Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions

Rekha Rao-Nicholson*, Zaheer Khan, Peter Stokes

*Corresponding author for this work

Research output: Contribution to journalArticle

25 Citations (Scopus)

Abstract

This paper examines the impact of leadership on targets’ employee psychological safety (EPS), characterized by employees’ expectation of job and remuneration stability, during the cross-border mergers and acquisitions (M&As) by emerging market multinational companies (EMNEs). The M&As by Indian and Chinese companies forms the empirical context of this study and the case survey method is used to examine the effect of leadership on EPS. The results show that the EMNEs’ leadership visibility during the M&A process has no impact on the EPS, whereas, the trust in the EMNEs’ leadership has positive effect on the EPS. The deal status has a moderating effect on the leadership visibility and positively affects the EPS. This research finds evidence of target country differences in terms of the effect of EMNEs’ leadership on EPS and limited evidence of such effect for acquirer nationality differences.

Original languageEnglish
Pages (from-to)103-113
Number of pages11
JournalInternational Business Review
Volume25
Issue number1, Part A
Early online date9 Oct 2015
DOIs
Publication statusPublished - Feb 2016

Keywords

  • China
  • Emerging market multinational firms
  • Employee psychological safety
  • India
  • Leadership
  • M&As

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