Transformational leadership and post-acquisition performance in transitional economies

Abstract

Purpose

The purpose of this paper is to explore the relationships between transformational leadership and post-acquisition performance, introducing into the analysis the mediating effect of employee attitudes toward changes, in the specific context of a transitional economy.

Design/methodology/approach

The data were collected from 208 employees (including 91 managers) from ten acquired companies in Serbia. Using exploratory factor analysis, two dimensions of transformational leadership were identified in the context of a transitional economy: the first one refers to inspiring and stimulating the employees, and the second dimension refers to responding to employee problems. Multiple regression analysis was used to test the research hypotheses.

Findings

The results of the analysis indicate that inspiring and stimulating employees has an indirect impact on post-acquisition performance through the mediating effect of employee attitudes toward changes, whereas responding to employee problems has both direct and indirect impacts on post-acquisition performance.

Practical implications

The results of study may be significant for managers involved in the processes of mergers and acquisitions and may aid them in obtaining adequate levels of employee commitment and trust, which are needed to achieve challenging goals and to improve post-acquisition performance.

Originality/value

The research of the mediating effect of employee attitudes on post-acquisition performance contributes to a better understanding of the relationships between transformational leadership and post-acquisition performance. Research in transitional economies related to subject matter is limited, while in Serbia in particular, there is no prior empirical work on the impact of transformational leadership on post-acquisition performance.

Citation

M. Babić, V., D. Savović, S. and M. Domanović, V. (2014), "Transformational leadership and post-acquisition performance in transitional economies", Journal of Organizational Change Management, Vol. 27 No. 6, pp. 856-876. https://doi.org/10.1108/JOCM-02-2014-0028