The role of employee engagement during mergers and acquisitions.

Abstract

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