Organizational factors of justice and culture leading to organizational identification in merger and acquisition

This paper aims to examine the influence of two organizational factors, namely, organizational justice and organizational culture, on organizational identification as perceived by employees following merger and acquisition (M&A) in Malaysia.

The study, which adopts the Social Identity Theory as its theoretical foundation, was conducted among employees from selected Malaysian organizations that had undergone M&A from 2009 to 2016. Data were obtained from 302 respondents and analysed using Structural Equation Modelling procedures.

The results reveal that interactional justice and four dimensions of organizational culture contribute significantly to organizational identification, with a determination power of 61 per cent.

The study offers practical insights to human resource managers in strengthening organizational identification as perceived by employees after an M&A by considering the crucial role of interactional justice and organizational culture.

There have been few investigations that link employees’ perceptions of organizational justice and culture with post-merger organizational identity. This study theorizes on human issues in M&A and enriches the Western literature on organizational identification by providing insights from an Asian (Malaysian) perspective.

The research is limited in terms of respondents who were employed in M&A organizations in the Klang Valley areas in Malaysia. The scope is also limited to an examination of two groups of organizational factors, namely, justice and culture, that lead to organizational identification. Implications to managing human resources from the perspective of organizational development are discussed.