Strategies for Small U.S. Software Companies to
Reduce Merger and Acquisition (M&A) Employee
Turnover
Section 1: Foundation of the Study
Employee turnover resulting from the uncertainty due to a merger and acquisition
(M&A) may negatively impact the success of the M&As for small U.S. software
companies. Woehler et al. (2021) identified that M&As are necessary to remain
competitive but emphasized the negative impact on M&A success when losing internal
product and process knowledge. Rebner and Yeganeh (2019) specifically identified the
loss of tacit knowledge associated with voluntary turnover as a source of failure. Unless
M&As decrease in frequency, further exploration of strategies to limit turnover because
of uncertainty throughout the M&A process is necessary.
M&As involving software companies have had significant monetary valuations,
with no sign of M&As decreasing in frequency, and larger companies have always sought
out small software companies. Rebner and Yeganeh (2019) identified $65.1 billion of
M&A transactions in the U.S. between 2016 and 2019 related to major software
companies. Rebner and Yeganeh also projected increased M&A activity in the
foreseeable future. As far back as a decade ago, Phillips and Zhdanov (2013) argued the
importance of the acquisition of small companies by large companies because it
effectively outsources research and development efforts, and small companies are more
efficient than larger companies when it comes to innovation. M&A failure rates are high
and can significantly impact industry revenues, causing many problems.
Background of the Problem
M&A is necessary and not a new concept, but despite being well studied, there is
a problem because the M&A failure rate is still high. M&As have occurred for centuries
and are expected to increase over the next ten years (Rebner & Yeganeh, 2019). M&As
are necessary for companies to remain competitive in a global market, gain market share,
and increase synergy (Ghosh & Omobolaji, 2022). Loki Group Inc (2023) reported that
50%-90% of M&As are considered failures. The high M&A failure rate has existed for a
while. More than a decade ago, Marks and Mirvis (2011) argued that a high percentage of
M&As fail. Despite more than a century of available research, M&A failure remains a
problem for executive leaders. The M&A failure rate over the past decade has not
decreased significantly, and employee turnover is a reason for failure that can be
controlled, so further exploration is needed.
M&A failure can occur for many reasons, but employee turnover is a reason that
may be preventable. Fatima and Siddiqui (2021) argued that stress, satisfaction, and job
uncertainty can lead to turnover when an M&A occurs. Woehler et al. (2021) furthered
this argument by pointing out that uncertainty throughout the M&A process can result in
voluntary turnover and specifically identified the loss of critical company product and
process knowledge when an employee leaves as one of the potential causes of M&A
failure. Executive leaders in small U.S. software companies involved in future M&As
may benefit from further exploration of strategies that promote employee engagement
throughout the M&A process to reduce voluntary turnover.
Problem and Purpose
The general business problem is that executive leaders of small U.S. software
companies who do not prepare for the uncertainty caused by an M&A may experience
M&A failure because of voluntary employee turnover. M&As are necessary for
companies to remain competitive but have a high failure rate (Bhagwan et al., 2018).
Rebner and Yeganeh (2019) identified $65.1 billion of M&A transactions related to
software companies in the United States between 2016 and 2019. Failed M&As waste
billions of dollars. The specific business problem is that some executive leaders of small
U.S. software companies lack strategies that promote employee engagement throughout
the M&A process and reduce voluntary turnover. The purpose of this generic qualitative
pragmatic inquiry study was to explore strategies some executive leaders of small U.S.
software companies used that promoted employee engagement throughout the M&A
process and reduced voluntary turnover.
Population and Sampling
The population for this study consisted of executive leaders who worked in small
software companies that have undergone the M&A process and have successfully
implemented strategies that promoted employee engagement throughout the M&A and
reduced voluntary turnover. Executive leaders have decision authority and function as
chief officers or at a director level of a small software company registered as a U.S.
business. Qualifications for a small company are defined in Table 1.
Table 1
Relevant Qualifications for a Small Company (Small Business Size Regulation, 2024)
U.S. Code of Federal Regulation (CFR) title Maximum annual
revenue
(US dollars $)
Maximum number of
employees
Computer and Computer Peripheral
Equipment and Software Merchant
Wholesalers
n/a 250
Software Publishers $47M n/a
Engineering Services $25.5M n/a
Research and Development in the
Physical, Engineering, and Life Sciences
(except Nanotechnology and
Biotechnology)
n/a 1,000
Other Aircraft Parts and Auxiliary
Equipment n/a 1,250
Computing Infrastructure Providers, Data
Processing, Web Hosting, and Related
Services
$40M n/a
Convenience sampling was used for this study. When convenience sampling is
used in a study, the results cannot be generalized to the population because the
participants were not randomly selected (Theofanidis & Fountouki, 2018). Qualitative
analyses cannot be used to generalize the results to the entire population. A convenience
sample of two to five individual accounts is necessary to capture sufficient data (Yin,
2018). I obtained six participants from the available population in my study.
Nature of the Study
Multiple research methodologies enable researchers to study different aspects of a
phenomenon from specific viewpoints. Quantitative studies provide a viewpoint where
independent and dependent variables are used to identify cause-effect or correlational
relationships and apply the results to the population (Bloomfield & Fisher, 2019). On the
other hand, qualitative studies provide a viewpoint from the individual human experience,
providing rich data from successful lived experiences that can be analyzed and presented
as practical guidance (Lanka et al., 2021). Qualitative studies also allow for the
development of themes in a natural setting (Creswell, 2014). Mixed method studies are a
combination of both. I selected a qualitative methodology to continue the exploration of
successful results in natural settings. Since I was not seeking to apply the results of my
study to the population as a whole and I wanted to study individual success in a natural
setting, a qualitative study was more appropriate than a quantitative study or mixed
methods study because the intent of this study was not to obtain statistical results.
Selecting the correct qualitative design was essential.
Generic qualitative pragmatic inquiry was the selected design for my study.
Narratives are vital in business to convey problems and solutions based on lived
successful experiences (Blazkova, 2011). Yin (2018) defined the narrative as having the
goal of the results telling someone’s story or giving a sense of being involved with and
living the moment. The generic qualitative pragmatic inquiry design allowed for using
open-ended interview questions to collect data from successful experiences lived by
individuals. The intent of this study was to collect data from lived, successful
experiences. Ethnography and ethnomethodology were also considered as possible forms
of qualitative study. Yin described these as studies seeking to understand the participants'
everyday lives and normal behavior. Understanding the participants' everyday lives was
not the purpose of this study. Grounded theory involves analyzing large amounts of data
and seeing what theoretical implications may come from it instead of trying to fit the
studied data into an existing theory (Glaser & Strauss, 1967). Developing theories was
not the purpose of this study.
Research Question
What strategies do some executive leaders of small U.S. software companies use
that promote employee engagement throughout the M&A process and reduce voluntary
turnover?
Interview Questions
The following questions were asked during the participant interviews. See
Appendix B for the interview protocol and followup questions.
1. What experience(s) have you had leading companies through the merger and
acquisition (M&A) process?
2. Why do you think employees voluntarily leave a company during the M&A
process?
3. What strategy or strategies did you use to promote employee engagement
throughout the M&A process, and why were they effective?
4. Why do you think the strategy or strategies you used to promote employee
engagement make your employees feel supported by the company during the
M&A process?
5. Reflecting on your strategy for employee engagement, what part of your
strategy do you think had the most effect on voluntary turnover throughout the
M&A process?
6. What strategy or strategies have you used to reduce voluntary turnover
throughout the M&A process?
7. Reflecting on your strategy to reduce voluntary turnover, what part of your
strategy do you think had the most effect on voluntary turnover throughout the
M&A process and why?
8. What important lessons have you learned about strategies to promote
employee engagement throughout the M&A process?
9. What important lessons have you learned about strategies to reduce voluntary
turnover throughout the M&A process?
Conceptual Framework
Perceived organizational support (POS) was the conceptual framework for this
research. POS is rooted in organizational support theory founded by Eisenberger et al.
(1986). When there is POS, employees will reciprocate (Eisenberger et al., 1986). The
benefits of POS were substantiated recently in a model developed by Degbey et al.
(2021). The logical connections between the framework presented and the nature of my
study included POS, employee engagement, employees exhibiting behaviors beyond
normal job expectations, and turnover. Uncertainty during the M&A process could lead
to voluntary turnover (Fatima & Siddiqui, 2021). If employees go above and beyond and
remain engaged during times of uncertainty throughout the M&A process, they may
decide against voluntarily leaving the company. Voluntary turnover may result in losing
the knowledge base originally sought when the M&A was envisioned. Woehler et al.
(2021) argued that uncertainty of the M&A could result in the loss of tacit company
knowledge through voluntary turnover. I selected POS because I was able to identify
attributes related to employee engagement, employees going above and beyond, and
turnover to successfully conduct a literature review to help with my study to explore
strategies some executive leaders of small U.S. software companies use that promote
employee engagement throughout the M&A process and reduce voluntary turnover.
Operational Definitions
The following terms are used operationally in this study. The definitions in this
section are included for two reasons. The first reason is to ensure there is no ambiguity
with common terminology. The second reason is to ensure that a reader who is not a
subject matter expert can understand terminology not typically used in everyday
language.
Merger and acquisition: Tanna et al. (2020) described M&A as the union of two
companies with the intent to be operationally stronger than either by themselves (merger)
or the absorption of one company’s operations by another company to diversify or
strengthen its market position (acquisition).
Perceived organizational support: Perceived organizational support (POS) is
when an employee feels supported and valued by the company or an organization within
the company (Eisenberger et al., 1986).
Production deviance: Nguyen and Huang (2022) described production deviance
as counterproductive work behaviors that are passively implemented and harm the
company.
Psychological contracts: Knapp et al. (2020) described psychological contracts as
a belief by the employee of what the company should provide the employee and
viceversa.
Synergy: Synergy is a notional term identifying a situation where the post-M&A
company has more financial or perceived operational value than if the two companies
maintained independent operations; the sum is greater than the parts (Rebner & Yeganeh,
2019).
Work engagement: Ashgar et al. (2021) described work engagement, or simply
engagement, as being energetic toward your job to the point where you enjoy it and
become highly involved and dedicated.
Assumptions, Limitations, and Delimitations
Assumptions are theoretical beliefs used when the data collected in a qualitative
study cannot be broken out into singular variables that represent exact quantities (Lanka
et al., 2021). Limitations are study elements that identify weaknesses because they are not
in the researcher’s control (Theofanidis & Fountouki, 2018). Delimitations are elements
included in the study that are under the researcher's control (Coker, 2022).
Assumptions
The assumptions for this qualitative generic pragmatic inquiry study include the
following:
1. It was assumed that participants would answer truthfully. When soliciting
potential participants, the study was presented in a positive context, and there
were details regarding the measures taken to protect their identities. This was
done to avoid a situation in which the interviewee felt compelled to be less
than truthful to protect their identity or provide scaled-back versions of their
response to protect a company’s identity.
2. It was assumed that participants answered the interview questions without
bias or ulterior motives. The results may be skewed if a participant believes
the interview was an opportunity to seek revenge or vent anger. Likewise, if a
participant thought they figured out the intended outcome of the study, they
might have formulated answers to support a supposed conclusion. To mitigate
bias, the interview questions were designed to solicit participant’s reflection
on the success of their actions, and the participants were made aware that the
nature of the study is the exploration of the topic, not a case study specific to
the company they worked, or work, for.
3. It was assumed that the participants’ answers were not skewed due to cultural
differences, and Hofstede’s (1980) cultural dimensions did not need to be
included in the analysis. To mitigate bias, interview questions were designed
to avoid responses that could differ based on cultural bias.
Limitations
The first limitation of this qualitative generic pragmatic inquiry study was the
small sample size based on direct and indirect contacts based on my LinkedIn and email
network. The second limitation of this study was the inability of a qualitative study to be
generalized to the larger software industry. Qualitative analysis is limited to the specific
instance being studied since there are limited participants (Yin, 2018). The number of
participants willing to participate and their specific experiences and breadth of knowledge
are out of my control.
Delimitations
In this qualitative generic pragmatic inquiry study, the first delimitation was the
limitation that I explored only executive leaders of small U.S. companies who
successfully implemented strategies to reduce M&A turnover in the software industry. I
did not consider executive leaders in other industries as participants. Excluding
participants from other industries and limiting participation to executive leaders of small
U.S. software companies limits the ability to generalize my results and apply them on a
broader scale.
Significance of the Study
This study is significant in that voluntary turnover throughout the M&A process
may lead to an unsuccessful M&A, resulting in additional job loss and a decrease in
revenue for the local community if the company goes out of business or the local office is
shut down. M&As are necessary for companies to remain competitive but have a high
failure rate (Bhagwan et al., 2018). Rebner and Yeganeh (2019) identified $65.1 billion
of M&A transactions related to technology companies between 2016 and 2019 in the
United States; however, V. Sharma and Mareja (2016) argued that over 65% of M&As
are considered failures. That is over $40 billion of wasted spending. Rebner and Yeganeh
specifically identified the loss of tacit knowledge associated with voluntary turnover as a
source of failure. The data and analysis provided in my study may help future M&As
succeed, reduce wasted spending resulting from voluntary turnover, and help the
surrounding community realize the benefits of jobs and income from the post-M&A
company remaining competitive.
A successful M&A might lead to positive social change by providing a valuable
opportunity to the community through job creation, which can improve the robustness of
the local economy. Additionally, with the increase in jobs and stability, there may be an
increase in volunteerism and community outreach, which, in turn, enhances the lives of
those living in the surrounding community.
A Review of the Professional and Academic Literature
The narrowed focus of this study was on employee engagement and turnover
based on POS. Strategies to reduce voluntary turnover may help reduce the loss of
proprietary knowledge because tacit knowledge needed to realize the full potential of the
M&A would remain in the company. The remainder of the literature review is organized
into five parts. The first part identifies the literature search strategy being used. Parts 2
through 5 contain a synthesis of literature from journals to provide context for this study.
The second part is a section that provides an overall context for the specific topic of
M&As. Parts 3 through 5 contain an analysis of the literature for POS, POS and its
influence on employee engagement, and the influence of employee engagement on
voluntary turnover.
Literature Search Strategy
The literature cited in this study is peer-reviewed, scholarly studies obtained from
the Walden University Libraries and Google Scholar. The majority of the literature,
approximately 86%, should have been articles from peer-reviewed journals published
within years of my graduation date. The literature review includes citations of 60
peerreviewed scholarly articles; 51 of the 59 were younger than 5 years old. The other
nine were beyond 5 years old. 83% of the peer-reviewed articles used for this literature
review were current.
The primary search filter used was to limit the search results to peer-reviewed
journal articles between 2020 and 2023. When I found relevant literature in reference
sections of extant research, specific journal articles, books by seminal authors, and
scholarly writings by theorists, I queried that material using the article title, author, or
web address as necessary to locate the item. Scholarly data in the search results came
from Academic Search Complete, CINAHL Plus with Full Text, Business Source
Complete, Computers & Applied Sciences Complete, Complementary Index, Directory
of Open Access Journals, Emerald Insight, ERIC, IEE Xplore Digital Library, and
Science Direct databases.
In the literature review, I reviewed extant literature for relevant data for some
executive leaders to successfully manage uncertainty throughout the M&A process and
potentially reduce voluntary turnover. I reviewed literature about M&A turnover, the
benefits from employee engagement, M&A failure rates, and uncertainty throughout the
M&A process because of changes to organizational and work environments throughout
the M&A process. The literature review incorporated searches with the following search
phrases: M&A failure, mergers and acquisitions, M&A communication, M&A support,
organizational support, organizational citizenship behaviors, perceived organizational
support, perceived organizational support, POS, M&A turnover, employee engagement,
turnover intention, intention to leave, intention to quit, attrition, software, information
technology, and technology M&A. I also applied “AND” and “OR” logical operators to
create different permutations to refine search results.
I analyzed all search results by reading the abstract body, looking at the list of
keywords, reading the research questions or hypothesis, and reading the conclusion to
determine if the scholarly work was relevant to this study based on my expertise as a
software developer in the technology industry. I stored relevant articles and search-result
data in a self-created Microsoft Access database. To assist with database queries, I
assigned data entries high-level attributes to identify them as being related to broad
categories of work engagement, performance/financial, human resource management,
POS, turnover, financial failure, and organizational failure.
Mergers and Acquisitions
Software companies need to grow through M&A events to remain competitive,
but losing valuable tacit knowledge through voluntary turnover adversely affects the post-
M&A company and may be preventable. A recent trend for M&As is for global
competition, but post-M&A companies usually fail (Rebner & Yeganeh, 2019).
Uncertainty in the M&A process can cause voluntary turnover and the loss of core
competencies and proprietary knowledge (Woehler et al., 2021). Strategies to help some
executive leaders prepare for uncertainty during the M&A process to reduce voluntary
turnover and contribute to M&A success are needed.
A successful M&A with minimal voluntary turnover should be a foregone conclusion
since data from M&A experiences over centuries exists. Most M&As over the past
century failed to meet post-M&A financial and performance expectations, and voluntary
turnover was one of the reasons for these failures (Rebner & Yeganeh, 2019). Losing
employees with software skills through voluntary turnover can result in a loss of revenue
for companies (Farooq et al., 2022). Despite data from occurrences over the past century
being available, post-M&A companies still fall short of their potential revenue targets
and are thus considered failures. Voluntary turnover is an essential factor that contributes
to M&A failures. Some executive leaders lack the strategies needed throughout the
M&A process to prepare for uncertainty and reduce voluntary turnover.
Uncertainty exists during an M&A because updated organizational structures, job
responsibilities, expectations, and benefits are not finalized. Lack of employee
engagement in a software company during periods of uncertainty can cause voluntary
turnover and the company to lose tacit knowledge, affecting growth potential
(MéndezOrtega & Teruel, 2020). Stress, job insecurity, and anxiety can indirectly affect
turnover throughout the M&A process (Fatima & Siddiqui, 2021). Companies
undergoing an M&A event have existing strategies to help employees cope with change.
However, further exploration is needed into strategies that reduce voluntary turnover by
promoting employee engagement where employees help each other through the
uncertainty of the
M&A.
Employees of software companies need to work with each other beyond what is
expected in their daily job activities since the M&A process creates more stress and a
potentially abnormal working environment. Employees in the technology industry are
predisposed to a high rate of burnout and work exhaustion, leading to voluntary turnover
(Zaza et al., 2022). Voluntary turnover may be reduced when employees engage with
their new coworkers by creating a social network (Woehler et al., 2021). Throughout the
M&A process, employees of software companies experience additional stress and leave
the company since job requirements and peer-to-peer interactions in the new company are
unknown. Creating a communication channel throughout the M&A process may enable
new peer relationships to develop sooner, allowing employees to be engaged by helping
each other, which may reduce voluntary turnover caused by work exhaustion and
burnout.
Uncertainty throughout the M&A process can negatively affect employee
perceptions of the company. Executives that do not have strategies that consider changes
of assumptions and unspoken expectations, a psychological contract, between the
employees and the post-M&A company may see a decrease in employee engagement and
more desire to leave the company (Sandhya & Sulphey, 2021). If executive turnover
occurred, employees were more likely to voluntarily leave the company than if executives
remained (Martin et al., 2017). Specific details of the M&A and whether executive
management changes must remain hidden from the employees for competitive reasons,
but the effects on engagement and voluntary turnover cannot be ignored. Executive
leaders need strategies to intervene to keep employees engaged to avoid voluntary
turnover because of uncertainty as the result of the necessary withholding of information
to allow employees to develop new psychological contracts.
Strategies rooted in organizational support theory can be beneficial to reducing
voluntary turnover because of uncertainty throughout the M&A process. Employees who
perceive support from the company are more likely to increase their level of engagement
(Ding et al., 2020). Person-supervisor fit, a form of POS where employees are
comfortable with their supervisor, positively affects employee engagement (Guay et al.,
2019). Job uncertainty always exists, but it peaks during the M&A process. The M&A
process is a transitory period where the employees may not be willing to stay engaged
and help support the company during times of uncertainty unless they feel like the
company is reciprocating supporting for them.
Employees who feel secure, connected, and supported by the company are more
likely to be engaged and exhibit favorable work behaviors like helping each other beyond
what their job requires. Sung et al. (2017) argued that M&A creates organizational
conflict and decreases an employee’s perception of job security. Sung et al. also argued
that employees may feel disconnected because of changes in the work expectations once
the M&A is complete. Singh and Srivastava (2016) identified a relationship between
work expectations, M&A communication, and POS. Neither of the two studies focused
on strategies to promote employee engagement or employees going above and beyond to
help each other out. Further exploration into strategies to prepare for uncertainty
following and M&A is needed.
Executive leaders who focus on financial gain during the M&A instead of
employee support may observe employees exhibiting work behaviors unfavorable to
M&A success or resulting in a loss of tacit knowledge. Prioritizing financial benefits at
the employees' expense can result in M&A failure (Anuku, 2020). Employees who feel
supported by leadership tend to exhibit more innovative behaviors at work (Zaman et al.,
2020). It is normal to expect an M&A to realize an increase in revenue. Making financial
gain the focus and neglecting the importance of the employees throughout the M&A
process could result in voluntary turnover and a loss of tacit knowledge or innovation.
Executive leaders need to ensure tacit knowledge and innovative ideas are documented,
or voluntary turnover may cause the company to lose the tacit knowledge or the
innovative environment that was the impetus for M&A.
Executive leaders need to consider the retention of tacit knowledge in M&A
strategies but documenting tacit knowledge may not be the only key to M&A success.
The initial positive effects of knowledge transfer during the early phases of the M&A
process rapidly declined as the M&A process continued (Méndez-Ortega & Teruel,
2020). Méndez-Ortega and Teruel (2020) argued that social networking between the two
companies was a critical factor in M&A success. Retention and transfer of tacit
knowledge from both companies throughout the M&A process is necessary. However,
even if employees are engaged, the documentation of tacit knowledge is not likely to be
the key to a successful outcome without certain employees. Skilled employees who
understand the tacit knowledge must stay with the post-M&A company and transfer their
knowledge to new peers.
Skilled employees capable of applying retained tacit knowledge are equally
important in the M&A process. Executive leaders need to ensure talent is retained
throughout the M&A process by having talent management strategies to ensure new
psychological contracts are developed. Key resources have positive perceptions of the
changes to their day-to-day work activities (Holland & Scullion, 2021). Positive,
proactive communications instead of reactive communications can alter the perception of
changes introduced during the M&A process (Harikkala-Laihinen, 2022). Executive
leaders may need individual strategies to target specific resources to control voluntary
turnover by employees in a specific department or who have a specialized skill set needed
to ensure the post-M&A company succeeds. Employee communication networks for
dayto-day activities may help in implementing strategies that include talent management.
Communication networks between employees may be determining factors in
voluntary turnover. Effective communication channels can decrease voluntary turnover
(Bansal & King, 2022). Woehler et al. (2021) specifically identified reduced voluntary
turnover when the employees created a social network. It is important to create
communication channels that the employees of the different, merging companies can use.
However, a communication channel's physical existence is insufficient to ensure success.
Effectively using the communication channels for tacit knowledge transfer
requires employees to be engaged and to stay employed with the post-M&A company.
The M&A process is inherently stressful, and when employees do not feel supported by
the company, job satisfaction decreases, and adverse performance outcomes are observed
(Giessner et al., 2023). A perceived lack of support by the company can foster negative
emotions and lead to an environment where employees are not amenable to change
(Harikkala-Laihinen, 2022). POS is foundational for employee engagement throughout
the M&A process. POS is also critical for ensuring that voluntary turnover during an
M&A event is reduced or eliminated.
Perceived Organizational Support
Executive leaders need to ensure employees positively perceive the company
throughout the M&A process when changes occur, or employees may voluntarily leave.
Tacit knowledge may be lost, negatively affecting the outcome of the M&A. There is a
high likelihood that voluntary turnover would increase if employees felt the company
lacked integrity (Bari et al., 2022). The perception of engagement between the company
and employees during the M&A process is as vital to the employee as the content of the
information exchanged (Harikkala-Laihinen, 2022). Logically, when a company has a
blatant violation of integrity and trust, employees tend to leave. However, some executive
leaders do not understand the importance of employee perceptions of integrity and
support to voluntary turnover.
Ensuring voluntary turnover is eliminated or reduced during an M&A event
requires POS. Three studies specifically supported organizational support theory and
identified a relationship between POS, employee engagement, and employee turnover.
Côté et al. (2020) used effort-recovery theory and performed a quantitative study to
identify how POS and employee engagement worked together to strengthen job
satisfaction but used effort-recovery theory as the foundational theory. Ashgar et al.
(2021) created a model that identified the importance of POS on turnover. Degbey et al.
(2021) used person-organization fit and organizational support theory as theoretical
foundations for a quantitative study to identify the importance of POS on turnover.
Ashgar et al. specifically identified the need for further studies on POS and turnover.
These three studies identified the need to use organizational support theory as the
foundational theory and provide further exploration of POS and its effect on employee
engagement and turnover.
Executive leaders need to manage organizational change during the M&A. During
the M&A process, employees encounter organizational changes in addition to changes in
their day-to-day work activities (Syed et al., 2020). The degree of change can affect
employee retention (Degbey et al., 2021). Employees can feel overwhelmed by
uncertainty caused by changes occurring during the M&A process. Executive leaders
need strategies to ensure employees feel confident that the company supports them during
current and future changes, or they may voluntarily leave.
Uncertainty is guaranteed throughout the M&A process, and employees must
perceive explicit and implicit support from the company. Bansal and King (2022) found a
significant relationship between communicating how the company made decisions and
voluntary turnover. Bari et al. (2022) argued that even though a company corrected the
breach of a psychological contract —an implied contract—it was challenging to achieve
the previous level of support in the previous contract. The M&A process is complex and
requires a company to show implicit and explicit support for their employees during the
M&A process. Bansal and King and Bari et al. provided invaluable insight into explicit
and implicit employee needs but did not provide enough information to identify strategies
executive leaders could use throughout the M&A process to reduce voluntary turnover.
Identifying a relationship between variables is not sufficient to know what strategy is
needed to ensure POS by employees.
Knowing about uncertainty and when to manage it is crucial to the success of the
M&A. The short-term performance of the post-M&A increases in value when an M&A
occurs where the acquiring company is seeking to improve performance by acquiring a
company outside of its core competency (Irwin et al., 2022). Uncertainty still exists, and
it is imperative to understand the complex relationship between uncertainty and the
“questions of what (is being observed), how (to know and respond) and who (adds
meaning)” (de Roo, 2021, p. 90) to manage it. If the M&A involves one company
acquiring another to increase their core knowledge or competencies, the post-M&A
company is not as profitable or successful if the tacit knowledge in the acquired company
does not exist because of voluntary turnover. Executive leaders need strategies to reduce
voluntary turnover and ensure the post-M&A company retains tacit knowledge.
The environment of uncertainty differs between M&A events and between
different phases of the M&A process. Flexible strategies are needed to reduce voluntary
turnover, and constant re-evaluation is needed. Environments consist of circumstances,
certainty, and situations ranging from ordinary to chaotic (Irwin et al., 2022). Knowing
that a spectrum of uncertainty exists and identifying the complexity as circumstances
change is critical to dealing with reality (de Roo, 2021). There is relative certainty when
observable actions and experiences are part of defined processes and procedures.
However, there is a high degree of uncertainty when the situation is complex or
circumstances are chaotic. The future expectations during the M&A process are either
unknown, or executive leaders have signed an agreement and cannot disclose the details.
Strategies to deal with uncertainty are essential, and executive leaders may need to
change these strategies to adapt to changing circumstances as the M&A progresses.
Executive leaders employing strategies that address POS may be critical to
employee engagement. Organizational support theory identifies a relationship between an
employee’s willingness to engage and perform and their perception of how the company
views and values them (Eisenberger et al., 1986). When employees perceive that the
company values them, they will reciprocate. Employee engagement and job satisfaction
increase when POS is high (Côté et al., 2020). POS is critical to ensuring employees
remain engaged and work to their full potential. There are many benefits to a company
when employees perceive an environment of support by their company.
One crucial attribute of POS for an M&A event is employee engagement through
performance. Employees tend to use their strengths to their fullest potential and increase
their performance when they feel supported by the company (Ding et al., 2020). M&A
events can improve employee productivity (Hassan & Lukman, 2020). It is optimal for
employees to be fully engaged and continue to work at their peak performance to
counteract uncertainty throughout the M&A process. Employee engagement and POS are
essential to reduce employee turnover because of uncertainty throughout the M&A
process.
Executive leaders need to be aware of the importance of POS on employee
engagement and voluntary turnover. Bhaskar and Mishra (2019) provided evidence of a
relationship between POS, employees feeling they were doing meaningful work,
employees’ sense of community with their peers, and turnover intention. A unique
finding by Bhaskar and Mishra was that an employee’s spirituality and self-interest
helped determine whether they would reciprocate support for the organization. Bhaskar
and Mishra argued that employees may appreciate company support but still decide to
leave voluntarily because of their individual values and beliefs. This differs from the
findings by Côté et al. (2020) and Ding et al. (2020) that identified an increase in
employee engagement when the company was the source of POS. Executive leaders may
need to know the core values of their employees and develop unique strategies tailored to
individual employees to ensure POS is continuous throughout the M&A process.
A benefit of having an environment of POS throughout the M&A process is that
employees show their allegiance to the company by performing above and beyond the
minimum expectations required for their job duties. Bateman and Organ (1983)
characterized these acts of allegiance as organizational citizenship behaviors (OCBs).
Bateman and Organ used “citizenship” to characterize implicit employee behaviors that
may benefit a company but cannot be necessary for employment. Examples of citizenship
behaviors include helping co-workers with a job-related problem; accepting orders
without a fuss; tolerating temporary impositions without complaint; helping to keep the
work area clean and uncluttered; making timely and constructive statements about the
work unit or its head to outsiders; promoting a work climate that is tolerable and
minimizes the distractions created by interpersonal conflict; and protecting and
conserving organization resources (Bateman & Organ, 1983, p.588)
Even when employees may distrust others, they practice OCBs favorable to the company
(Koo & Lee, 2022). When employees perceive that the company supports them, they are
more satisfied with their job and are willing to commit to the company.
Employee satisfaction from POS can have many benefits for software companies.
Özkan (2022) studied the information technology (IT) industry —including software
companies— and found POS increased job satisfaction, organizational commitment, and
reduced turnover intent. The researcher found that organizational commitment had the
most influence on turnover intention. Employees reciprocate if they feel supported by the
company (Eisenberger et al., 1986). Combining organizational support theory and results
by Özkan (2022) implies that employees feel supported by the company and are less
likely to leave voluntarily if observed practicing OCBs. POS is linked to several positive
characteristics, such as engagement and organizational commitment. Executive leaders
need to understand the benefits of employees reciprocating support and what strategies
lead to employee engagement and reduced voluntary turnover.
Employees of software companies have unique considerations regarding the
meaning of POS. Weerasekara and Smedberg (2023) argued that companies must provide
stress management interventions for the well-being of the employees. Weerasekara and
Smedberg identified the need to enable personal and collaborative spaces for employees
of software companies to reach out to peers and third parties for stress management.
Offering personalized social support to employees directly and positively affects
voluntary turnover (Syed et al., 2020). Software company employees work in high-stress
environments with tight deadlines, and because many may be remote workers, there may
be minimal contact with others. Social support is unnecessary for software company
employees to complete their daily tasks and may not be considered by the company
during the M&A process. Software company employees work in a stressful environment,
and executive leaders need strategies focusing on the mental well-being of individuals
during the M&A process.
Employees can perform differently if corporate social responsibility provides the
perception of company support. Aboramadan and Karatepe (2021) argued that employees
practiced OCBs that benefitted the company when human resource management aligned
with the company's social responsibility goals. Zhang et al. (2022) identified negative
financial implications when stakeholders perceived a discrepancy between the acquiring
company’s actions and espoused corporate social responsibility goals when a hostile
takeover occurred. Employees are financial stakeholders and may voluntarily leave the
organization when there is a discrepancy between internal and external actions
concerning social goals. Executive leaders may need to consider the type of takeover
occurring when developing strategies to ensure employees feel the company’s actions
during the M&A process align with espoused social responsibility goals.
Perceived Organizational Support Influence on Employee Engagement
Employees may be required to reciprocate positive actions in the form of
employee engagement in an environment in which the employees perceive they are
important to the company. An M&A creates a complex environment, and ignoring the
human side of the employees can lead to failure (Rebner & Yeganeh, 2019). G. G.
Sharma and Stol (2020) argued that relationships and engagement between peers and
management in the software technology field were built over time, and fostering a
relationship leading to employee engagement begins as early as their first day of work.
Concentrating on what should be happening instead of observing what is happening
harms the relationship between employees and the company. During the early phases of
an M&A, an employee who has worked for the company a long time is the same as an
employee starting a new job because of the uncertainty of what working in the post-M&A
company is like. Maintaining an environment of employee engagement is critical to
M&A success.
Employees who feel supported by the company may reciprocate and do their best
job by actively engaging in their day-to-day work activities. Jin and Tang (2021)
discovered that for employees in a highly competitive job environment, POS significantly
affected employee engagement in their day-to-day work activities. Similarly, Ding et al.
(2020) found that employees were likelier to apply their strengths when completing their
day-to-day work activities if they felt the company valued them. An employee willfully
applying their strengths is a form of engagement. Software is a highly competitive field in
the technology industry, and employees can benefit the company in many areas when
engaged.
Internal perceptions can adversely affect an employee’s willingness to engage
even when companies exhibit external signs of support. Employees tend to use their
strengths and work to their fullest potential when they observe actions in the company
indicative of support (Ding et al., 2020). In contrast, employees may engage in
production deviance by purposely limiting their output to levels below their potential
when they perceive decisions and actions as results of organizational politics (Rizal et al.,
2023). Outward appearances of support through actions are insufficient to keep
employees engaged and productive. Executive leaders must communicate who is making
decisions and why, or employees may disengage and purposely perform their day-to-day
work activities incorrectly or less than their capabilities. Production deviance can be
devastating during uncertainty in the M&A process when employees should be engaged
and helping disseminate tacit knowledge.
Perception of company support through communication is needed to facilitate
employee engagement. However, open communication strategies alone may not be
sufficient to keep employees engaged during the M&A process. Verčič et al. (2023)
argued that satisfactory communication was vital to creating an environment of POS,
strengthening the employees’ psychological contract, and increasing employee
engagement. In contrast, Lee and Shin (2023) argued that conventional strategies of
effective communication channels between the organization, supervisor, and employee,
when combined with favorable employee policies —like the ability to work at home— do
not always result in employee engagement. Lee and Shin studied employees working
remotely and those in the office and found that employee engagement was not affected
when a favorable work-life balance existed. Employee engagement that benefits the
company is not always guaranteed because communication channels are open and active.
Strategies that include sufficient communication channels may need to be supplemented
with strategies that encourage employee-to-employee interactions where employees help
each other out when working through times of uncertainty during the M&A process.
Achieving POS and employee engagement for employees working in a software
company in the technology industry can require strategies beyond traditional
communication strategies. Rapidly changing hardware and software environments can
lead to employee burnout and subsequent exhaustion and ultimately voluntary turnover if
there is no perceived support from leadership and special consideration is not given to the
needs of individual IT employees (Zaza et al., 2022). Harikkala-Laihinen (2022) argued
that employee participation in the change process and communication strategies resulting
in a positive emotional state were crucial for improving employee engagement. Software
development in the technology industry is inherently stressful and can be emotionally
draining. The M&A process can create a chaotic environment that adds more stress and
reduces POS and employee engagement.
Employee engagement through the OCBs of helping co-workers with a jobrelated
problem without expecting anything more in return (altruism) and being disciplined by
ensuring work assignments are completed thoroughly and correctly (conscientiousness)
are two key contributing factors that increase POS and employee engagement. Adame
and Bisel (2019) argued that the impression executive leaders make on employees
through strategic messaging impacts whether individual employees actively practice
OCBs. Makhdoom et al. (2019) found that it is essential to ensure employees do not
perceive the organization has an environment rich in organizational politics if they want
employees to engage in non-required work functions, e.g., voluntarily presenting
information during informal training sessions to help each other out. Messaging is an
integral part of strategies for executive leaders if they expect to have employees be
engaged throughout the M&A process. The perception of messaging is critical to
practicing OCBs needed to facilitate employee engagement throughout the M&A process,
a time of maximum uncertainty.
The OCBs of altruism and conscientiousness can be important to employee
engagement. Employee perceptions of the organization influenced employee performance
and the OCBs of civic virtue, conscientiousness, and courtesy (Makhdoom et al., 2019).
The OCB of conscientiousness has been predicted by POS when viewing OCBs through
the lens of person-supervisor fit (Guay et al., 2019). These two studies covered the
benefits of conscientiousness but neglected the OCB of altruism. The studies did not
explore, in-depth, the strategies needed throughout the M&A process to encourage the
practicing of OCBs of altruism and conscientiousness to facilitate employee engagement
during times of uncertainty during the M&A process.
The culmination of job satisfaction, accountability, and POS may foster employee
engagement during times of uncertainty. During the high uncertainty during COVID-19,
relationships between employee perceptions of being valued by the company and job
satisfaction in small businesses significantly impacted work engagement (Uludag et al.,
2023). Employees who observe accountability at work and are satisfied with their jobs
remain engaged (Im, 2022). Employees of small software companies experience much
uncertainty, and it is imperative that the employees feel like they are just as important as
the customers they supply. Executive leaders need to develop strategies that treat
employees as equals but hold them accountable if they want an environment of POS.
Employee engagement strategies are needed because uncertainty remains
throughout the entire M&A process. Lack of leadership, communication, and
collaboration between different departments within the merging companies may create a
communication deficit, leading to confusion regarding new roles in the post-M&A
organization (Yahiaoui et al., 2016). Feldman and Hernandez (2022) emphasized the
importance of eliminating the confusion caused by uncertainty and argued that the total
value of the M&A cannot be achieved without internal synergy. To ensure there is
synergy throughout the M&A process, employees must go above and beyond to work
together during maximum time of uncertainty throughout the M&A process. The OCB of
altruism (employees going above and beyond what is required for employment) is critical
for employee engagement. Executive leaders who want to reduce or eliminate voluntary
turnover successfully through employee engagement need to know how to internally
market the OCB of altruism since it is beneficial throughout the M&A process.
Perceptions of leadership and their observable actions are essential to employee
engagement and the OCBs of altruism. Individual department leaders who create an
inclusive work environment can increase job satisfaction, which positively relates to
employee engagement (Im, 2022). Leaders who build trust with employees can influence
the practicing of OCBs by employees (Singh & Srivastava, 2016). When executives are
perceived as being trustworthy and caring about the employees, the employees are more
likely to be willing to engage in the workplace by going above and beyond the minimum
expectations for their job (altruism). When executive leaders engage and go above and
beyond what is expected, that can foster an environment where more employees feel
supported by the organization and reciprocate by helping each other complete their tasks
when they are not required to.
The OCB of altruism is necessary when there is uncertainty throughout the M&A
process. POS influences altruism and affects employee engagement. M&As can increase
the levels of stress and anxiety and reduce employee commitment (Ribando & Evans,
2015). When transformational leaders used purposeful strategies to ensure the M&A
process was inclusive of employees, teamwork increased in the post-M&A organization
(Vasilaki et al., 2016). If altruism is practiced, employees serve each other, are more
interested in teaming together to create a positive outcome, and, as a result, may be more
engaged with their daily work activities.
The practice of altruism, or any OCB, does not guarantee employee engagement.
Even though an organization may have exhibited an abundance of OCBs associated with
M&A success, employees may exhibit aggressive behaviors when executive leaders are
perceived as involved in organizational politics (Makhdoom et al., 2019). Makhdoom et
al. (2019) hypothesized that more POS would result in more practicing of the OCB of
conscientiousness and less production deviance. However, they failed to prove this using
quantitative study and social exchange theory. These studies show that employees can
practice the OCB of conscientiousness, but something is missing to keep them from fully
engaging. Employees may practice conscientiousness because that is who they are, but
POS is what it takes to be fully engaged and lessen the likelihood of voluntary turnover.
Further exploration of strategies rooted in POS that promote the OCB of altruism and
conscientiousness throughout the M&A process is needed.
A company involved with an M&A event benefits greatly when employees
remain engaged even when they are not feeling optimal (i.e., presenteeism) because of
the stress related to uncertainty throughout the M&A process, but doing this discourages
employees and prevents them from fully engaging. Côté et al. (2020) argued that when
employees are not given sufficient time to recover from a situation that is either
physically or mentally stressful for them, there can be adverse effects on their work
performance and a decrease in job satisfaction. The lack of strategies in the workplace
that promote job or career satisfaction can be detrimental to employee engagement and
ultimately lead to voluntary turnover (Bhaskar & Mishra, 2019). Uncertainty throughout
the M&A process can create an environment where employees likely feel they need to
push through physical illness, stress, and anxiety for the company's good. Executive
leaders need to recognize this possibility and implement strategies to make the employees
feel supported by the company and give them sufficient time to recover from times of
maximum uncertainty during the M&A process.
Employee Engagement Influence on Voluntary Turnover
Understanding reasons for voluntary turnover can lead to better strategies to
promote employee engagement and reduce voluntary turnover throughout the M&A
process. Welch and Brantmeier (2021) argued that supervisor and executive leadership
support and income were consistently in the top four reasons for employees to leave an
organization. In contrast, Mitravinda and Shetty (2022) argued that job satisfaction,
income, and overtime were the top reasons for voluntarily leaving a company. Employees
working for software companies typically work overtime because of schedule pressures.
The M&A process usually results in more work since additional tasks are required
throughout the M&A process, but not all software companies pay employees to work
overtime. Further exploration of strategies that some executive leaders in software
companies used to successfully balance the need to be compensated for working and
simultaneously have a supportive work environment is needed.
Executive leader behavior and perception of support affect employee engagement
and voluntary turnover, but that is not always the case. Guay et al. (2019) identified the
relationship between leaders practicing the OCB of conscientiousness, person-supervisor
fit, and the intent to leave the company voluntarily. Ashgar et al. (2021) noted that
identifying POS is necessary to ensure employees perform optimally. These studies
clarify that POS increased extra-role behavior and lowered turnover intent in
environments requiring the ability to multitask. However, these studies were quantitative
and only provided the identification and relative strengths between variables that affected
turnover. Employees of software companies must multitask by engaging in their day-
today work activities while working with software bugs and other issues identified by
customers. Some executive leaders need to understand better strategies to promote POS
and ensure employees remain engaged and do not voluntarily leave during the M&A
process.
Executive leaders of software companies need to consider the benefits POS has on
employee engagement and voluntary turnover when additional stress is introduced by the
uncertainty created through the M&A process. Zaza et al. (2022) supported the
importance of POS on employee engagement with their findings that POS positively
influenced employees’ intentions to voluntarily leave their current job or the IT industry
even though an environment of work exhaustion existed. Giessner et al. (2023) found that
mid-level management can help relieve the job dissatisfaction employees may experience
during an M&A. Mid-level managers can positively influence outcomes. However, small
software companies do not usually have mid-level managers. During an M&A, executive
leaders need to develop strategies that include sufficient communication to make
employees feel included and ensure they receive similar perceptions of support
experienced during times of uncertainty when mid-level managers are included in the
organizational structure.
The rate changes made during the integration phase of the M&A are essential for
employee engagement, and how rapid changes are made could depend on who is
involved. The resistance level to the speed at which changes are made varies depending
on who is involved (King et al., 2020). When leaders are minimally involved, employees
prefer a slower rate of change, but when mid-level and executive leaders are involved
with the changes, the rate of change can be increased. When the company’s employees
trust the acquiring company's executive leadership, they remain engaged (Tian et al.,
2021). Many changes made during the integration phase of the M&A and the rate at
which changes are made can adversely affect employee engagement. Strategies to
promote employee engagement during times of uncertainty need to consider who is
involved with the changes and the rate at which the changes are being made.
Trustworthiness is a trait that can influence employee engagement. Thomas and
Passmore (2021) identified the willingness of employees to entertain coaching if they
perceived the company as being open and honest about the M&A. Koo and Lee (2022)
argued that strategies to mitigate natural distrust that some employees positively
influenced organizational commitment and the practicing of OCB of conscientiousness,
work behaviors that are more favorable to the company. Leaders perceived as trustworthy
can foster an environment of POS where many employees accept strategies, even those
naturally skeptical about the motives of executive leaders and the company throughout
the M&A process. Employees who trust the company and its leadership may be more
willing to help each other during times of uncertainty.
The importance of communication and POS on employee engagement is
wellunderstood, but the technology industry has unique considerations because it is
fastpaced. Harikkala-Laihinen (2022) argued that information exchange between
executive leaders and employees predicts employee engagement. Syed et al. (2020)
identified increased job satisfaction and decreased turnover intention when employees
perceived social support from the organization when their fears and anxieties about the
M&A were addressed. Strategies that help executive leaders in software companies
prepare for the uncertainty following an M&A must include an information exchange
where sufficient company communication is directed to the employees, and the
employees can communicate their social and emotional concerns. Small companies have
unique challenges with M&As and turnover. The lack of POS can cause employees to
become disengaged and voluntarily leave the organization, removing tacit knowledge
valuable to the company.
Small software companies are full of tacit knowledge, and voluntary turnover is
detrimental to knowledge retention. These companies are made up of employees who are
entrepreneurs and innovators. The more dissimilarity in the knowledge base between the
acquiring company and the company being acquired, the greater the chance of failure
when there is voluntary turnover (Oh & Johnston, 2021). The perceived loss of ownership
after the M&A can decrease employees’ engagement and innovative work behavior,
ultimately resulting in voluntary turnover (Kristiana et al., 2021). Small software
companies often begin as small start-ups, and innovative work behaviors are abundant.
Companies with a dissimilar knowledge base acquire these companies. Executive leaders
need an effective strategy to ensure the employees feel they still have some ownership in
the post-M&A company. This feeling of ownership may help employees remain
committed and engaged during the M&A process; otherwise, they may voluntarily leave,
and tacit knowledge will be lost.
Effective strategies to prepare for uncertainty after the M&A and ensure
employees continue their employment with the software company can be impacted by
events unrelated to the technology industry. The COVID-19 pandemic solidified the
importance of communication. Internal marketing was required to ensure employee
engagement and retention (Uludag et al., 2023). Although the COVID-19 pandemic had a
unique set of circumstances, it was challenging due to the high degree of uncertainty and
the fact that employees could easily disengage. Sazkaya and Görmezoǧlu (2021) argued
that POS was important for employees in stressful, competitive environments to stay
committed to their jobs. Strategies to ensure employees feel supported by the company
during times of uncertainty throughout the M&A process are essential for software
companies with higher stress levels and performance expectations. When some executive
leaders fail to employ strategies that promote employee engagement during times of
uncertainty, voluntary turnover will likely increase.
Knowing if individualized strategies facilitate engagement and reduce turnover is
more important than generalized strategies. Sandhya and Sulphey (2021) argued that
employee engagement helps reduce turnover intention in the IT industry. Peltokorpi et al.
(2022) concluded that newer employees with expectations for their company to resolve
uncertainty rather than take on the role themselves were significantly less likely to
voluntarily leave if general company strategies were used instead of individualized
strategies. The importance of POS in a software company on engagement and voluntary
turnover is clear. However, the significant effect of types of strategies to reduce
uncertainty is of particular interest since employees with more longevity hold more tacit
knowledge than newer employees in a software company. More exploration of different
strategies for keeping employees engaged and reducing voluntary turnover is needed.
Employing individualized strategies to keep employees engaged may be great for
employees who have been with the company longer but could have catastrophic effects
on engagement and turnover for newer employees.
Employees who become disengaged may purposely degrade their performance
and voluntarily leave the company during times of uncertainty if there is no POS. The
OCB of conscientiousness is not being practiced. Makhdoom et al. (2019) argued that an
environment where the perception of organizational politics is occurring and they may
not receive acknowledgment of their efforts causes the employees to disengage and seek
to punish the company by not completing their assigned tasks. Employees tend to
voluntarily leave when there is no perception that their work performance is valued and
an unethical political environment exists (Athanasiadou et al., 2023). A lack of POS
resulting in purposely not completing work tasks is the opposite of the OCB of
conscientiousness and has been shown to be the impetus for voluntary turnover. It is easy
to perceive a high degree of organizational politics during times of uncertainty
throughout the M&A process; therefore, executive leaders need to utilize strategies to
promote employee engagement through the OCB of conscientiousness to reduce
voluntary turnover.
The OCBs of altruism and conscientiousness, collectively viewed in this study as
employee engagement, are vital for affecting voluntary turnover in software companies.
Zaza et al. (2023) identified a strong relationship between software developers and other
IT professionals’ perception of overloaded and intent to leave the company. Further,
Farooq et al. (2022) argued that the ability of software developers to work remotely and
easily switch jobs contributes to higher turnover in the software industry. When
employees in software companies feel overloaded or underappreciated, they can easily
switch jobs and often do. The uncertainty throughout the M&A process exacerbates this
situation, and strategies to ensure employees feel supported by the company and remain
engaged by helping each other out and going above and beyond even though these
behaviors are not job requirements may help reduce turnover.
The ownership of work and flexibility to work remotely can psychologically
fulfill employees of software companies, but these attributes do not guarantee employee
engagement and longevity of employment. Degbey et al. (2021) identified a model that
identified the positive effects psychological ownership had on employees in an acquired
organization regarding employee engagement and their intent to stay in a post-M&A
organization. Yang et al. (2017) provided evidence to the contrary when the researchers
found that job autonomy (employees’ freedom to decide how they work) did not predict
practicing the OCB of altruism. On the other hand, Yang et al. found that a lesser
perception of organizational politics did increase conscientiousness. When employees are
satisfied with their work environment, it does not imply they will help each other and
remain with the company. It may influence their choice to help each other out in a time of
uncertainty and voluntarily stay with the company. Without purposeful strategies rooted
in POS, voluntary turnover is still an issue.
Strategies that give a sense of ownership may positively affect whether employees
voluntarily leave. Sandhya and Sulphey (2021) studied the relationship between
empowerment, engagement, and turnover intent. The researchers found that empowered
employees in the IT industry are more likely to stay employed with the company
voluntarily. The concept of ownership and engagement leading to voluntarily staying
employed with the company was partially contradicted by Mitravinda and Shetty (2022).
Peltokorpi et al. (2022) found that new employees who felt the company was responsible
for teaching them their jobs were more likely to voluntarily leave if they did not feel the
company’s strategy for training them was adequate. When an M&A occurs, everyone in
the company is effectively a new employee. An employee’s view that the company owes
training to them contradicts empowerment. During a time of uncertainty in an M&A, a
mixture of employees who expect to be explicitly told what their new roles and
responsibilities are and those who figure it out on their own is likely. It is not clear what
strategy works best.
A software company needs a good strategy to promote employee engagement to
reduce turnover because of uncertainty throughout the M&A process. Companies in the
IT industry, including software companies, have high turnover rates (Sandhya & Sulphey,
2021). Welch and Brantmeier (2021) found POS to motivate an employee’s intent to stay.
However, Peltokorpi et al. (2022) identified two potentially different views on what it
means to be supported by the company since an employee’s opinion on whether the
company is responsible for teaching them their job or it is up to them has a different
effect on voluntary turnover. In the extant literature, it is unclear if engaged employees
helping each other is enough to overcome the thought that it is solely the company’s
responsibility to figure out the new roles and responsibilities throughout the M&A
process.
Transition
In the Foundation of the Study section, I introduced the background of the study,
the problem statement, the purpose statement, the nature of the study, the research
question, the interview questions, the conceptual framework, the significance of the
study, and a review of academic literature. In the Review of the Professional and
Academic Literature section, I cited several academic journal articles and seminal authors
of the theoretical framework to provide context to my study. In this literature review, I
critically analyzed extant literature. I provided details on how voluntary turnover
adversely affected the M&A results, how the theoretical framework of organizational
support and employee engagement were related, and how POS and employee engagement
could adversely affect voluntary turnover.
In Section 1, the Foundation of the Study, there are 11 sections and five
subsections that provide my study’s justification, parameters, and context. In Section 2,
The Project, I reiterate the study’s purpose and describe my role as the researcher, the
participants, the research method and design, data collection and organization techniques,
and the reliability and validity of my study. In Chapter 3, Application to Professional
Practice and Implications for change, I will present my findings, identify how the
findings can be applied to professional practice, implications for social change, and
recommendations for future studies.
Section 2: The Project
In this study, I explored strategies used by some executive leaders of small U.S.
software companies to promote employee engagement through the M&A process and
reduce voluntary turnover. Section 2 includes the following sections: (a) purpose
statement, (b) role of the researcher, (c) participants, (d) research method, (e) research
design, (f) population and sampling, (g) ethical research, (h) data collection instruments,
(i) data collection technique, (j) data organization technique, (k) data analysis, (l)
reliability, and (m) validity. This section ends with a transition to Section 3.
Purpose Statement
The purpose of this generic qualitative pragmatic inquiry study was to explore
strategies some executive leaders of small U.S. software companies use that promote
employee engagement throughout the M&A process and reduce voluntary turnover.
Role of the Researcher
In this pragmatic qualitative inquiry study, my role as a researcher in the data
collection process was to design a study that allowed me to collect, analyze data, and
present findings without bias. As a researcher, I must openly reflect on my own
experiences and subject knowledge to ensure I am ethical with my data collection and
analysis (Wilson & Kim, 2021). I am an experienced software engineer in the technology
industry and have managed and led software teams of various sizes. My experience
includes involvement in multiple M&As firsthand as a direct employee of both large and
small software companies. I solicited participation through my professional network on
LinkedIn and any email references provided.
The use of direct and indirect contacts through my professional network helped to
mitigate bias. Not having a personal relationship with the participants prevented personal
biases and other complications introduced by insider research, described by Yin (2018)
as using family, friends, and coworkers for study participants. Additionally, I used
participant interviews for data collection. Interview protocols have been used successfully
in qualitative studies quite often, even though the research is the review instrument
(Wilson & Kim, 2021). Using interviews helped mitigate biases and ensures ethical data
collection since member-checking interview summaries requires participants to approve
my understanding of how they answered the interview questions. Contact of participants
did not start until after institutional review board (IRB) approval, and participant contact
and interview protocols were done following documented practices in the Belmont Report
(1979).
A researcher is also responsible for creating a positive setting for the participant
interviews. The interview setting can seem unsettling to the participant since the extent of
communication is a consent form and the researcher is interviewing an unknown
participant one-on-one with the interaction being recorded (Collins & Stockton, 2022).
Additionally, participants may not fully understand how to articulate their answers to
meet the intent of the research questions (Adame & Bisel, 2019). As a researcher, I
needed to create a friendly environment and present myself in a manner that made the
participant feel at ease. To mitigate the effects of the potentially unnatural setting and
encourage candid participation and adequate data collection, I asked the same interview
questions and, as required, the same or similar follow-up questions to all participants to
ensure participants provided a rich set of interview data.
Participants
A participant qualified for the study if : (a) they were executive leaders in a small
U.S. software company involved in an M&A, (b) they were over the age of 18, (c) they
worked as a chief officer or director in a small U.S. software company, (d) they
successfully implemented strategies that promoted employee engagement and reduced
voluntary turnover throughout the M&A process, and (d) the company qualified as a
small business as defined in Table 1.
Research Method and Design
Research Method
Multiple research methodologies are available for researchers to use in their study.
Qualitative, quantitative, and mixed methods are the three methodologies the researcher
can select (Yin, 2018). Yin (2018) identified using qualitative study and interviews to
answer the how question. A qualitative study is needed when answers to questions cannot
be quantified (Sim, 2020). A qualitative study was the best research methodology for my
study because I explored strategies some executive leaders of small U.S. software
companies use that promoted employee engagement throughout the M&A process and
reduced voluntary turnover. A qualitative study was the best because I needed interviews
with executive leaders to collect narrative data and understand how the strategy or
strategies used answered my research question.
A quantitative study was a viable option but was not selected. In a quantitative
study, numerical data is collected and analyzed mathematically to help determine an
explanation for the phenomenon (Ludwig & Johnston, 2016). In a quantitative study,
quantifiable measurements and mathematical analyses are used to determine the existence
or strength of relationships (Sim, 2020). In my study, I explored strategies by
interviewing executive leaders. Quantitative study was not the correct methodology for
my study. I collected data that could not be quantified by numbers, and the number of
participants in my study was not enough for the statistical analyses required quantitative
studies.
A mixed-method study was not an appropriate study. A mixed-method approach
combines qualitative and quantitative methodology (Sim, 2020). A mixed-method
methodology is unsuitable for my study because the quantitative aspect was inappropriate
for my research question and purpose, and the time and resources required for such a
study are prohibitive.
Research Design
Multiple research designs exist for qualitative study. Designs for qualitative
studies include phenomenology, ethnography, case study, grounded theory, and
(pragmatic) narrative inquiry (Johnson & Christensen, 2020). I used a pragmatic narrative
inquiry for my design. A pragmatic narrative inquiry allows the researcher to inquire
about lived experiences to better understand the studied topic (Tomaszewski et al., 2020).
Pragmatic narrative inquiry allows open-ended interview questions to be asked to
participants with different experiences to extract and understand how the strategy or
strategies were effective (Wilson & Kim, 2021). A pragmatic narrative inquiry design
was appropriate for my study since I interviewed executive leaders of small software
companies in the United States to explore strategies to promote employee engagement
throughout the M&A process and reduce voluntary turnover.
A case study also allows for participants to be interviewed. However, a case study
is bound to an intense exploration of specific cases and requires a special permission
process with the company or companies being studied (Yin, 2018). A pragmatic narrative
inquiry design is more appropriate than a case study design because it allowed me to seek
participants with different and possibly multiple experiences. A case study has a lengthy,
more restrictive approval process and limits the study to a small number of succinct
experiences.
Phenomenology, ethnography, and grounded theory do not align with the purpose
and context of my study. A phenomenology design focuses on an individual’s experience
of a larger phenomenon (Johnson & Christensen, 2020). An ethnography design studies a
cultural group, and a grounded theory design is used to develop a theoretical framework
based on individual experiences (Wilson & Kim, 2021). The purpose of my study was to
explore strategies some executive leaders of small U.S. software companies use that
promote employee engagement throughout the M&A process and reduce voluntary
turnover. A phenomenology design was not appropriate because I was not exploring a
phenomenon. An ethnography design was inappropriate because I was not exploring a
social group. A grounded theory design was inappropriate because I was not developing a
theory.
Population and Sampling
Convenience sampling reduces the introduction of bias into the study (Yin, 2018).
I purposely identified executive leaders as a participant requirement since that level has
decision-making authority. The Belmont Report (1979) identifies children under 18 as a
protected class and would require a lengthy and more rigorous IRB approval process. I
purposely selected participants above the age of 18 to avoid using a protected class in my
study. Participants were solicited through LinkedIn and email. I established an active
communication channel with participants using their personal email addresses. There
were six participants in this study.
Participants were be included if they functioned at a chief officer or director level
in a U.S. software company that qualified as a small business in Table 1 and implemented
strategies that successfully reduced or eliminated voluntary turnover during the M&A
process. The entries in Table 1 reflect the business areas included in my professional
network. I posted the invitation in Appendix A to the LinkedIn network and through
email from my professional email references to solicit participants. If interested, the
participants agreed to the informed consent, and a Zoom interview was scheduled. The
Zoom interview followed the interview protocol in Appendix B. Snowballing was used
while I interviewed participants through Zoom. I asked participants for references to
anyone they thought might be interested in participating in my study.
Ethical Research
My professional career and previous M&A experience helped provide an ethical
foundation for doing research. Fink et al. (2023) identified that the strongest ethical
orientation is from individuals who value others as humans rather than as a means to an
end. As an employee, I have experienced uncertainty and observed the adverse effects of
lack of engagement and voluntary turnover during an M&A. In addition to being a
software engineer, I am an adjunct professor teaching courses for a software
programming degree at the university level. Following documented ethical standards, my
passion for helping others learn, and my lived experiences of the M&A process make me
an ethical researcher.
I followed guidance from the Belmont Report (1979) when communicating with
participants, when collecting data through open-ended interview questions, and when
managing participants’ data. The Belmont Report is iconic guidance to ensure respect for
the individual research participant through informed consent (Siddiqui & Sharp, 2021).
Following this guidance through an accepted training entity can help ensure ethical
research is performed. I completed the Doctoral Student Researchers Basic Course
webbased training from the Collaborative Institutional Training Initiative CITI.
Following the guidance in the Belmont Report requires informed consent. See Appendix
A for the invitation email or social media post.
Participants were allowed to withdraw their consent at any time. If a participant
withdrew from the study, I immediately deleted any data I collected from them.
Participants will remain confidential. The participants were asked for demographic
information. The participant had the option to decline the demographic information. The
demographic data was supplemental, and participant quotes did not include anything that
disclosed a participant's identity or allowed a study reader to infer a participant’s identity.
Participants were labeled as Participant 1, Participant 2, and so on. All participant data
was stored on a password-protected universal serial bus (USB) drive and stored in a
locked safe. The USB drive will be destroyed after 5 years.
Data Collection Instruments.
Data collection instruments are needed when collecting data. Yin (2018) identified
the interviewer as the primary instrument in a qualitative study. I was the primary data
collection instrument. Once the interview was complete, I downloaded the file recorded
using Zoom’s audio transcription feature. The automatic video recording was deleted
after the interview. I used member-checking by summarizing participants’ responses to
the open-ended interview questions and sending the summaries to them for approval.
I used the interview protocol with open-ended questions in Appendix B as the
primary means of collecting data. Yin (2018) identified sources of data as being sufficient
for a qualitative study: interview data, focus group data, and relevant data archived in the
public domain—e.g., trade publications, organizational press releases, or news archives—
or internal organizational data, e.g., internal company e-mails, meeting minutes, and
memos. Internal company data could not be used since my study was a generic qualitative
pragmatic inquiry. The following was collected during the Zoom interview with the
participants:
•transcripts and audio recordings from individual participant interview
responses,
•notes and observations collected during the interview and
•data found in the public domain.
The interview transcripts and recordings included multiple participants from at
least two different companies. Data were collected using the open-ended interview, with
each participant asked the nine questions and, as necessary, the follow-up questions in
Appendix B. I started all interviews with a scripted introduction and followed the same
scripts and interview protocol in Appendix B for all participants to ensure bias was not
introduced.
The data collection methodologies implemented through the primary data
collection instrument were interviewing, observing, and data collecting. Interviewing
enabled the capturing of data regarding the strategies some executive leaders of small
U.S. software companies used to promote employee engagement throughout the M&A
process and reduce voluntary turnover. The interviews included participants from my
professional network. The participants were solicited through LinkedIn or email using the
invitation in Appendix A. Interviewing allows for a conversation setting in which the
participant can provide an in-depth recount of an event and additional details as a
response (Yin, 2018). I used Zoom to ask six participants open-ended interview
questions. If the six participant interviews did not allow for overall themes to be
extracted, participant solicitation and Zoom interviews would continue until data
saturation was achieved. Observations were noted during the Zoom interviews.
Observing allows for assessing the participant’s physical environment (Yin, 2018). Voice
inflections in the verbal response were noted for each open-ended interview question. If
the participant agreed to have their camera on, noted observations also included body
language and physical gestures. Data collection allows artifacts to be used, explored, and
analyzed during a qualitative research study (Yin, 2018). Data collection was
implemented by asking the participants for ancillary, publicly available data supporting
or reinforcing their answers. This included data on public websites, commercially
available curricula or courses that were followed during the merger or acquisition, M&A
management firms used, public corporate filings, leadership guides, and coaching
materials. The interview questions were field-tested.
Data Collection Technique
The following were the steps for collecting data:
1. Obtained IRB approval of the proposal.
2. Solicited participants from my professional network through email or
LinkedIn.
3. Obtained participation consent from solicitation respondents.
4. Interviewed participants for 30 to 60 minutes over Zoom and recorded the
audio using the Zoom record to cloud feature. Once the interview was over
and transcripts and notes were verified, the video portion of the recording was
deleted, the audio and transcription files were downloaded to my local
computer, and the audio recording and transcription files in the cloud storage
were deleted. Recording to cloud storage is required by Zoom for the
transcription feature to work.
5. Performed member-checking by summarizing the participant’s response to the
questions, emailing them the summary, making any necessary corrections, and
receiving approval of correctness from the participant.
6. Imported the audio and transcription files into MAXQDA 2022 and stored the
audio and transcription files created with Zoom’s transcription feature in a
project folder hierarchy using an aliased name.
7. Created a handwritten key for participant aliases and put it in a locked safe to
avoid an electronic breach.
8. Collect documents and other data in the public domain (websites, podcasts,
blogs, technical publications, and business journals) referenced by the
participant or that I found in the public domain to support interview responses.
9. Imported documents and other data collected through public domain into
MAXQDA 2022 (to be used for data triangulation).
10. Performed the Data Analysis Procedure.
11. Repeated Steps 3–10 for all six participants.
Data Organization Technique
MAXQDA 2022 was used for data storage, management, and analysis.
MAXQDA 2022 allows for creating a project that can be used to hold all data for the
study. Text files or Microsoft Word Documents containing observation notes, audio
transcripts, and ancillary public data in text files, PDFs, and Microsoft Documents
(Word, PowerPoint, Excel) were imported into MAXQDA 2022. Inside the MAXQDA
2022 project file, the imported data was searched, marked, and stored in a folder
hierarchy to facilitate the organization and understanding of the data. MAXQDA 2022
was used to annotate audio files to add notes and relate them to other data in the tool as
necessary to identify themes during the data analysis. Raw electronic data was stored on a
password-protected drive. The data from the password-protected drive was moved to a
USB drive. The USB drive and printed data were stored in a locked safe. After 5 years,
the USB drive and any printed study data will be destroyed.
Data Analysis
For this pragmatic qualitative inquiry study data analysis, I collected data to
answer the research question: What strategies do some executive leaders of small U.S.
software companies use that promote employee engagement throughout the M&A
process and reduce voluntary turnover? Thematic data analysis was the best way to
analyze the data from my study because my study was based on open-ended interview
questions and thematic analysis involves iterative analysis of the interview responses and
other forms of collected data for themes and assignment of specific codes for data related
to each theme (Morgan & Nica, 2020). Themes can then be used to explain how or why
something occurred (Yin, 2018). MAXQDA 2022 software was used to help me analyze
the data, code the data, and find common themes in the data.
The data analysis procedure was hierarchical, starting with the raw data collected
during the study. Creswell (2014) defined the following hierarchical qualitative data
analysis process to apply to the raw data collected during the interview process:
1. Organization and data preparation
2. Viewing and listening to all available data
3. Codification of data
4. Rendering descriptions of the codified data into higher-level themes and
descriptions
5. Integrate descriptions and themes into a qualitative narrative
6. Formulate results by interpreting the meaning of the descriptions and themes
7. Check the validity and accuracy of the interpretations using data triangulation
and member checking (verifying accuracy with the participants)
Creswell’s (2014) Steps 1 and 2 were accomplished by assembling interview
transcripts, recordings, observations, and publicly available artifacts into ordered data sets
in the MAXQDA 2022 project file. Next is Step 3 in Creswell’s data analysis. In this
step, data in the ordered sets were broken down into smaller pieces, and a label (or code)
was applied to help categorize data. The next two steps, 4 and 5, in Creswell’s data
analysis involved placing the coded data into themes, patterns, and categories for
interpretation. Next in Creswell’s data analysis are the interpretation, validity, and
reliability, Steps 6 and 7. Triangulation of different data sources was used as a basis for
validity. Member checking was used to ensure the validity and accuracy of my
summarization of the participant’s responses.
Although Creswell’s (2014) seven-step data analysis does not have a specific step
for conclusions, all seven steps were used to formulate a conclusion. Before formalizing
the conclusion, additional analysis was used to check for completeness, validity, and
alignment of the study. One check performed was ensuring the research questions were
addressed properly and thoroughly. The other check performed was ensuring the
literature review aligned with the data analysis results. If completeness or alignment
issues were discovered, the necessary data analysis procedures were repeated until the
issues were resolved.
Reliability and Validity
Credibility
Credibility is an important aspect of validity. One way of establishing credibility
is through member checking (Howard-Grenville et al., 2021). Member checking has been
accepted as one of the best ways to ensure the validity of a scholarly study (Motulsky,
2021). Marshall et al. (2021) also identified collaboration with participants to encourage
their reflections during the interview, and engaging in participant review is required to
ensure a study is trustworthy, ethical, and credible. Participant review enhances
credibility by allowing the participants to correct, modify, and confirm the researcher’s
interpretation of their responses (Marshall et al., 2021). The answers to interview
questions were summarized and given back to the participants for member-checking (peer
review) and approval. This ensured the accuracy of their response and increased the
credibility of the results. My previous exposure to the M&A environment strengthened
reliability, and member-checking helped exclude any personal bias from the data
collection and analysis processes.
Transferability
Appropriate checks must be made to evaluate dependability and consider a study
reliable. Yin (2018) suggested that enough data to allow an audit to be successfully
performed must be incorporated into the research design, analysis, and results. The
interview responses themselves will provide a source of reliability if they are checked for
obvious errors (Creswell, 2014). Having a peer review of the interview questions by
experts ensures they are reliable (Howard-Grenville et al., 2021). Being honest with the
reader about participants, boundaries, and limitations of the study enhances its
transferability (Marshall et al., 2021). I used multiple participants, compared my
interview notes against participant responses, and compared my field notes and
participant responses against extant literature and public records to ensure my study was
reliable.
Having multiple data sources is imperative, but this data must lead to useful
conclusions that can be confirmed and applied to future scenarios. Younas et al. (2023)
argued that transferability requires a qualitative narrative that is meaningful to others,
details motivations and intentions, relates to the circumstances of the scenario, is
authentic, provides sufficient context of the scenario, is related to the research question,
and is participant-centered. I used open-ended research questions to solicit meaningful
responses with full context, interview observations to capture authenticity, and member
checking to confirm that interview responses were interpreted correctly. The peer review
in my study included the IRB of Walden University and a field test of some of the
questions using eligible participants and making changes based on the results. I
documented the research design, limitations, delimitations, the informed consent used
(Appendix A), and the interview protocol used (Appendix B) to ensure it is clear to the
reader how I designed the study to provide quality information on how my study can be
applied in the future.
Data Saturation
Multiple data sources were used to ensure data saturation. Yin (2018) identified
that establishing patterns within multiple data sources is a means of achieving validity.
Iterating through the different participant datasets and thematic coding can be used to
analyze the collected data and assess its validity (Howard-Grenville et al., 2021). Data
saturation is achieved when no new phrases or themes are encountered and when the
participants’ answers become redundant (Marshall et al., 2021). Multiple data sources
were obtained by ensuring that participants from at least two companies were used. Data
saturation was ensured by using an iterative data analysis procedure in which data from
each participant interview was collected, analyzed, coded, and compared against other
participant interview data, and themes and coding were updated as required. The
participants’ responses and available public data were organized in a MAXQDA 2022
project, and the software was used to analyze the collected data for patterns, establishing
themes, coding, and identifying data saturation.
Triangulation was used to ensure data saturation. Yin (2018) discussed internal
validity as a concern to ensure that the posited causal relationships can be concluded
correctly. Howard-Grenville et al. (2021) identified using multiple data sources to
achieve data saturation. Creswell (2014) identified triangulation using multiple sources as
a validity strategy for qualitative analyses. The following data were used to find a
convergence of themes or patterns between participants to ensure validity and achieve
data saturation:
•transcripts and audio recordings from individual participant interview
responses,
•transcripts and recordings from at least two different companies,
•field notes documenting observations during the interview, and data found in
the public domain.
Transition and Summary
The purpose of this generic qualitative pragmatic inquiry study was to explore
strategies some executive leaders of small U.S. software companies use that promote
employee engagement throughout the M&A process and reduce voluntary turnover. In
Section 2, The Project, I provided the details for conducting the study, including the role
of the researcher, a description of the participants, the research methodology and design,
a description of the population and sampling method, data collection instruments,
technique, organization, and analysis, and identified key components that make this study
reliable and valid.
In the following section, Section 3, I provide an overview of my study and present
my findings. I identify the results of my thematic analysis, describe how the results can
be applied to professional practice, identify implications for social change, and
recommend actions and further research.
Section 3: Application to Professional Practice and Implications for Change
Introduction
The purpose of this study was exploration of strategies used by some executive
leaders of small U.S. software companies to promote employee engagement throughout
the M&A process and reduce voluntary turnover. The target population of the study was
executive leaders—chief or director positions—of small U.S. software companies who
successfully reduced or eliminated voluntary turnover during the M&A process. During
the data analysis, four themes emerged. The themes were (a) communicate openly and
honestly, (b) establish trust in leadership, (c) include employees in the decision-making
process, and (d) clearly explain expectations in the post-M&A company.
Presentation of the Findings
I interviewed seven participants using Zoom to answer the question of what
strategies some executive leaders of small U.S. software companies use to promote
employee engagement throughout the M&A process and reduce voluntary turnover. Only
data from six of the interviews were able to be used. During data collection, I recorded
audio and used the features of Zoom to transcribe the interview audio. I took notes during
each interview, noting key points and observable voice characteristics indicating the
importance of a response. I uploaded the audio, audio transcript, and my interview notes
to MAXQDA 2022. I used MAXQDA 2022 to code data, identify themes, and perform
data analysis. Reflections and conclusions for my study are presented at the end of this
section.
To ensure confidentiality, each participant was assigned a unique identifier. The
identifiers used were P1 for Participant 1, P2 for Participant 2, P3 for Participant 3, P4 for
Participant 4, P5 for Participant 5, and P6 for Participant 6. I randomly assigned the
numbers in the identifier instead of using the interview order. Refer to Table 2 for
collected demographics.
Table 2
Participant Demographics
Participant Age (18-30, 30-5, over 50) Gender Highest education
P1 18-30 M Graduate
P2 30-50 F Graduate
P3 18-30 M Bachelor
P4 Over 50 M Graduate
P5 Over 50 M Bachelor
P6 Over 50 M Graduate
I used MAXQDA 2022 to identify four themes for strategies participants used to
promote employee engagement throughout the M&A process and reduce voluntary
turnover. The themes were (a) Communicate openly and honestly, (b) Establish trust in
leadership, (c) Include employees in the decision-making process, and (d) Clearly explain
expectations in the post-M&A company. The details for the themes are in Table 3.
Table 3
Major Themes
Theme Words searched
MAXQDA 2022 word
count in data analysis
Participant
count
Communicate openly and
honestly with the employees
open OR honest OR transparent
OR communicate OR clear 50 6
Establish trust in leadership trust OR reason OR leadership 67 5
Include employees in the
decision-making process
decision OR understood OR
understanding OR include OR
listen
32 6
Explain expectations in the
post-M&A company expect OR new OR role OR what 106 6
The study participants included six leaders of small U.S. software companies who
successfully employed strategies to reduce or eliminate voluntary turnover during the
M&A process. It is important to retain employees during the M&A process to avoid the
loss of internal product and process knowledge (Woehler et al., 2021). MAXQDA 2022
was used to organize the data hierarchically and coded in a way that allowed the
deduction of themes (Özlem, 2023). All six participants converged on the four themes. P3
did not specifically use the words associated with trust in leadership but utilized the same
strategies as the other five participants, who did equate their strategies to trust in
leadership. All participants used strategies that included employees in the decisionmaking
process. All participants used strategies to ensure employees understood what to expect
for roles or new opportunities in the post-M&A company. The findings in this study
aligned with the content written in the review of professional and academic literature
section in this paper. The four major themes found are detailed in the following sections
using POS as the conceptual framework.
I used member checking to ensure the validity of the data collected but chose to
use an alternative to a simple participant review of transcripts. Member checking is
widely accepted to determine validity in scholarly studies (Motulsky, 2021). However,
when member checking involves reviewing the audio transcript, there is a decrease in
participant feedback (McKim, 2023). During the participant interviews, I took notes for
each interview question. I wrote down key statements and, for each question, kept a
running summary of paraphrases and participant quotes. When participant responses were
lenghtly or complex, I would summarize the response during the interview and ask the
participant if I understood it correctly. I kept separate notes for each participant to avoid
mixing up participant responses. After the interview, I used my handwritten notes to
summarize responses. The summaries included my interpretation of how the participant
answered the question and responses to follow-up questions I thought were important for
data analysis. I sent the interview questions and summary responses to the participants for
editing and approval.
Data saturation was achieved using interview transcripts from all six participants,
handwritten notes and observations, and publicly available data. It is important to use
multiple data sources to determine data saturation (Howard-Grenville et al., 2021). Major
themes were deduced using participant-approved summaries, keyword searches, and
extant scholarly literature. The word search output Table 3 was captured by searching
participant responses to the interview questions, not the summarized response. I made a
copy of the transcripts provided by the transcription feature in Zoom and removed
everything I said from the transcript. The modified transcript contained only participant
responses in the word search to ensure my words or summaries did not bias the results. I
checked the major themes in Table 3 for validity by comparing the word search results
from the raw transcripts with notes, participant summaries, public websites, and extant
scholarly literature. The following sections provide a detailed analysis of the four major
themes.
Theme 1: Communicate Openly and Honestly
Open and honest communication was a strategy discussed by all six participants.
When answering interview questions, the participants discussed how communication
during the M&A process can help manage uncertainty, reduce fear of the unknown, keep
employees engaged, and reduce or eliminate turnover. P3 initially responded to interview
question four with one word: communicate. P3 emphasized the word communicate using
a strong and serious tone. P5 discussed the importance of honest communication even if
the answers were unfavorable to the employees. P6 mentioned how appreciative
employees were of their honesty even though some of the employees experienced drastic
changes immediately.
All participants identified communication as a key to addressing uncertainty
during the M&A process. Verčič et al. (2023) argued the importance of communication in
an environment of POS. To ensure employees continue to engage by working in a manner
that benefits the company, purposeful strategies are needed to address the distrust
employees naturally have (Koo & Lee, 2022). Uncertainty is prevalent in the M&A
process. P1, P2, and P5 identified uncertainty as a reason for leaving. P4 identified the
importance of not keeping secrets. All six participants discussed how maintaining an
open line of communication was critical to making employees feel supported by the
company and preventing voluntary turnover.
A strategy of communicating openly and honestly helps address the fear of the
unknown because of uncertainty in the M&A process. P1, P2, and P5 identified
uncertainty as a reason for employees voluntarily leaving the company during the M&A
process. P1 and P2 identified the willingness of employees to leave because they had
anxiety due to uncertainty during the M&A process. P6 stated that sharing as much
information as soon as possible helps relieve an employee’s fears because of the
uncertainty in the M&A process. Employees are more willing to receive coaching if they
perceive communication as open and honest (Thomas & Passmore, 2021). If the company
can reduce an employee’s fears, the employee feels supported by the company (Syed et
al., 2020). P4, P5, and P6 identified that confidentiality agreements can impede
communication strategies, but it is important to communicate as much as possible.
Having open and honest communication during times of uncertainty during the M&A
process is important to ensure employees feel supported by the company, remain
engaged, and stay with the company.
Communication strategies are important, but a strategy needs to ensure the
company does not overcommunicate. All participants used email, group meetings, and
individual meetings as part of their communication strategies. P3 identified the
importance of a communication plan and the need to be patient and let the process work
itself out. P5 brought up an interesting point about not causing more issues by
overcommunicating. Additionally, P5 stated that it was important to understand that
different audiences may need different messaging. Kristiana et al. (2021) argued that
incorrect messaging can adversely affect employees' psychological contract and cause
disengagement or voluntary turnover. Holley (2023) argued that it is important to have
clear, factual written communication, and the communication channel used needs to be
appropriate for the audience. P5 discussed communicating different messages for
different types of employees in the company.The communication strategy for M&A is
necessarily on a need-to-know basis, and, as pointed out by P1, P4, and P5, the M&A is
pushed on the employee, they are not asking for it. The employee communication
strategy during the M&A process needs to be factual to avoid employees feeling betrayed
by the company and becoming disengaged or voluntarily leaving. The employee
communication strategy must also be timely and purposeful instead of often and random,
or credibility may be lost.
Open and honest communication is key to addressing uncertainty in the M&A
process. P1 discussed how executive leaders know the vision for the post-M&A
company, but employees do not fully understand it, and communication was key to
bridging the gap. P1, P2, and P5 specifically identified the importance of a two-way
conversation when discussing employee engagement. P3, P4, and P6 indicated that POS
were increased because executive leaders from the acquiring company attended all
employee meetings and answered any questions the employees had. Pop and Sim (2023)
stressed the importance of two-way communication. Harikkala-Laihinen (2022) argued
that information exchange between executive leaders and employees predicts employee
engagement. Open and honest communication is not limited to internal communication
within one of the two companies. Strategies for communicating openly and honestly need
to include executive leadership communication from both companies. Two-way, open,
and honest communication is key to making the employees feel supported by the
company and relieving their fears and anxiety. It helps by eliminating uncertainty as
much as possible, since the message being communicated is from an exchange between
executive leadership and the employees instead of a push of information in one direction.
Theme 2: Establish Trust in Leadership
The participants in this study instilled trust in leadership by ensuring employees
knew executive leaders had their best interests in mind. Activities included executive
management from the acquiring company speaking directly with the employees, ensuring
them M&A process priorities were maintaining the current company culture and physical
location, and keeping benefits and pay intact.
Establishing trust in leadership was directly addressed by P1, P2, P4, P5, and P6.
P3 indirectly addressed trust in leadership. P3 did not specifically use the word trust or
leadership when answering the interview questions but did discuss the two companies
getting to know each other with question-and-answer sessions with executive leadership
from the acquiring company during the M&A process. P4, P5, and P6 used these
meetings and indicated they were used to build trust. Although the transcript word search
in Table 3 does not indicate that P3 directly discussed the major theme of establishing
trust in leadership, P3 indirectly supported this theme because they discussed using the
same employee engagement meetings with executive leaders from the acquiring
company.
Trust in leadership can help with POS and employee engagement in uncertain
times during the M&A process. When the company's employees trust executive
leadership, they remain engaged (Tian et al., 2021). When employees trust others in the
company, they tend to go above and beyond their required individual level of
performance and desire to help others even though it is not required (Koo & Lee, 2022).
P3 discussed how using question-and-answer sessions for the two companies to get to
know each other helped with employee engagement because the employees gained trust
with leadership. P3 identified that trust was developed because executive leadership took
the time to get to know the company being acquired. P1 and P6 discussed how trust in
leadership also eliminated employee concerns because of uncertainty. Eliminating these
concerns by building trust in leadership gave the employees a sense of value, and they
reciprocated by remaining engaged in the M&A process and staying with the company
after the M&A was complete.
In addition to the type of engagement activities used to build trust, some
participants discussed timing. P5 specifically stated there needs to be trust in leadership
established prior to the M&A occurrence; otherwise, employees may voluntarily leave.
P1, P4 and P6 discussed the need for trust with executive leadership to exist before going
through the M&A process to ensure the inherent uncertainty in the process did not result
in voluntary turnover. The reason for this became clear because P4, P5, and P6 discussed
the inability to disclose details about the M&A at will because of legal and competitive
reasons. The inability to disclose everything could cause increased levels of uncertainty.
Uncertainty for employees in a fast-paced environment like the one software developers
work in can cause issues.
The issues cause are releated to the industry environment. Employees performing
software development in the technology industry can easily suffer burnout and exhaustion
because of intense customer delivery requirements and may voluntarily leave the
company if they do not feel supported by executive leadership (Zaza et al., 2022). It takes
time to build relationships between executive leaders and employees that foster employee
engagement (G. G. Sharma & Stol, 2020). If executive leadership in the company has
limits on information they can share during the M&A process and trust relationships take
a while to build, the employees must already trust the executive leaders before the M&A
process starts. Employees may voluntarily leave without trust in executive leadership
because they might not feel supported by the company. Employees who feel the
company supports them will reciprocate (Eisenberger et al., 1986). Even though there are
still unknowns, trusting existing executive leaders may facilitate employee engagement
and prevent voluntary turnover.
Keeping a similar company culture can help build trust in leadership. P4 and P6
discussed the importance of maintaining the company culture after the M&A was
complete. P4 indicated that the M&A would not continue if the culture or physical
location had to change. P4 discussed how the employees were told about the importance
of culture and maintained POS by letting the employees talk to the acquiring company
and encouraging employees to visit the campus of the acquiring company. P2, P3, and P4
discussed the importance of due diligence and being familiar with who the company is
and what opportunities there are after the merger. P5 discussed the importance of
identifying key individuals who must remain in the post-M&A company. Due diligence is
important, as well as bringing human resources aspects into the M&A process and
focusing leadership on what needs to happen before a final go/no-go decision is made and
employee agreements are finalized (Craig, 2022). Organizational commitment can reduce
voluntary turnover (Özkan, 2022). Making a go/no-go decision for the M&A based on
how the employee is affected shows commitment by the organization. P6 discussed that
executive leadership remained committed to the employee, and although there were
restrictions on what the employees could be told, the employees understood and voiced
appreciation for how the M&A process was handled, and there was no voluntary
turnover.
Theme 3: Include Employees in the Decision-Making Process
All participants in the study discussed the need to make employees feel included
in the decision-making process to ensure employees felt supported by the company,
remained engaged during the M&A process, and did not voluntarily leave. This theme
was a surprising discovery. Ashgar et al. (2021) identified employee engagement as being
highly involved and dedicated to your work. Jin and Tang (2021) argued that POS
significantly affected employee engagement in their day-to-day activities. From previous
experiences and the literature review, I anticipated hearing about employees not
voluntarily leaving because of engaged employees helping each other with their day-
today activities. Instead, the participants discussed POS and avoiding voluntary turnover
by keeping the employees engaged in the M&A decision-making process. The OCBs
found in during the data analysis differed from what was anticipated and written in the
literature review.
The anticipated OCBs of altruism and conscientiousness were not fully uncovered
during data analysis. Instead, the OCB of conscientiousness was found to be partially
practiced, and organizational loyalty and compliance to the rules was found to be
practiced instead of altruism. Guay et al. (2019) argued that employees engage if they
feel comfortable with their leadership and they practice the OCB of conscientiousness.
However, Lisá et al. (2021) argued that attachment to leadership only partially explained
employee engagement and fear of separating from leadership after the M&A decreased
organizational loyalty and compliance. P1 discussed how employees remained engaged
and felt supported by the company. Turnover was avoided when employees felt
ownership in the M&A process. P1 identified employee concerns about changes in
leadership, but involvement in the decision-making process was what the participant
repeatedly emphasized. Although employees were attached to leadership, there is a larger
need for them to be involved in decision-making for the rules, norms, and values in the
post-M&A company they need to comply with. Involvement in the decision-making
process facilitated the employee observing POS, remaining engaged, and remaining loyal
to the company by not leaving.
P2 and P5 provided valuable insight into which employees needed to be included
in the decision-making process. Both participants discussed the importance of targeting
key employees. P5 elaborated and discussed how employees may look up to certain
employees, and if those key employees leave, others will likely follow and voluntarily
leave as well. Craig (2022) argued the importance of developing retention plans for key
individuals in the due diligence phase of the M&A process. Keeping employees involved
and informed positively affects employee engagement and collaboration (Pop & Sim,
2023). Ensuring that, at the very least, key employees are included in the decisionmaking
process can help ensure POS and engagement and reduce voluntary turnover since the
key employees are respected by their peers and will likely follow their lead.
P3, P4, and P6 provided valuable insight into how to make employees feel
included in the decision-making process even if they are not directly involved with the
decisions. All three participants discussed the importance of both companies getting to
know each other. When employees can voice concerns and ask questions, that helps make
them feel supported by the company and remain engaged. P4 discussed the M&A process
as being pushed onto the employees and identified how a slow integration of change
helped. P3 discussed the need to be patient and let the process work itself out.
Uncertainty during the M&A process could lead to voluntary turnover (Fatima &
Siddiqui, 2021). Employees resolve uncertainty through facts and shared observations (de
Roo, 2021). Although employees may not directly make decisions, limiting swift, drastic
changes and providing opportunities for employees to listen to executive leaders and be
heard by them, may result in positive observations that increase POS and employee
engagement, as well as limit voluntary turnover.
Theme 4: Clearly Explain Expectations in the Post-M&A Company
All participants in the study discussed the importance of working with the
employees so they understood expectations in the post-M&A company. This included
organizational and operational changes, changes to benefits, changes in the work or roles,
and growth opportunities available for career enhancement and project work. As
identified in Table 3, communicating expectations in the post-M&A company was the
most prevalent theme in analyzing the participants’ transcripts. All employee meetings
and one-on-one meetings were ways the participants implemented this theme.
Organizational and operational changes in the post-M&A company need to be
clearly communicated to employees. P1 discussed how uncertainty is prevalent in the
M&A process and how employees may have an unclear future vision of how the
postM&A company will operate. P1 discussed employees’ intent to voluntarily leave the
company because of misconceptions employees had based on assumptions for changes to
leadership, job stability, job security, and whether they can perform at an acceptable level
in the post-M&A company. Executive leaders need to understand employees' questions
about the post-M&A company and know how to respond meaningfully (de Roo, 2021).
The M&A process requires executive leaders to communicate and manage changes to
organizational structures and employees' day-to-day work activities (Syed et al., 2020).
Executive leaders must ensure employees fully understand how the post-M&A company
operates, what opportunities are available, and their role in the new organizational
structure. If not, employees do not have the information they need to make informed
decisions about how to conduct their work activities—engagement—or whether to stay
with or leave the company.
Operational aspects of the post-M&A company also include tangible items such
as pay and benefits. P2, P4, P5, and P6 discussed the importance of communicating the
financial benefits available after the completion of the M&A, especially to key
employees. The participants discussed the imporance of pay and as well as health and
retirement benefits. P5 discussed the importance of identifying and explaining potential
discrepancies between large and small company compensation to the employees. A small
company has fewer limitations for compensation, whereas when a large company
acquires a smaller company, specific criteria need to be met for pay ranges in the
postM&A corporation. P5 stated that in some cases, the employees' pay may increase
because of the pay ranges enforced by the acquiring company. P2 echoed the need to
consider employees’ financial considerations to ensure they feel supported by the
company, remain engaged, and stay with the post-M&A company. Explaining the
expected compensation package in the post-M&A to employees is an important
consideration for POS, engagement, and voluntary turnover.
Income is an important part of voluntary turnover decisions, but employees may
evaluate the whole compensation package when making decisions. Dissatisfaction with
income causes voluntary turnover (Mitravinda & Shetty, 2022). However, a satisfactory
combination of pay and benefits can be used to increase POS and decrease voluntary
turnover (Jolly et al., 2021). When executive leaders provide assurances that there is an
expectation that employees’ compensation in the post-M&A company is going to be the
same or more, employees feel supported by the company and are less likely to leave the
company. Pay and benefits are more important to some employees than others. Failure to
properly communicate the expectations for pay and benefits may result in voluntary
turnover because employees can only assume what they are not told. Executive leaders
can reduce voluntary turnover by ensuring that the expectations for pay and benefits in
the post-M&A organization are clearly explained.
Job security was prevalent in all six participant responses. All six participants
discussed the importance of employees understanding the new norms and work roles to
help reduce anxiety, fear, and uncertainty. P1, P2, and P5 specificially identified security
in their response. P4 specifically identified job safety. P3 discussed communicating what
the new normal was going to be. The participants' responses suggest that employees
feared losing their jobs as a necessary reason for communicating expectations in the
postM&A organization. Lack of employee engagement in a software company during
periods of uncertainty can cause voluntary turnover (Méndez-Ortega & Teruel, 2020).
Anxiety from job insecurity indirectly affects turnover throughout the M&A process
(Fatima & Siddiqui, 2021). Having a roadmap identifying an employee engagement plan
for the first year post-M&A can help employees understand operations in the post-M&A
company (Craig, 2022). Executive leaders need to assure employees that their role exists
in the post-M&A company. New roles and responsibilities can be communicated through
group meetings and preferably with a document plan to foster POS. Otherwise,
employees may voluntarily leave, and tacit knowledge is lost.
Changes in project work and growth opportunities were important considerations
of expectations in the post-M&A company to the partipants. P1, P2, and P6 discussed the
importance of communicating the benefits of expected company growth. P1, P2, P3, and
P4 discussed the importance of communicating new carrer growth and work opportunities
in the post-M&A company to the employees. P5 specifically mentioned key employees
will leave if they think the work after the acquisition will be less interesting and
emphasized these employees are talented enough to easily find a new. P5 also mentioned
that some employees may not want to work for a larger company, but may decide to stay
even though they dislike the new environment. Retaining tacit knowledge is important to
executive leaders.
Software technology work is highly knowledge-based. Knowledge-based workers
in small companies have mobility and will change jobs if they do not perceive that the
acquiring company is motivated to retain employees (Xiao & Dahlstrand, 2023). Many
times, small software companies are innovative startups. When larger companies acquire
small startup companies, conflicts between the new normal and the old normal can exist,
and psychological contracts are broken, so employees voluntarily leave (Kristiana et al.,
2021). If executive leaders fail to communicate that each employee that they are valuable
contributors and they can continue their existing work in the post-M&A company,
employees may voluntarily leave. Also, executive leaders must effectively communicate
the opportunities to work on new, more enjoyable projects, or the employees may
voluntarily leave.
Applications to Professional Practice
M&As are necessary for companies to remain competitive but have a high failure
rate (Loki Group Inc, 2023). Uncertainty and fear during the M&A process can cause
voluntary turnover (Fatima & Siddiqui, 2021). M&As are necessary for companies to
remain competitive, but voluntary turnover in the post-M&A results in a loss of internal
product and process knowledge which can cause the M&A to fail (Woehler et al., 2021).
A small U.S. software company is usually a lean organization without abundant written
documentation. If employees leave the company during the M&A process, the perceived
value of the M&A may no longer be valid because the necessary technical knowledge or
skillset will no longer be with the company. The strategies identified in my study
contribute to the M&A community by providing an additional scholarly study that
executive leaders can use when searching for find strategies to employ during the M&A
process.
The strategies found in this study may help executive leaders in small U.S.
software companies successfully promote employee engagement during the M&A
process and reduce voluntary turnover. Communicating openly and honestly and
providing information about the M&A as it becomes available or when allowed to be
communicated helps alleviate fear caused by the uncertainty. Employing communication
strategies through both employee and individual meetings allows for handling of each
employee’s unique requirements for them to feel supported by the company. Establishing
trust in executive leadership prior to the M&A process and trust with the acquiring
company executive leadership during the M&A process helps employees feel supported
by the company and to remain engaged in the process. Building trust may lead employees
to decide to stay with the company even when unknowns exist. Clearly explaining
expectations in the post-M&A company to the employees may result in a reduction of
fear of losing their job and assurance, confidence they will fit in the culture of the
postM&A company, and assurance they understand what opportunities will become
available.
Understanding what to expect makes the employees feel supported by the company,
keeps them interested and engaged, and may prevent them from voluntarily leaving since
they know their job is secure and the work is going to be just as interesting or better in the
post-M&A company.
Implications for Social Change
Voluntary turnover during the M&A process may lead to an unsuccessful M&A,
resulting in additional job loss for employees in software companies and a decrease in
revenue for the local community if the company goes out of business or the local office is
closed. Employees may be more engaged if there is alignment with human resource
management and the company’s social responsibility goals (Aboramadan & Karatepe,
2021). A perceived discrepancy between the acquiring company’s actions and their
espoused corporate social responsibility goals can cause stakeholders to assume a hostile
takeover and take negative financial actions (Zhang et al., 2022). Lack of employee
engagement or stakeholder divestment can be problematic for the future success of the
post-M&A company. The negative public perception of the acquiring company may be
worse if the M&A fails and job and economic gains are not realized.
If a small software company is acquired by a larger one, the public perception
matters. Depending on which small company is acquired, successful M&As can help
improve a larger company’s diversity makeup and improve its environmental, social, and
governance (ESG) scores (Gillan et al., 2021). During the first year of a successful
acquisition, a company’s ESG score typically increases (Barros et al., 2022). ESG scores
are becoming increasingly valued by stakeholders and communities. Eliminating
voluntary turnover during the M&A process may increase the chance of M&A success
and help build a company that is viewed as a more socialy responsible company and as
the post-M&A company continues to grow, so do the lives of the employees and
economic benefits to the surrounding community.
Recommendations for Action
This study is about strategies executive leaders—chief or director positions—of
small U.S. software companies use that promote employee engagement throughout the
M&A process and reduce voluntary turnover. My first recommendation is that executive
leaders—chief or director positions—of software companies that are going to be involved
in the M&A process get training on effective communications. This includes the
acquiring company and the company being acquired. Employees understand that there is
going to be uncertainty when there is an M&A. They do not want information to be
withheld. Even if there is bad news, employees want to hear it. They also want to be
heard. If executive leaders understand how to best communicate in a two-way
conversation with their employees and talk to them instead of talking at them, the
employees feel supported by the company and will reciprocate the support.
My second recommendation is that executive leaders—chief or director positions
—of software companies learn to be transformational leaders rather than transactional
leaders. Enrolling in seminars and hiring expert speakers to speak to all levels of
management and employees can help build trust in leadership. When executive leaders
encourage and inspire employees instead of lecturing them, a relationship may form and
trust may follow. In this study, trust in leadership was found to be important to foster
POS, ensure employee engagement, and reduce voluntary turnover during the M&A
process. Also, M&As can be random occurrences because a company, large or small, can
approach another at any time a merge, buy, or sell. Trust in leadership needs to be
organic, it cannot be accomplished at the last minute when an M&A potential randomly
occurs.
My third recommendation is to is that executive leaders—chief or director
positions—of software companies learn to trust their employees and include them in the
decision-making process. Small software companies tend to be run by people with an
entrepernual or innovative spirit. This likely means they are used to making decisions by
themselves or with outside advisors like venture capitalists or consulting firms.
Developing a company culture that values employee involvement in the decision-making
process can lead to a sense of pride and ownership and a perception that the company
values them and they will receiprocate. Including employees in the decision-making
process should occur when there is no pending M&A. Like trust, when a random M&A
occurs, a history of inclusion is not something that can be built last minute.
My final recommendation is that executive leaders—chief or director positions—
of software companies clearly communicate company expectations. These expectations
can be work performance, organizational roles or structures, available project
opportunities, and company operations. Understanding how the company works and the
employees’ role in the company can help relieve anxiety and fear caused by uncertainty.
These expectations can be written in formal documentation or presented regularly in
allemployee meetings. Outside consultants can be brought in to help executive leaders
develop and effectively communicate expections. Understanding expectations can benefit
normal business operations but is imperative during the M&A process. If not
communicated, employees will make decisions based on their own assumpionts and my
voluntarily leave the company.
Recommendations for Further Research
I interviewed participants in small U.S. software companies that I contacted
through LinkedIn. My first recommendation is to do a longitudinal study and see how
voluntary turnover changes over time or if leadership changes. My second
recommendation is to do a specific case study. A case study can improve upon my
results. My data analysis only included publicly available information and speaking with
participants outside of the work environment. Digging deeper into internal company data
may yield more robust strategies because detailed data such as emails, meeting invites,
and meeting minutes can be analyzed. Also, a case study opens the possibility to use
focus groups that include the employees as a data point. Employees may be able to
provide further details as to why certain strategies were effective. My final
recommendation is to perform a quantitative study and use proven communication survey
instruments to find effective communication strategies during the M&A process.
Combining the results from my study with the results from an effective communication
study may provide a great benefit to M&A research.
Reflections
I have worked as a software developer in the technology industry for many years
in both large and small companies. My DBA journey started when I was introduced to the
program while working for a company undergoing the M&A process. It was my third
experience as an employee in a large company being acquired. When my journey started,
the M&A was going well. I was fascinated with the process and interested in
understanding more about why the strategies used worked and where they came from.
My context for M&A was in a large technology company. I knew what I knew based on
my experiences, but my previous experiences and preconceived notions did not bias my
results. In my experience, a successful M&A involved status updates and stability in
leadership and required employees to be engaged by working together to support each
other through the process. The participant responses in my study included two of these
preconceived notions, but I was surprised to learn about engagement being with respect
to the M&A process, not the work. I kept any bias out of my study by performing the data
analysis using only the perspectives on engagement discussed by my participants. I hope
these research results contribute to the community by providing executive leaders with
strategies to make more M&As successful and to provide employees opportunities for
professional growth, and to provide society benefits from the technology growth that
should occur after an acquisition.
Conclusion
The focus of my study was exploring strategies some executive leaders of small
U.S. software companies use that promote employee engagement throughout the M&A
process and reduce voluntary turnover. In my literature review, I provided the context for
my study by identifying the problems associated with M&As and how POS, employee
engagement, and voluntary turnover were interrelated. Strategies to ensure employees
feel supported by the company and promote employee engagement can be used to help
employees through the uncertainty of the M&A process, reduce voluntary turnover, and
impact the success or failure of the M&A. Executive leaders have a duty to protect their
employees. However, they should not protect them by keeping secrets. Using the
strategies uncovered in this study can help create healthy relationships between executive
leaders and employees and build trust during the M&A process. It is impossible to
remove all uncertainty in the M&A process, but it can be limited, and its effects can be
mitigated through the use of these strategies. Open and honest communication, trust in
leadership, inclusion of employees in the decision-making process, and explaining
expectations in the post-M&A company may not guarantee M&A success or that
employees will engage and stay with the company. However, these strategies will ensure
that employee decisions are informed and that you, as an executive leader, did all you
could to calm your employees' fears and prevent voluntary turnover.
