective to study the organization as a whole, and found
culture clashes to be the main reason for decreased performance in M&As (Clark &
Salleh, 2011). When two organizations merge, there is merging of finances and resources
to consider, also the merging of different organizational cultures (Clarke & Salleh, 2011).
The combining of two organizational cultures is an essential part of an M&A
(Marmenout, 2011). Differing work practice should be considered, as well as many new
relationships between staff that can be stressful on employees (Clarke & Salleh, 2011).
Culture clash potential can be assessed in advance to determine the degree of differing
cultures (Marmenout, 2011). When there is a good cultural fit postmerger, there will be
less resistance to the changes within the M&A (Bauer & Matzler, 2014). Collecting data
3-4 years postmerger allows the researcher a better understanding of the time over which
cultural integration occurs (Drori et al., 2011).
A large reason that M&As fail is poor cultural integration (Drori et al., 2011;
Marmenout, 2011). Corporate culture is the shared beliefs and values among the members
of an organization (Clarke & Salleh, 2011). Researchers found that organizations that
focus on merging of cultures have a higher success rate (Zuckerman & Golden, 2015).
During an M&A, changes will most likely occur in corporate culture, which usually
occurs on the acquired side. Company culture becomes neglected when merging, and
creates resistance and increases the chances of failure (Marmenout, 2011).
Leadership is usually focused on timelines and finances during an M&A whereas
they should keep focused on merging the cultures of the two organizations (Zuckerman &
Golden, 2015). When there is a lack of renewed corporate culture, there will be a lack of
synergy within; this creates issues for postmerger integration (Chatzkel & Ng, 2013).
When two organizations merge, their cultures also merge (Gombola & Marciukaityte,
2013). Integration is essential for a successful M&A to take place (Zuckerman & Golden,
2015). The merging party that is more dominant can be threatening to the less dominant
merging party (Drori et al., 2011).
Leadership must be committed in both organizations participating in the M&A for
cultures to merge. The leadership on the side of the less dominant party can become
conflicted when leadership from the dominant side is making the decisions, which can
create a sense of inequality (Drori et al., 2011). When the leaders think that they are not
treated fairly this creates conflict and decreased cooperation, which in turn passes on to
the employees (Drori et al., 2011). Leadership must learn to resolve culture clashes
promptly during an M&A to motivate and guide employees in a positive direction (Drori
et al., 2011). Leaders should create a culture that is integrated and maintain cultural
equality (Drori et al., 2011). Maintaining premerger identities, acculturation, cultural
awareness, and synergy will assist with merging cultures postmerger (Drori et al., 2011).
Post M&A organizational cultural change is traumatic for employees and can cause
resistance to cultural change. Communication is an essential part of developing a new
culture of change (Erturgal, 2013). Development of an acculturation program may be
beneficial when firms are merging to gain trust (Clarke & Salleh, 2011). A culture of trust
is important for organizations dealing with change (Serrano & Reichard, 2011).
Implementation of training programs covering best practices for communication styles is
also important.
Leaders should focus on building a culture for work, and their teams, instead of
changing to one that already exists for an existing entity (Lundqvist, 2011). Horizontal
mergers in particular create challenges among corporate culture. Employees can lose their
organizational identification and experience powerless during this time (Clarke & Salleh,
2011). Employees have an easier time identifying with an organization that mirrors the
corporate culture they are used to (Drori et al., 2011). Cultural incompatibility occurs
when both cultures disintegrate and a new culture created. This new culture creates a lack
of cultural identification as well as stress, and lack of psychological attachment (Clarke &
Salleh, 2011; Drori et al., 2011). This lack of psychological attachment creates a lowered
organizational trust, lowered commitment, as well as lowered job satisfaction (Clarke &
Salleh, 2011).
Leadership
Leadership is fundamental to post integration success (Vasilaki, 2011).
Researchers agree that poor leadership leads to less value (Vasilaki, 2011; Teerikangas et
al., 2011). During an M&A leadership roles are quite important (Hahm & Jung, 2013).
During an M&A there is a large amount of instability and pressures internally as well as
externally (Hahm & Jung, 2013). When an organization is experiencing stress or
turbulence, researchers recommend a strong, charismatic leader (Hahm & Jung, 2013).
In most M&As there is no value created because of poor leadership during
implementation (Vasilaki, 2011). An integration manager can affect the success or failure
of an M&A, and can influence the value created and leaked (Terrikangas et al., 2011).
M&As are known as large organizational changes which create varied emotions among
staff (Clarke & Salleh, 2011). Organizational change influences the employees, as well as
affects leadership. Leaders can also experience feelings of anger, fear, loss, stress, and
powerlessness during an M&A (Clarke & Salleh, 2011).
Some researchers indicated that leadership style and trust are important
components of M&A success or failure (Stahl, Larson, Kremershof, & Sitkin, 2011).
Organizational leadership and communication are important factors when considering an
M&A (Buiter &Harris, 2013). Perceived sincere integration can positively affect the
employee turnover rate during an M&A and increase trust. When employees have lower
levels of trust in management this can negatively, influence the sincere integration
attempts (Lee et al., 2013).
When moving forward with an M&A, leadership is important (Buiter & Harris,
2013). A need exists to be transparent, open and honest, and reward good behavior.
Employees need the necessary tools for success (Bernstein, 2012; Buiter & Harris, 2013).
When employees are uncertain about what is going on this uncertainty can cause
additional stress. If leadership is open and honest about the upcoming changes, and
exhibits consistent communication, the employee is at ease. This leadership openness
goes back to the social exchange theory, and how the feeling of reciprocity is important to
employees. When the employees believe that the leader is treating them properly, they
will increase their performance (Buiter & Harris, 2013). Fairness is also important for
employees. When an employee believes he or she is treated fairly, through
communication and other avenues, the employee will work harder (Buiter & Harris,
2013). During an M&A there is stress and turbulence, employees expect additional
commitment, trust, vision communication, and expertise during this time (Hahn & Jung,
2013).
Communication
Communication is an important part of an M&A. Communication must be
proactive (Mishra et al., 2014). Leadership should have a clear vision and communicate
that vision across the organization (Buiter & Harris, 2013). Lack of communication can
create a negative influence on employee effectiveness (Kemel & Shahid, 2012).
When employees are unsure of what is happening, they will create their own idea
of what is happening and share that opinion with others, which is often far from the truth.
Researchers recommended a formal communication process for organizations going
through an M&A (Ertugral, 2013). First lines of communication should occur early in the
M&A process so that everyone is informed of what is going on. Researchers found
increased communication, creating trust, removing unpredictability, reducing stress, and
increasing morale can all lead to better success during an M&A (Kemel & Shahid, 2012).
Internal communication increases productivity and positivity among staff (Mishra et al.,
2014). It also creates trust and increases commitment between leadership and staff
(Mishra et al., 2014). Internal communication provides employees with the proper
information needed to perform and complete their job duties (Mishra et al., 2014).
Especially in a turbulent or changing environment, internal communication is an essential
part of relationship building between leadership and staff (Mishra et al., 2014). Face-
toface communication is the most credible style of communicating about an upcoming
M&A as the communicators hear verbal cues, but also see visual cues (Galpin et al.,
2012; Mishra et al., 2014).
Providing frequent effective communication after the merger announcement, in
person, electronically, or in print provides transparency to employees and creates trust
(Galpin, 2012). Researchers also recommend informing employees of when they can
expect to receive additional communication on the M&A (Galpin, 2012). Providing
regular updates on performance, and giving constructive feedback will create an
increased sense of belonging to the merged organization postmerger (Galpin et al., 2012).
Communication slows among the newly formed teams postmerger, especially when
merged organizations are in different cities (Alatta & Sing, 2011). Communication
among teams peaks 2 years postmerger (Alatta & Sing, 2011).
Staff communication is important when trying to decrease anxiety and increase
involvement. Leaders should expect resistance with an M&A (Lundqvist, 2011).
Multiple forms of resistance exist, such as productivity and performance issues,
attendance issues, turnover, health problems, and issue with authority (Lundqvist, 2011).
Management should be open and honest with their staff to gain trust (Lundqvist, 2011).
M&As usually produce employee uncertainty, and the details of the merger are
sometimes withheld from employees which creates confusion. The level of uncertainty
from employees will be a large issue during any M&A. Communication must be clear
and consistent to lower the level of uncertainty (Buiter & Harris, 2013). Researchers
recommended that communication be immediate, consistent, and truthful to alleviate
stress and increase trustworthiness (Buiter & Harris, 2013). When there is a high level of
communication from leadership, employees will have increased satisfaction (Buiter &
Harris, 2013). This good communication will also help to merge the organizational
culture of the two organizations (Buiter & Harris, 2013). The acculturation system can be
through good communication with employees. It may also be useful for leaders to
acknowledge the stress placed on employees for validation (Buiter & Harris, 2013).
Researchers (Mishra et al., 2014) found that positive work environments usually have
good and open communication. Employees who trust their organization agree that there is
open and honest internal communication. Internal communication is the communication
from leadership to employees, and can increase trust and employee engagement (Mishra
et al., 2014). Positive internal communication leads to superior customer service (e.g.,
Mishra et al., 2014).
Transition and Summary
Section 1 of this study included the background of the study related to the problem
statement, purpose statement, nature of the study, and research question. I also described
the conceptual framework, definitions of terms, and the assumptions, limitations, and
delimitations. This section also included a discussion of the significance of the study, and
a literature review.
The focus of the study is to discover what factors may influence the satisfaction
and employee engagement levels of employees working in the healthcare field,
postmerger. The literature review included discussion on the history of the social
exchange theory as well as research implying how the social exchange theory may relate
to changes among employees postmerger. The remainder of the literature review was
about the (a) mergers and acquisitions, (b) employee, (c) employee engagement, (d)
employee satisfaction, (e) organizational culture, (f) leadership, and (g) communication.
In Section 2, I presented the study project and method. There is discussion
regarding the researcher and participant, as well as detailed information on the chosen
method and design. Population and sampling is in Section 2 along with discussion on
ethical research. Data collection technique and analysis are also be included in the
section. In Section 3, I described the results and implications. Section 3 includes an
introduction that includes the purpose statement. Followed by qualitative presentation of
findings, application to professional practice, implications for social change,
recommendations for action, and recommendations for future research, reflections,
conclusion, and appendices.
Section 2: The Project
Section 2 of this study includes the purpose of the project, role of the researcher,
participant information, and detailed description of the selected research method and
design. In this section, I also discuss the details of the qualitative population and
sampling and ethical research, as well as qualitative data collection instruments, the data
collection technique, and the method qualitative data analysis that I used in this study. In
this section, I also address confirmability and replicability.
Purpose Statement
The purpose of this qualitative, descriptive case study was to explore postmerger
strategies that healthcare business leaders use to influence the engagement and
satisfaction of employees. The target population was comprised of employees at one
medical facility in the North Central region of the United States who were employed with
the organization prior to and postmerger. The implications for positive social change
include the potential to assist healthcare leaders with employee engagement and increased
satisfaction in future M&As.
Role of the Researcher
The role of the researcher is to conduct quality research and protect the
participants (Yin, 2014). The researcher of an effective case study should possess the
ability to ask appropriate questions. The researcher should also have a firm grasp on the
research, listen to the participants, adapt to a changing environment, and avoid biases
(Yin, 2014).
I served as the primary data collector in this study. I collected data in an honest
manner to reduce bias (e.g., Yin, 2014). I have worked in healthcare since 2011 as a
clinical informatics applications analyst for the revenue cycle and later transitioned to the
role of IT applications analyst where I was employed during data collection. While in this
role, I have witnessed and participated in the M&A of multiple sites. I conducted research
and data collection at a healthcare facility where I was not employed. I did not know any
of the interviewees, nor have I had any previous contact with them.
According to the Belmont Report, participants must be treated with respect, as
well as shown justice and beneficence (The Belmont Report, 1979). Risk must be
minimized, participation in the study be voluntary, and participant identification be kept
confidential. I followed the protocols set forth by the Belmont Report when conducting
my research.
The reason I chose to do a qualitative study was to find out what factors may
influence employee engagement and satisfaction postmerger in a healthcare organization.
Although I have been personally involved with M&As, I approached this study with an
openness to what I may uncover to decrease bias from a personal lens. A researcher
should not be opposed to a finding that they did not expect (Yin, 2014).
Creating and adhering to an interview protocol will ensure a researcher follows
the same procedures for each interviewee. Interview protocols guide a researcher through
the interview process (Jacob & Furgerson, 2012). The protocol for this study’s interview
(see Appendix A) included preinterview dialog, interview questions, concluding remarks,
and prompts during the interview. The same protocol was used for each interview
participant.
Participants
The participants for this study were employees working in the selected healthcare
facility in the North Central United States. The facility originally opened in 1921, and is
equipped to care for 60 patients. They employ approximately 100 staff of healthcare
workers and other employees. The facility’s director approved the interviewing of their
employees and the data collection process, and returned a Letter of Cooperation. The
participants were selected through purposeful sampling. To begin the purposeful
sampling process, the director sent out an e-mail to staff that included information about
the study, selection criteria, and incentive information. In the e-mail send out by the
director, I asked interested parties to respond, by e-mail, directly to me by a specified date
with their phone number, job title, department, and years of service, if they were
interested in participating.
When I received the e-mails from the potential participants, I selected the most
appropriate participants for the study. This decision was on the following: Four of the
interview participants were in leadership roles (director and above) where they were
involved in strategy creation, employed at the facility prior to, and after the M&A. The
other four interview participants were employed in nonleadership roles and were
employed at the facility prior to and after the M&A, where they would have witnessed the
implementation of strategies during the merger. The interviewees were with the
organization at the time of interview. If more than eight staff members had been
interested in participating, I would have chosen participants based on department
employed. For example, I did not want to study eight participants who worked in the
same department.
The recommendation on number of interview participants for qualitative studies is
5-20 (Dworkin, 2012). The goal is to reach saturation. Saturation is reached when there
are no longer any new themes or ideas emerging, and a researcher has enough
information to recreate the study (Dworkin, 2012). The participants aligned with the
research question of what strategies leaders will use in future M&As regarding employee
morale, engagement, and satisfaction. I gained saturation by continuing interviews until
no new information was found to further the study. When the participants were not
adding new details, but rather indicating what previous participants said, that showed that
saturation had been reached.
I followed Walden University’s IRB process. After getting an approved proposal
from my committee, Walden IRB approval, and signed permission from the facility, I
worked with the Director to determine the pool of participants for purposeful selection as
explained above. Once participants were selected, I e-mailed them the informed consent
form (see Appendix B). Informed consent is important so that the participants understand
what the research process consists of, as well as what their rights are
(AluwihareSamaranayake, 2012). Once the informed consent forms e-mailed, I called the
participants and discussed appropriate times to meet, reviewed the informed consent
form, purpose of the study, and conducted research.
Researchers should try to create and maintain relationships with their participants
(Swauger, 2011). I made my participants comfortable and let them choose if they want to
participate in the study. I also gave them the opportunity to leave the study if they ever
were uncomfortable. No participants chose to decline participation or withdraw during
the study. This information is outlined in the informed consent agreement. An ethics of
care should be practiced with open communication and an equalization of power
(Swauger, 2011). I let the participants know verbally what to expect every step of the
way and let them know that communication is open.
Research Method and Design
I used a qualitative descriptive case study approach to determine what factors
affect employee engagement, satisfaction, and morale postmerger in a healthcare
organization. In the following sections, I describe why a qualitative method and
descriptive case study design were chosen compared to other methods and designs.
Method
In this study, I used a qualitative research method. The three most common
research methods are qualitative, quantitative, and mixed methods. Qualitative research
captures the subjects in their own setting and is flexible (Dworkin, 2012). Qualitative
research also allows the researcher to review the participant’s perceptions and
experiences (Yin, 2014). Qualitative research allows a researcher to gain insight into the
views of the participants and what they have experienced (Thyer, 2012). Qualitative
research also allows a researcher to understand the participant’s reactions to change, and
how they respond to certain actions (Thyer, 2012).
Two of the most widely used techniques in qualitative research are interviews and
focus groups (Coenen, Stamm, Stucki, & Cieza, 2012). For this study, I conducted
interviews of leadership and nonleadership healthcare employees. How and why questions
are typically asked when doing qualitative research (Yin, 2014). These how and why
questions allowed me to collect data from the participant’s viewpoint.
Quantitative researchers use surveys, random sampling, and statistics to test
theories and hypotheses. Testing is done to examine the relationships between variables
chosen by the researcher (Hoare & Hoe, 2013). I did not want to be testing hypotheses or
choosing variables that I determine may be appropriate. Instead, I learned from the
participants who have gone through the change. Unlike the how questions asked in
qualitative research, quantitative research asks how many or what (Hoare & Hoe, 2013).
Mixed methods researchers use a combination of elements from qualitative and
quantitative models to achieve results (Hayes, 2013). They use a combination of
numerical and subjective data (Hayes, 2013). A mixed method study is used to validate
research with two different viewpoints (Luyt, 2012). This type of study is used when
working with a large number of participants (Luyt, 2012). I interviewed eight
participants, so this type of study was not a good fit. Qualitative and quantitative
researchers analyze different data; the mixed methods research style brings them both
together to become complimentary (Luyt, 2012). The mixed method methodology can be
used when qualitative or quantitative approaches are not sufficient on their own (Hayes,
2013). For this study, the qualitative research method was sufficient, and therefore a
mixed methods study was not chosen.
Research Design
Specifically, I used a descriptive, single case study research design. Case studies
are best used when how or why questions are asked (Yin, 2014). The Institutional Review
Board (IRB) describes any study that is not experimental as descriptive (IRB, 1993). Case
studies can be explanatory, exploratory, or descriptive (Yin, 2014). I did not manipulate
any data; the exploratory style was not a good fit. The descriptive case study can be used
to describe a phenomenon in the context that it occurred (Baxter & Jack, 2008). It is
important to focus on a real-world case when using the case study design (Yin, 2014).
Case studies are for studies related to business so the researcher is able to become close to
the daily practices of the participants (Moll, 2012). Following the design
recommendations of scholars like Yin and Moll, I used a single case study, as I studied
one healthcare organization that had gone through an M&A, and all employees
interviewed had experienced the same event. In addition, the documents and materials
that I selected, for triangulation, helped me to also understand the ideas, policies, and
content that the company put forth to employees regarding the new company and new
leadership.
Other common research designs often used with a qualitative method are
phenomenological and ethnographic. Boddy (2011) stated that ethnographic research is
popular with marketing. Ethnographic researchers are able to obtain detailed observations
of the subjects on a daily basis in their natural settings (Boddy, 2011). Observations are
compiled over an extended period when collecting ethnographic research data (Boddy,
2011).
According to Evans (2012), narrative interviewing takes place with many
openended discussions. I did not observe individuals in their working environment as the
M&A has already occurred. Narrative interviewing was not appropriate for my study. A
phenomenological design looks for patterns and relationships among the group that is
studied (Reiter, Stewart, & Bruce, 2011). The goal of the phenomenological design is to
describe a phenomenon based on participant perspectives (Cassidy, Reynolds, Naylor, &
De Souza, 2011). I did not research a phenomenon and therefore a phenomenological
design was not the appropriate choice.
Population and Sampling
The population for this study included members of leadership and nonleadership
staff who were employed by a healthcare organization in the North Central United States.
Participant selection was not based on race, sex, age, or variables other than position title
and dates of employment. To be selected for the study, the employees must have been
employed by the organization prior to the merger as well as postmerger. Participations
had to be employed by the organization at the time of interview. The leaders were
selected specifically because they were in organizational positions where they were likely
involved in strategy creation during the merger. They were in positions of decision
making and authority where their strategies would have been implemented or they would
have been responsible for implementing strategies with their employees. Nonleaders
were selected because they were workers who would have been the recipients of
strategies implemented during the time of the merger.
Four leadership staff and four nonleadership staff were interviewed, face-to-face,
and saturation was reached. Face-to-face interviews are used in qualitative research
because you are able to establish rapport and see body language (Draper & Swift, 2011).
To qualify as leadership, the employee must have the title of supervisor, manager, or
director. The semistructured interviews took place at the facility in private meeting rooms
so that the participant did not have to travel. The environment was comfortable and
nonthreatening to the participant. The interviews were held at the convenience of the
participant and were scheduled for one hour in length.
The sample size of eight (roughly four in each grouping) is sufficient. Dworkin
(2012) stated that the recommended number of interview participants for a qualitative
study is 5-20, with a goal of saturation. Saturation is reached when new themes or ideas
are no longer emerging, and you have enough information to recreate the study (Dworkin,
2012). The number of interview participants is smaller in qualitative studies compared to
quantitative studies because you may also gain information via existing documents,
observations, and interviews (Yin, 2014).
In this study, I selected participants based on purposeful sampling. Purposeful
sampling for this study began with an e-mail sent by the facility’s Director to their
employees explaining the study and interview process. If the employees were interested
in participating, they responded to me via e-mail by the date specified. Once the specified
date arrived, e-mails were reviewed, and the participants chosen based on suitability for
this study. Four of the interview participants were employed in leadership roles and the
other four interview participants were employed in nonleadership roles. All participants
were employed at the facility prior to and after the M&A.
Obtaining a sample that is representative of the population studied is important
(Draper & Swift, 2011). Draper and Swift (2011) explained that purposive sampling is
best when researchers purposefully chose participants based on their knowledge and use
to the study. The participants for this study were based on their experience of an event
and exhibit purposeful sampling (Draper & Swift, 2011). Snowball sampling is also used
in qualitative research, but was not appropriate for this study. Snowball sampling occurs
by chance (Draper & Swift, 2011). With this method, a researcher asks one person to
participate and has them give a referral to another participant, and the cycle continues.
For this study, I needed to study a particular group so purposive sampling was the best
approach.
Ethical Research
For the ethical protection of participants, researchers must gain IRB approval prior
to data collection. For this study, I did not gain IRB approval from the interview site, as
they do not have an IRB department. When I received permission from Walden’s IRB
department allowing me to begin data collection, I had the director of the site email the
message to the staff enlisting participants. When the participants responded to me and I
verified their criteria, I e-mailed them the informed consent form (see Appendix B) for
the participants to review. I then called each potential participant and discussed
appropriate times to meet, reviewed the informed consent form, reviewed the purpose of
the study, and began conducting research.
Informed consent is important so that the participants understand what the
research process consists of, as well as what their rights are as participants
(AluwihareSamaranayake, 2012). This research took place with human participants, so it
is important to review ethical issues (Mitchell & Wellings, 2013). I have completed the
National Institute of Health’s web based training course on protecting human participants
(see Appendix C).
Full disclosure to the participants is important (Wisdom, Caveleri, Onwuegbuzie,
& Green, 2012). The aforementioned informed consent was the first step to establish full
disclosure. To protect the privacy and confidentiality of the participants the names of the
participants have been masked and an unidentifiable marker used. Participants were
assigned an alphanumeric instead of name. Keeping names of participants and
organizations confidential helped ensure confidentiality and privacy (Sherrod, 2011).
Participation in the study was strictly voluntary and the participants could have
withdrawn at any time. This option was explained in person when the informed consent
form was returned prior to the interview (see Appendix B). They could have withdrawn
by contacting me via e-mail or phone. A $50 gift card given as compensation for
participating in this study, which was also explained to the participant in the informed
consent form (see Appendix B). The results gained from their participation in this study
allowed their opinions to be recognized in a confidential manner, and possibly assist with
future M&As.
To maintain confidentiality and privacy, the data that I collected during the study
including consent forms and interview recordings were stored in a lockable file box. The
interview recordings are kept on a password encoded flash drive. The data will remain
stored there for a minimum of 5 years to protect the rights of the participants. Upon the
completion of the 5 years, the data will be destroyed via shredding and wiping the flash
drive files. The Walden IRB approval number for this study was 04-08-16-0476261.
Data Collection
Instruments
As the researcher, I was the primary data collection instrument. I used
semistructured interview questions as an instrument for data collection. According to
Petty, Thomson, and Stew (2012), interviews are valuable tools to collect data for
research studies. A semistructured interview is a combination of structured and
unstructured interviews (Cachia & Millward, 2011). Cachia and Millward indicated that,
within a semistrucutred interview, there is a fixed set of questions but additional
questions may be added to further explore the subject, and is meant to explore the
participant’s experiences. The interviews consisted of 11 semistructured open-ended
interview questions that relate to the participant’s experiences with the M&A (see
Appendix D). Again, participants were chosen for their experiences related to strategies
used in the M&A. Leaders were selected because they were in positions in which they
would have implemented or executed strategies. Nonleaders were recipients or witnesses
of the strategies implemented by leadership.
Prior to the interview, I reviewed the material pertaining to the interview so that I
was prepared. The interviews were audio recorded so that they could be transcribed post
interview. I also took a limited amount of notes during the interview so that I was able to
pay full attention to the participant and their body language. Listening is a critical
interviewing skill (Qu & Dumay, 2011). When I transcribed the audio files, I added my
notes to assist with data analysis. Proper organization of data can increase the validity and
reliability of the study (Qu & Dumay, 2011).
Once I transcribed the interviews, they were reviewed and cross-checked with the
audio recording to establish credibility. Once that was complete, I had the interviewees
review for additional validity and reliability (Hanson, Balmer, & Giardino, 2011).
Transcript review ensures that the interviewees acknowledge that their interviews were
documented correctly and their experiences portrayed accurately (Hagens, Dobrow, &
Chafe, 2009). Validity is important so that the credibility of the data is known (Petty,
Thomson, & Stew, 2012). In addition to collecting data from interviews, I received the
company employee handbook from the director of the facility. I also examined the
company website for information on the company in general, their mission statement,
vision statement, and other evidence of their culture, communication styles, and strategies
that may have been presented in framing the merger.
Data Collection Technique
The data collection technique that I used for this study was the interview. An
interview protocol was followed for the collection of the semistructured interview data
(see Appendix A). Interview protocols are important so that the interviewer does not
forget any important information (Jacob & Furgerson, 2012).
The first step in this process was to schedule a time and place to meet with the
participant that was convenient for them. I used an available meeting room at the
healthcare facility for convenience to the participants. I obtained permission from the
facility’s Director to use the onsite meeting room. The room was private to ensure
confidentiality and privacy. Each interview was scheduled for a 60-minute time period.
The employees were interviewed during non-work times. When the interview began, I
followed the interview protocol (see Appendix A). First was an explanation of the
purpose behind the research. Next, the informed consent form (see Appendix B) was
reviewed, signed, and returned by the participant.
An alphanumeric identifier was assigned to each participant to ensure
confidentiality and will be assigned at this time. The assignment of alphanumeric codes
can achieve confidentiality and privacy for the participant (Gibson, Benson, & Brand,
2013). If the participant was part of the leadership team they have an L for leader in front
of their number, if he or she was a nonleadership member they have E for employee in
front of their number. The numbers were assigned in conjunction with their order
interviewed. The participant identifier was written next to the name on the consent form
for organization.
The audio recording of the interview commenced at this time, and verification that
the recorder is working occurred in between questions. Prior to asking the next question, I
glanced at the recording device and ensured that the minutes were counting down and the
battery had not died. Once the recording device was verified as working, I begin to ask
the interview questions (see Appendix D). A copy of the letter of cooperation was
previously reviewed with the director (see Appendix E). Notes were taken about body
language and to capture the researcher’s thoughts and to provide context for the
responses. Probing deeper into questions occurred as needed. Upon completion of the
interview questions, the participants were reminded of contact numbers in the event that
additional questions arise. Once transcripts were completed, transcript review was done
to ensure that the transcribed information was correct and their experiences were
portrayed accurately (Hanson et al., 2011). Transcript review entailed e-mailing the
completed transcripts to the respective interviewee for review. The interviewees reviewed
the transcripts for accuracy, and were able to explain corrections at this time. All
participants confirmed their responses with no recommended changes.
Finally, the participants were thanked for their time.
Every data collection method has advantages and disadvantages. The
semistructured interview is no different. A semistructured interview begins with a few
structured questions but researchers are allowed to expand on them as needed. This
probing allows further discussion on the phenomenon in question (Cachia & Millward,
2011). A disadvantage of the semistructured interview is that some participants may be
reluctant to give in depth information face-to-face if they are shy or hesitant (Yin, 2014).
I did not find this to be the case in this study.
In addition, I read the entire company employee handbook and then prepared it for
upload to NVivo. I also navigated to the company website and read material on the
background of the company, the mission, the vision, and other informational pages that
provided insight into the culture and communication style of leadership—especially
related to the merger. I copied and pasted all of this information into an MS Word
document so that it could be uploaded into NVivo and coded along with the interview
data.
Data Organization Techniques
Each participant was given an alphanumeric identifier to ensure confidentiality.
The assignment of alphanumeric codes can achieve confidentiality and privacy for the
participant (Gibson, et al., 2013). If they were leadership staff, they received an L for
leader in front of their number. If they were nonleadership staff, they received an E for
employee in front of their number. Numbers were assigned in order of interviews. For
example, the first leadership employee interviewed was classified as L1. The interviews
were recorded using a Livescribe Echo Smartpen. I chose the Livescribe Echo Smartpen
compared to other recording devices because it is able to record and take notes whereas
others can only voice record. This recording device allowed the interviews to be played
back for transcription. The Livescribe Echo Smartpen’s software also assisted with
transcription as it can seek out key words. I was also able to speed up or slow down
playback of recordings. I also included the electronic versions of the documents for
document review (from the handbook and website) along with this material. All
electronic files including notes were stored and maintained in folders on a password
protected flash drive (Jacob & Ferguson, 2012).
To maintain confidentiality and privacy, the raw data that was collected during the
study was stored in a lockable file box. Informed consent forms and interview recordings
were also stored in the file box. The box will remain stored in my home office for a
minimum of 5 years to protect the rights of the participants. Upon the completion of the 5
years, the data will be destroyed via shredding and wiping the flash drive files (Fein
& Kulik, 2011).
Data Analysis Technique
The use of open-ended questions during semistructured interviews allows a
researcher to delve deeper into questions (Wilson, 2012). An interview protocol was used
(see Appendix A) during the interviews. I used the interview questions to develop themes
that correspond to the central research question of: What strategies do healthcare business
leaders use postmerger to influence the engagement, and satisfaction of employees?
Triangulation was reached as I reviewed face-to-face semistructured interviews with
leadership staff, nonleadership staff, and conducted a document review (see Walshe,
2011). The documents reviewed along with these interview data consisted of the
company employee handbook and information downloaded from their website. These
additional documents provided insight into company policy and procedures, official
positions and leadership styles, the mission and vision. This type of triangulated
information helped me assess the state of the merger from this third angle. Triangulation
provided a more substantial look into the study, whereas one type of data alone may have
been limiting (Heale & Forbes, 2013).
Data analysis is the process of analyzing the collected data by organizing in a way
that allows the discovery of useful themes and patterns to emerge (Yin, 2014). The
Livescribe Echo Smartpen was used to record the interviews. Upon completion of the
interviews, I used the Livescribe Echo software to upload the recordings to my computer.
I then transcribed the recordings into a Microsoft Word document by typing the recorded
words while playing back the recording. After the recordings were transcribed, I reviewed
each one for errors, and e-mailed a copy to each participant for transcript review. This
transcript review was done to ensure that the correct views were captured and there were
no errors (Houghton, Casey, Shaw, & Murphy, 2013). Yin (2014) recommended reading
the transcripts multiple times to arrive at a better understanding of the whole interview. I
did this and took notes as I saw emerging words or themes and highlighted as needed.
Yin (2014) stated that data analysis should consist of data compilation, data
disassembly, reassembling data, data interpretation, and conclusions from the data. The
data compilation occurred as I organized the interviews into transcripts and imported
them into the coding software. Once every participant had responded and informed me
that their interviews were transcribed appropriately, I continued to uncover themes and
code. Once I had read the transcripts multiple times, I uploaded the transcripts from Word
into NVivo version 11. I chose NVivo for my data analysis because it is a user-friendly
program that was recommended by several Walden staff members. A wide variety of
tutorials and user support guides exist for this software making it easier to use. I
compared NVivo to ATLAS.ti prior to making a decision. ATLAS.ti did not appear to
have the support systems I might have needed as a first time user. NVivo allows data to
be imported from other sources. I imported information from a Word document so this
was an important feature. ATLAS.ti stores its data on an external database and there have
been issues with saving. From this information I decided that NVivo was a better fit.
The use of software could assist the researcher with keyword searches,
organization, and coding (Rowley, 2012). After I uploaded the transcripts and documents
is when the disassembly of the data began; the coding process is where themes and
patterns began to emerge (Yin, 2014). The director of the facility had provided me with
the employee handbook, as mentioned. In addition, as mentioned, I had created MS
Word documents containing relevant information from the company website. These were
uploaded to NVivo along with the transcribed interview documents. I used the autocoding
feature of the NVivo software to assist with word frequencies and the emergence of
themes and patterns.
Coding helps organize and interpret the data (Carcary, 2011). Once repetitive
words were found, notes were created to keep track of each emerging theme and the
reassembly of the data occurred. Once I had established codes from keyword searches
and the autocoding function, I went through each interview and document again and
manually coded the document for the themes and codes that had emerged in the process,
just to ensure that each document had been properly coded and that I had not missed
anything either during the first read through, and also to ensure that NVivo did not miss
anything during the autocoding process.
Yin (2014) stated that normally five to seven themes would emerge in qualitative
research. Once I had found codes and themes, conclusions were made about the data
collected. The connection of the study, method, and literature is the conceptual
framework (Borrego, Foster, & Froyd, 2014). The conceptual framework that grounded
this study was the SET. The SET brings together sociology, social psychology, and
anthropology to explain how people work together for a mutual benefit (Homans, 1959).
The behavior of one person will influence the behavior of another person as each
considers the cost versus the reward ratio (Homans, 1959). The SET can help to explain
employee engagement issues that may occur in the workplace (Slack et al., 2015). I will
use the SET framework to assist with emerging themes and interpretation of the study’s
results.
Reliability and Validity
Reliability
Reliability and validity refer to the credibility, accuracy, and precision of the
research (Street & Ward, 2012). When validity and reliability are shown this
demonstrates a good level of rigor. These terms are used more heavily within quantitative
research studies, and the meanings do not carry over into qualitative research (Foley &
O’Conner, 2013). The tools used to assess the rigor of qualitative research are most
commonly dependability, credibility, transferability, and confirmability (Houghton et al.,
2013).
The ability of a researcher to replicate a previous study and find similar results is
known as reliability (Ali & Yusof, 2011). Reliability will also assure that another
researcher could replicate the finding of the original study by following the documented
process (Ali & Yusof, 2011). To strengthen the consistency, reliability, and validity
within qualitative research the researcher tends to rely on tools such as semistructured
interviews and protocols (Foley & O’Conner, 2013). Munn, Porritt, Lockwood,
Aromataris, and Pearson (2014) stated that the equivalent of reliability and internal
validity within a quantitative study are the same as credibility and dependability in
qualitative research. In a qualitative study, the researcher is the instrument, who
documents the process thoroughly through recordings, notes, and interviews (Ali &
Yusof, 2011).
Onwuegbuzie et al. (2012) stated that dependability is related to the quality of
qualitative research. Upon completion of the interviews, I reviewed the recordings
multiple times for errors and information gathering. I then moved on to transcribe the
interviews. Upon completion of the transcription, I presented them to the interviewees for
their review. They checked for accuracy and confirmation of the interpretation. The
participants were asked to return the transcripts with comments within five days of
receipt. This process is known as transcript review, and is a form of dependability.
Validity
Validity consists of external and internal validity. Internal validity refers to
accuracy or quality of the study, and external validity is how well the study can be
applied to other settings (Thomas & Magilvy, 2011). Researchers should achieve both
internal and external clarity (Thomas & Magilvy, 2011). Validity is used to lessen the
issues that may influence the outcome of research (Bleijenbergh, Korzilius, &
Verschuren, 2011). Validating research creates quality and is considered a strength of
qualitative research (Ali & Yusof, 2011). Dependability, trustworthiness, credibility, and
transferability are all areas of validity (Mayer & Boness, 2011).
Credibility is ensuring that the research is believable by the readers and by the
participants that provided the data. The readers must determine whether it is a true
interpretation of what was said (Munn et al., 2014). Transcript review is one of the best
techniques to show credibility in a qualitative study (Thomas & Magilvy, 2011). I
provided the participants with a copy of their transcripts for review, and ensured that my
interpretations are appropriate. This allowed the participants the ability to verify for
accurateness, and build trust (see Mero-Jaffe, 2011).
I also used methodological triangulation. The use of methodological triangulation
will aid in the validity of a research study (Yin, 2014). Leadership staff and nonleadership
staff were interviewed, and document review was performed to gain triangulation.
Transferability is described as how easily the research results could be transferred
to another context (Houghton et al., 2013). I thoroughly described the research process
and any assumptions made so that future researchers may use this information. It is at the
discretion of other researchers to determine whether the results are transferable (Marshall
& Rossman, 2016). A high level of detail and explanation created a better level of
transferability (Houghton et al., 2013). Confirmability is another important part of
validity. Confirmability is the accuracy of the data and how well your results could be
confirmed by others (Houghton et al., 2013). I established confirmability by referencing
literature that have had similar results. Livescribe software was also used to assist with
data analysis accuracy.
To reach saturation a large enough sample must be examined, however, not so
large that there is repetition (O’Reilly & Parker, 2013). Dworkin (2012) stated that the
recommended number of interview participants for a qualitative study is 5-20, with a goal
of saturation. I interviewed eight participants. If saturation had not been reached at that
point, I would have consulted with my chair, and prepared to send an amendment into
IRB for additional participants. Saturation is reached when there are no longer any new
themes or ideas emerging, and you have enough information to recreate the study
(Dworkin, 2012).
Transition and Summary
The purpose of this qualitative descriptive case study was to explore strategies
healthcare business leaders use to influence the engagement and satisfaction of
employees, postmerger. The results will have the potential to assist healthcare leaders
with employee engagement and increased satisfaction in future M&As. In section 2, I
discussed the purpose statement, role of the researcher, participants, methods and design,
as well as sampling. Data collection, organization, and analysis were also covered.
Explanations were also given on instruments, ethical research, reliability, and validity.
Section 3 will include the results of the findings. An overview of the study is provided
along with professional practice applications, implications for social change, reflections,
recommendations for future research and action.
Section 3: Application to Professional Practice and Implications for Change
In this section, I present findings and describe results from this study. I begin
Section 3 with an introduction addressing the purpose of the study, followed by a
presentation of findings. Furthermore, I discuss the potential applications to professional
practice, implications for social change, recommendations for action, recommendations
for further research, and reflections.
Overview of Study
The purpose of this qualitative descriptive case study was to explore strategies
healthcare business leaders use to influence the engagement and satisfaction of
employees, postmerger. The target population was comprised of employees at one
medical facility in the North Central region of the United States who were employed with
the organization prior to and postmerger. This case study included interviews with two
different populations as well as document review.
I conducted semistructured interviews, 2 years postmerger, with four leadership
employees and four nonleadership employees in a healthcare facility in the North Central
United States. Each of the participants had been employed at the facility prior to the
M&A (for an average of 11 years), were employed there post-M&A, and were all current
employees of the healthcare facility. The interviews took place in a private meeting room
at the facility and by telephone. Participants responded to questions pertaining to
preferred communication style, employee engagement and employee satisfaction. The
interviews were audio recorded, transcribed, and then coded. During the coding, five
themes emerged. A review of company documents correlated with the data that was
obtained from the interviews.
The themes that emerged were communication, leadership, trust/emotional
engagement, resources, and corporate culture. According to the data, employee
engagement and satisfaction are linked to these themes. It is important for organizational
leaders who are going through M&As to understand this relationship to increase the
success rate of M&As.
Presentation of the Findings
In this study, I addressed the central research question: What strategies do
healthcare business leaders use postmerger to influence the engagement and satisfaction
of employees? I used semistructured interviews consisting of 11 questions and document
review (employee handbook and website) to gain triangulation. The participants had all
been employed at the facility at the time of the merge, after the merge, and were current
employees. The participants were employed in various departments within the healthcare
facility.
Interviews were conducted onsite in a private meeting room, and the others via
recorded telephone calls. The average interview time was around 30 minutes. After eight
interviews, I reached saturation, where no new information emerged (e.g., Dworkin,
2012), and no further interviews were needed. Four leaders and four nonleaders were
interviewed.
Once the interviews were completed, I transcribed the recordings and e-mailed the
transcripts to the participants for transcript review. Transcript review ensures that the
correct views were captured and no errors were made (Houghton et al., 2013). I allowed
participants 5 days to review and make corrections on the transcripts. After corrections
were made, I uploaded the transcripts in NVivo 11. Once the data were uploaded into
NVivo 11, I used the auto-coding feature to get a better view of each of the interview
questions and their answers. After reviewing each of the interview questions and answers,
I coded the transcript data by creating parent and child nodes. I followed the same process
with the document review materials (handbook and information from the website) to
achieve methodological triangulation.
At this is the point, the themes began to emerge. While coding, five main ideas
emerged. These themes, that emerged as strategies taken by the company postmerger,
were: more frequent, informed, and transparent communication, intentional structured
leadership, increased trust/emotional engagement, increased focus on human resources,
and positive corporate culture.
Strategy 1: More Frequent, Informed, and Transparent Communication
Postmerger, the organization implemented new communication strategies.
Premerger, some of the participants felt that they were not adequately informed about
what was going to take place. Internal communication is known to create trust and
increase commitment between leadership and staff (Mishra et al., 2014). During the
interviews, all of the participant’s answers were in agreement with Mishra et al. (2014)
that the organization’s leaders should be upfront about any upcoming changes. Participant
1E stated, “I truly believe that if they are upfront with their employees that would make a
big difference. It would give them the information they need to make the right choice.”
Another participant, 1L, stated, “We had a relatively short notice, probably a month.”
Participants noted that they were not informed and did not know the truth. Several
participants mentioned rumors as one of the forms of communication they received, and
that they were in the dark. Participant 1E stated, “It was like rumors, first we heard from
other workers and stuff, and then it was like it’s going to be in two weeks, and then it
didn’t happen so we thought someone was just making this up.” Another participant, 3E
stated, “It was more or less rumors the way I heard it.” When a limited amount of
information is passed around a peer group, the people in that group will create their own
conclusions, which are rumors. This creates a false sense of safety within the group, as
well as dysfunction and conflict (Marmenout, 2011). Buiter and Harris (2013)
recommended that communication should be immediate, consistent and truthful to
decrease stress and increase trust.
Three out of four leaders (75%) mentioned that open and transparent
communication is key to a successful M&A. One participant mentioned that monthly
meetings to keep everyone informed are helpful. One participant, 4L stated, “We were
totally out of the loop, so prior to the transition was very difficult because we had no
input and no say.” In addition, participants stated that poor communication existed prior
to the M&A, and that they felt misled. There was a lack of communication in this facility
prior to the M&A. Lack of communication can create lowered employee effectiveness
(Kemel & Shahid, 2012). Transparent communication diffuses rumors and creates trust.
One of the strategies that the organization focused on postmerger was clear and consistent
communication.
Premerger, several of the participants mentioned that they were upset that they
were promised things by leadership that they were not able to follow through with.
Participant 1E stated “They promised a lot of things to the group that should have never
been promised because they weren’t able to honor some of the things.” Another
participant, 2E stated, “The person in the leadership position promised all kinds of things
that they should have never said.” Cording et al. (2014) explained that over and under
promising during an M&A would decrease organizational authenticity. Promises should
not be made to employees unless they will be upheld (Ertugrul, 2013). When promises
cannot be upheld, this creates turmoil.
I found that face-to-face communication is the most effective communication
style for M&As. This style allows the participant to not only hear verbal cues, but also
see cues (Galpin et al., 2014). Interview Question Number 2 in this study was: What
methods of communication were used to tell you about the upcoming M&A? The
participants in this study indicated that they were told about the M&A through face-
toface meetings, telephone calls, or no communication. The participants stated that,
during a face-to-face meeting, employees were able to ask questions and obtain answers
at that time. They also mentioned that a large group setting was fine to communicate an
M&A or other large organizational change.
It was also noted that it is acceptable for small changes to be communicated via
email, however any major change should be communicated in person. Multiple
participants wanted leadership, including board members to become more active in the
facility. They would like to see a presence from them, even if it was just to stop and say
hello. One of the strategies they used postmerger was a change in board members and the
communication style of the board members.
The participants were then asked what their preferred method of communication
was. The majority, at 75% stated that they prefer face-to-face communication over other
forms of communication such as e-mails, or telephone calls. Table 1 includes the
communication methods used for this M&A. Table 2 details the interview results on
preferred method of communication.
Table 1
Methods of Communication About the M&A
Participant Face-to-face Telephone None
Leaders 3 1 0
Employees 3 0 1
Total 6 1 1
Table 2
Preferred Method of Communication
Participant Face-to-face No Preference No
Response
Employees 3 0 1
Total 6 1 1
Strategy 2: Intentional, Structured Leadership
The second strategy that appeared is closely related to communication, and that is
intentional, structured leadership. Postmerger, the employees received direction and
communication from a new board and leadership who were truthful and transparent.
Participants stated, premerger that they were receiving incorrect information from
leadership prior to the M&A, which created a sense of mistrust. The employees and
leadership participants did not know the expectations and things lacked structure prior to
the M&A. This also added to the lack of trust.
Several of the participants mentioned that they received incorrect information
prior to the merger. They also stated that limited information was given to them prior to
the M&A and that leaders were not very open with this information, which caused
turmoil for the participants. This is congruent to what Buiter and Harris (2013)
mentioned; when employees are uncertain about what is going to happen this can cause
unnecessary stress. When leadership is open and honest with their employees, the
employees will be put at ease.
Leaders 3 1 0
The participants thought that the previous leadership staff was not committed.
They recommended that leaders are committed and give 100% to the team. Rogan and
Sorenson (2014) asserted that many leaders do not properly prepare for an M&A.
Effective leaders can create a satisfied and engaged workplace (Nieberding, 2014).
Strong leaders are an integral role during an M&A as there are various pressures and
stress (Hahm & Jung, 2013). Lee et al. (2013) believed that when employees have lower
levels of trust with their leadership team this can interfere with integration. The data
collected from this study also verifies that information. Ertugrul (2013) asserted that
employees look to their leaders for support during times of change.
One of the issues that six out of eight (75%) participants brought up was the board
of directors. They were not satisfied with the board prior to the M&A for various reasons.
The participants thought that the board of directors was comprised of people who had
filled the positions for far too long. They recommended changing the board of directors in
a timely manner to prevent stagnancy. One participant, 2E stated, “The board president
had been the president for many years, and that is not healthy in an organization.” The
participants did not believe that the board of directors prior to the M&A was a good
working board. L4 indicated that, “The board of directors kept everything to themselves.”
The employees agreed that the old leadership staff, including the board of directors was
never present in the facility. They did not communicate with employees. The new
strategy, postmerger, was a change in the board of directors and an open style of
leadership and communication.
Interviewees agreed that the employees want to be included and their thoughts and
opinions matter. Two participants mentioned that the previous leadership staff was rude
and unprofessional at times. Two participants also mentioned that there were unrealistic
expectations of employees.
The consensus among the participants was that they liked the leadership staff
more postmerger as they were intentional and structured. They have increased
communication and the employees are happier andwould like to see the board of directors
onsite and more involved at times. One participant stated that they now have positive and
supportive leadership that can talk to the staff. Two of the participants mentioned that,
after the M&A, things were still not structured and expectations remained unknown. This
aligns with Bakker’s (2014) theory that giving employees clear expectations, feedback,
access to information, and autonomy will increase employee engagement.
Strategy 3: Increased Trust/Emotional Engagement
Trust and emotional engagement comprise the third strategy I discovered.
Postmerger, the company made efforts to increase engagement. Premerger, many
participants described feeling increased stress and uncertainty during the M&A.
Participant 2E said that, “What happened was very very stressful.” Another participant,
1L stated, “There was a high level of stress for employees.” Seven out of eight (88%)
participants stated that the M&A was a very stressful time for them. The changes made
things more stressful, along with the lack of communication. The participants felt
uniformed and blocked from the truth. One participant mentioned that it was like starting
over. Another participant stated that people were guessing what was going to happen
next, and that chaos ensued.
Buiter and Harris (2013) argued that M&As are prone to have negative effects on
employees in areas such as stress, anxiety, commitment, satisfaction, and identification.
This stress puts pressure on the employees and the leadership team. During a large
change such as an M&A employees may experience uncertainty and an increase in stress
(Martin & Butler, 2015).
When leadership is transparent and open with their employees, relative
deprivation will decrease (Lee et al., 2013). This decrease in relative deprivation has
occurred in this facility. One of the participants stated that the M&A was scary and
stressful, but is on the upswing. The communication has gotten better. One strategy
postmerger was to increase open and honest communication to put employees at ease and
decrease stress.
Employees can also experience a feeling of loss postmerger (Kemel & Shahid,
2012). Several of the participants stated that they were concerned about losing their jobs.
One mentioned that they never knew what was going on, and that they worried about the
possibility of termination on a daily basis. M&As can create psychological disturbances
for employees which leads to work inefficiency and increased turnover (Rogan &
Sorenson, 2014). Lee et al. (2013) explained that relative deprivation occurs when
employees experience loss from organizational change and may make employees
sensitive.
During an M&A, many changes occur quickly. One of the participants described
this well. The participant stated that at first, they felt a huge loss, then they started to
experience hopefulness, this quickly faded to frustration and skepticism about the
unknown. The emotions then shifted back to fear and frustration knowing that the large
amount of work that had to be done. At the time of the interview, the participant was
experiencing a mix of emotions. Participant 1L described this: “First I felt a huge loss,
then it was like feeling hopeful, and then it was frustrating.” Staff worry about the
occurring changes, but employee’s reactions will evolve over time (Lee et al., 2013).
During the interview the participants were asked about engagement prior to the
M&A versus post-M&A. They were also asked to rate their engagement on a scale of 1-
10, with 10 as the most engaged. The responses are presented in Table 3.
Table 3
Leaders Engagement Level Pre and Post M&A
Pre-M&A Post-M&A
L1 7.5 4.5
L2 1 10
L3 10 8
L4 2 8
Note: Numbers were based on 1-10 scale where 10 = most engaged.
Table 4
Employees Engagement Level Pre- and Post-M&A
Pre-M&A Post-M&A
E1 5 9
E2 7 8
E3 10 10
E4 5 8
Note: Numbers were based on 1-10 scale where 10 = most engaged.
When I asked the participants to describe employee engagement premerger, a
total of five said engagement increased, two said it decreased, and one said it stayed the
same. The breakdown for the leaders is that two thought engagement increased
postmerger, and two thought it decreased. Three nonleadership participants thought the
engagement had gone up, and one thought it remained the same. Mishra et al. (2014)
described employee engagement as how emotionally connected and invested employees
are to the organization. Galpin et al. (2012) asserted that engaged employees are a critical
component to an M&A.
When I asked nonleadership participants to describe employee engagement
premerger, three out of four mentioned that they did not like the rules and guidelines
premerger and that it was too restrictive. They also mentioned that they did not believe
that there was much trust or support within the organization. The employees were less
engaged at that point. When asked about postmerger engagement, the participants stated
that they had new leadership, and at the time of the study, they felt safer and like part of a
team. The engagement for nonleadership participants went up for three out of four. The
other nonleadership participant stated that engagement stayed the same and that they have
always been engaged. Cording et al. (2014) argued that when a large change such as an
M&A occurs employees experience vulnerability. The trust can become impaired which
leads to job dissatisfaction and an unengaged workforce.
When I asked leadership participants to describe engagement premerger to
postmerger, there was a split. Two of the leadership participants stated that their
engagement was higher prior to the M&A because they had more resources to work with
including better policies and procedures. They felt more committed to the organization at
that time and felt that things were running smoothly.
After the M&A, they described the departments as not running as well as they
should, and mentioned an increase in turmoil and job duties. They are still committed to
the organization, however, less engaged. The other two leaders described increased
engagement postmerger. Prior to the merge, they felt that the structure was too restrictive
and things were not tailored to the facility’s needs. They also thought that they were
given minimal communication from the board of directors and were out of the loop.
One leader stated that they were lacking any trust. However, postmerger, the trust
was regained and that was partially due to increased communication and a new board of
directors. Lightle, Castellano, Baker, and Sweeney (2015) asserted that the board of
directors should be involved with increasing employee engagement, as well as verifying
the leaderships plans for increasing employee engagement. This increase in engagement
coincides with what Mishra et al. (2014) described; employees that experience
transparency from leadership makes the employees experience a sense of belonging and
creates trust. The lack of trust and communication was mentioned various times over the
course of the eight interviews.
Strategy 4: Increased Focus on Human Resources
The fourth strategy that stood out during my data analysis was resources. The
strategy that the leadership used, postmerger, was to view staff as valuable resources that
need to be retained. Premerger, six out of eight (75%) participants mentioned turnover as
a lost resource. One participant stated that many people with longevity had left shortly
after the M&A. Bakker (2014) explained that the most important part of increasing
employee engagement is providing employees with the resources that they need to
perform their jobs. Of the many resources that the participants mentioned as lacking, the
majority of participants mentioned staffing. Edwards and Edwards (2013) argued that
poor integration would increase staff turnover. This was true for the healthcare facility
where I conducted this research.
A large amount of leadership turnover occurred. On average organizations lose
one quarter of their leaders within the first year postmerger. Another participant stated
that the nursing department suffered the largest turnover in the facility, citing unrealistic
expectations as one of the reasons for the turnover. Yet another participant voiced that
employees were leaving because promises were not kept. This high turnover rate confers
with Krug et al. (2014) statement that increased turnover in leadership is normally seen
postmerger.
One participant stated that the leadership team kept them in the dark because they
thought they would quit if they knew what was happening, however, the opposite was
true. Employees were leaving because they were kept in the dark and not communicated
with. This lack of communication confers with Buiter and Harris’s (2013) argument that
M&As create stress and anxiety which leads to a higher turnover rate. Ertugral (2013)
asserted that leaders should not make promises they cannot keep as this creates turmoil.
This finding also coincides with Kemel and Shahid’s (2012) statement that the
stress and sense of loss postmerger can create increased turnover rates. Galpin (2012)
believed that employees leave organizations during M&As because of uncertainty and
lack of communication. The lack of staff as a resource can also add to the lack of other
resources. Krug et al. (2014) argued that a larger staff turnover consumes a large quantity
of resources and time. Postmerger, the organization implemented strategies to retain staff
and reduce turnover.
Strategy 5: Positive Corporate Culture
Another strategy that emerged less prominently was corporate culture.
Postmerger, the organization took steps to create a more positive culture. During the
interviews, a few participants mentioned areas of concern regarding corporate culture.
Participants in the study felt that the company values prior to the M&A did not always
mesh. With the lack of communication prior to the M&A, some worst-case thinking was
present. Many unknown variables presented themselves and the employees were nervous
about what was going to occur. This created the spread of rumors and inaccurate
information. After the merger, this style of thinking has been minimized. Rogan and
Sorenson (2014) theorized that many leaders do not prepare for the integration of culture
during an M&A.
One participant stated that there is a new way of thinking after the M&A. Another
participant shared that the company knew that there would be a change in the corporate
belief system and was excited for more flexibility and openness to ideas. A complete
change of systems in this facility occurred and it is more important than ever that all
teams work together.
While I reviewed the employee handbook for this healthcare facility, I became
aware of the fact that the employees were directed to work as a team and help out where
needed. The words pride and satisfaction were also highlighted. The handbook also
included an area where communication is open and direct. The facility’s management
wanted to create a strategy to maintain a positive work environment. This strategy was
congruent to what the participants said about increased satisfaction with their jobs. On the
company’s website, the mission and vision indicated that they wanted to create an
environment where people are valued. They believe in an environment where everyone is
treated with respect.
In summary, postmerger, the company implemented five strategies. The first
strategy was more frequent, informed, and transparent communication. The company
increased communication and made efforts to make communication more direct and
open. The second strategy was intentional, structured leadership. Postmerger, the
company made leadership more intentional and structured. They even changed their
board of directors. The third strategy was increased trust/emotional engagement. This
strategy, postmerger, was to increase open and honest communication to put employees at
ease and decrease stress. The fourth strategy was increased focus on human resources.
This strategy included viewing staff as valuable resources that need to be retained. The
fifth strategy was positive corporate culture. The company implemented changes around
the corporate belief structure, advocated increased communication and teamwork, and
promoted open and direct communication among all staff and leadership.
The Social Exchange
The conceptual framework for this study was the social exchange theory (SET).
The social exchange theory describes how people in groups influence one another. Slack
et al. (2015) recommended using SET to study workplace behavior and employee
engagement. When people interact with one another that is considered an exchange, and
can be comprised of material or nonmaterial goods (Homans, 1958).
There are many exchanges that occur during an M&A or other large
organizational change. In this study participants experienced emotional (nonmaterial) and
material exchange. The participants discussed the exchange of various resources such as
emotions, policies, and leadership. Andrew and Sofian (2012) asserted that when an
employee receives a high level of social exchange they exhibit high levels of positive
outcomes. The feeling of reciprocity is important, and when they believe they are
experiencing fair treatment through communication and others areas they will work
harder and become more engaged (Buiter & Harris, 2013). This was the case among these
employees.
When the participants viewed the communication and leadership as lacking, they
were less engaged and felt less satisfied. Many participants in this study felt that they
were uninformed and did not know what was going to happen next, premerger. The
majority of participants were unhappy and less engaged. However, when the
communication and leadership improved, the participants were more engaged and
satisfied. Participant 2L described to me that, “There was no trust before, now the stress
left, I can trust my fellow employees and now the trust is back.” SET encompasses the
reciprocal relationship of resources. Memon et al. (2014) determined that when
employees believe they are a good fit to the organization’s values they will be more
satisfied and engaged.
The participants who were unsatisfied prior to the M&A were unhappy with the
communication, leadership, and other relationships. The participants did not believe that
they were treated well. Participant 1E also described trust by saying, “There was no trust
prior to the merge, nobody trusted them.” This in turn created job dissatisfaction and
lowered engagement. Postmerger this same employee stated, “There is more satisfaction
now, there are more positive people. The departments are getting along.” The participants
stated that postmerger they were receiving better communication, leadership, and
resources, and in turn were experiencing increased engagement and satisfaction. This is
congruent with the social exchange theory. The participants that were happy prior to the
merge and dissatisfied postmerger experienced the same phenomenon, just in reverse.
The results confer with the social exchange theory.
Applications to Professional Practice
The main objective of this study was to determine what factors influence
employee engagement and satisfaction during an M&A. Change is becoming quite
common in the business world and viewing change through the employee’s perspective
can be beneficial to an organization’s leaders (Buiter & Harris, 2013). The findings
acquired from the participant interviews revealed that many participants were not happy
with the way the M&A occurred. If organization’s leaders consider these findings when
going through a large organizational change such as an M&A, they may be able to
increase employee engagement and satisfaction and improve business practice. Even if an
organization is not going through an M&A they might be able to utilize the information
provided to increase employee engagement and satisfaction as it relates to the social
exchange theory.
The five strategies associated with the study were more frequent, informed, and
transparent communication, intentional, structured leadership, increased trust/emotional
engagement, increased focus on human resources, and positive corporate culture.
Lundqvist (2012) noted that the employee factor is the main cause of M&A failure. I
wanted to focus on the human side of M&As to contribute to business practice. Most
participants indicated that they were most engaged and satisfied when the organization’s
leaders were transparent and open with communication. When leadership is transparent
and open with communication employee satisfaction and engagement will improve (Cho
et al., 2014). When leadership is not open with communication employees tend to come
up with their own ideas of what is occurring, and this creates chaos.
The participants suggested that the importance of leadership not making promises
that they cannot uphold was high. Ertugral (2013) indicated that making promises that are
not upheld could create turmoil and distrust. This behavior of distrust also decreases
organizational authenticity (Cording et al., 2014). When M&As occur, there is much
uncertainty amongst employees and trust can become impaired (Cording et al., 2014).
The majority of the participants in this study mentioned that at one point or another,
during the M&A they were lacking trust in the organization. This can contribute to M&A
failure and decreased engagement.
Employee engagement is important. Keeping employees engaged will not only
increase job satisfaction, it will also decrease turnover rates. Some participants mentioned
that turnover was high during the M&A. With M&As comes an increase in employee and
leadership turnover (Krug et al., 2014). Galpin (2012) explained that a high leadership
turnover postmerger would have a negative influence on organizational performance. A
high turnover rate will also consume a large amount of time and resources (Krug et al.,
2014). Committed employees reduce the risk of turnover (Ertugrul, 2013). Leadership
should try to retain as many staff as possible for the greatest chance at success. This
research may help to fill a gap on the human side of M&As in relation to employee
engagement and satisfaction.
Implications for Social Change
The prevalence of M&As is high and is increasing at a fast rate (Mantere et al.,
2012). The number of M&As continues to rise, however, the success rate does not rise
with it (Gomes et al., 2012). The implications for positive social change include strategies
to increase employee engagement and satisfaction. The results of this study may assist
healthcare and non-healthcare leaders with M&As or large-scale organizational changes.
Increased communication, strong leadership, access to resources, and effective planning
can lead to a more engaged and satisfied workforce. When employees are satisfied and
engaged, they are more likely to provide better customer service and increase patient
satisfaction.
Galpin (2012) noted that disengaged employees have decreased productivity,
safety, and lowered customer service. When employees are dissatisfied they will decrease
how they treat stakeholders and consumers (Cording et al., 2014). In essence, if
leadership is more focused on keeping employee engagement and satisfaction up, they
are more likely to see an increase in productivity, patient or customer satisfaction, less
turnover, better relationships, and decreased safety issues. The information gained from
this study may assist leaders with increasing employee engagement and satisfaction
during an M&A, which in turn may lead to an increase in M&A success rates. This
information would contribute to more satisfied employees and families, as well as help
the local communities and economy as a whole.
Recommendations for Action
The purpose of this qualitative descriptive case study was to explore what factors
influence employee satisfaction and engagement during an M&A. The findings yielded
conclusions from the perspective of healthcare employees regarding employee
engagement and satisfaction during an M&A. Leaders of organizations planning on going
through an M&A or other large organizational change may benefit from this information.
Leaders that are interested in increasing engagement and satisfaction may also benefit
from this information. I recommend the following actions based on the results of this
study:
•Leaders should communicate openly about any upcoming changes.
Leaders should provide immediate, upfront, and truthful information to
their employees to reduce stress and gain trust.
•Leaders should not make promises that they are unable to uphold. This
will increase organizational authenticity.
•Leaders should practice face-to-face communication when important
messages are given. Employees prefer this style of communication.
•Leaders are an integral part of an M&A. An organization should hire and
maintain strong leadership to create an engaged worforce.
•During a large organizational change such as an M&A, leadership should
work hard to gain the trust of their employees. This will increase
satisfaction and engagement.
•Leadership should ensure that their employees have all of the resources
that they need to be successful.
The results of this study could be distributed to leaders dealing with organizational
change through training or professional publications. The results could also be discussed
at various professional conferences, and could also be disseminated through scholarly
journals or business journals.
Recommendations for Further Study
A large amount of research about M&As and their financial implications exists;
owever, research on the human side of M&As is limited. Continued studies regarding the
human side of M&As should be explored to address areas not addressed in the study and
to review delimitations. Researchers have recommended studying both aspects together to
obtain a better understanding if indeed lowered engagement and satisfaction creates a less
financially successful M&A.
Opportunities for further studies might include researching employee engagement
and satisfaction in non-healthcare organizations. Another recommendation would be to
perform a multi case study. A researcher could look at multiple facilities and compare the
results. A multicase study could also be used to look at the views of employees in the
acquiring organization versus the views of the employees in the acquired organization.
This data would divulge information related to the difference in views of the two merged
organizations.
Finally, additional quantitative studies could be performed to expand the existing
findings based on current quantitative studies. Contributions from a quantitative study
could add further insight into employee engagement and satisfaction on a much larger
platform. A survey could be distributed to participants in a larger area to determine
factors that influence satisfaction and engagement during an M&A. Additionally, this
study was focused on the North Central part of the United States; future studies could be
performed in other parts of the country or world to gain a broader understanding of
employee engagement and satisfaction.
Reflections
The doctoral study process was quite overwhelming at times. Piece by piece the
study slowly came together and was a great learning experience. I was able to gain
knowledge regarding employee engagement and satisfaction during M&As. I have been
through an M&A as an employee and was able to learn what others had been through
during a similar process. The topic of M&As is going to expand as time passes. I have
always believed that when employees are engaged, the organization will experience
higher success rates.
When I chose this topic of M&As, I knew that I had experienced an M&A and
had to become unbiased. To lessen the possibility of bias I chose to conduct a qualitative
study so that I did not bring predetermined variables into question. This type of study
allowed the participant to explain their views about the M&A they had experienced. I
followed an interview protocol to ensure that I stayed on track. I had not met any of the
interview participants prior to the interview and had never been in the facility. The fact
that I did not know anyone helped to decrease bias.
One of the main lessons I learned from the interviews is that M&As and large
organizational change can have strong emotional effects on the people involved. Many
participants shared emotions and feelings that were raw and passionate. While listening to
them, I realized that they were all very dedicated to the organization and wanted things to
improve. This made me think; what if all of that energy and emotion were turned in a
positive direction. A few alterations in leadership and communication could drastically
change the engagement and satisfaction of these people, not only in their careers, but also
in their lives.
Summary and Study Conclusions
To increase market share and compete globally, many organizations are turning to
M&As. The number of M&As continues to rise (Mantere et al., 2012). Although the
occurrence of M&As continues to rise, the success rate has not followed (Larhiri &
Narayanan, 2013). This qualitative descriptive case study was completed to discover
reasons why the success rate may be lacking. The purpose of this study was to explore the
human side of M&As and how employee engagement and satisfaction might influence
the success or failure of an organization going through an M&A. Business owners and
leaders might not understand what human factors influence the success or failure of an
M&A.
After coding the data, five strategies emerged. I then linked each of these theories
back to the literature, the social exchange theory, and the existing body of knowledge.
The themes that emerged were communication, leadership, trust, resources, and corporate
culture. The findings indicated that there is a direct link with employee engagement and
satisfaction to these five themes. To increase employee engagement and satisfaction when
going through an M&A the five themes should be considered.
I concluded from the study that it is important to view change from the
employee’s perspective. When the participant was not happy with communication,
leadership, trust, resources, and corporate culture they were less engaged and satisfied.
When employees were happy with the communication, leadership, trust, resources, and
corporate culture they were more satisfied and engaged. Leadership should become more
involved in this process, and should consider employees prior to an M&A. There should
be a plan in place to lessen turmoil in the workplace. Hiring an integration specialist or an
experienced leader that has been through successful organizational change may be
beneficial. It is important to prepare for the financial aspect of an M&A, but equally as
important to prepare for the human aspect of an M&A.
