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Antecedents of Target Firm Members’ Trust in the Acquiring Firm's Management: A Decision-Making Simulation

Advances in Mergers and Acquisitions

ISBN: 978-0-76231-337-2, eISBN: 978-1-84950-434-8

ISSN: 1479-361X

Publication date: 18 August 2006

Abstract

Prior research on post-acquisition integration has paid little attention to the factors that influence the development of trust between the members of an acquiring firm and those of the target firm. Using a policy capturing approach, we found that five aspects of the takeover situation and the integration process affect target firm members’ trust in the acquiring firm's management: takeover friendliness, national cultural similarity, interaction history of the acquiring firm and the target firm, retained autonomy, and attractiveness of the acquiring firm's HR policies. Our findings suggest that of the five trust antecedents, the attractiveness of the acquirer's HR policies is by far the most powerful predictor of target firm members’ trust in the acquiring firm's management. The implications for post-acquisition integration research and practice are discussed.

Citation

Stahl, G.K., Hwee Chua, C. and Pablo, A.L. (2006), "Antecedents of Target Firm Members’ Trust in the Acquiring Firm's Management: A Decision-Making Simulation", Cooper, C.L. and Finkelstein, S. (Ed.) Advances in Mergers and Acquisitions (Advances in Mergers & Acquisitions, Vol. 5), Emerald Group Publishing Limited, Bingley, pp. 69-89. https://doi.org/10.1016/S1479-361X(06)05004-6

Publisher

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Emerald Group Publishing Limited

Copyright © 2006, Emerald Group Publishing Limited