Turnover During a Corporate Merger: How Workplace Network Change Influences Staying

Abstract

The upheaval created by a merger can precipitate voluntary employee turnover, causing merging organizations to lose valuable knowledge-based resources and competencies precisely when they are needed most to achieve the merger’s integration goals. While prior research has shown that employees' connections to coworkers reduces their likelihood of leaving, we know little about how personal social networks should change to increase the likelihood of staying through the disruptive post-merger integration period. In a pre-post study of social network change, we investigate over fifteen million email communications between employees within two large merging consumer goods firms over two years. We use insights from network activation theory to posit and find that employees with high formal power (rank) and high informal status (indegree centrality) react to the merger's general uncertainty and threat by developing new social connections in a manner indicative of a network widening response: reaching out and connecting with those in the counterpart legacy organization. We also investigate whether increased personally-felt threat in the form of merger-related job insecurity strengthens these relationships, finding it does in the case of high formal power. We also find that employees increasing their cross-legacy social connections is key in reducing those employees' turnover after a merger. Our study suggests that network activation theory can be extended to explain network changes and not simply network cognition.