Intergroup bias in mergers and acquisitions: Some potential solutions

Maryalice Citera, Purdue University

Abstract

Based on a review of the merger and acquisition literature, the present thesis proposed that Social Identity Theory provided a useful framework for understanding post-merger employee problems. Social Identity Theory suggests that in order to maintain positive social identities people will favor ingroup members over outgroup members. Ingroup favoritism has been found across a variety of situations including when people make reward allocations, performance evaluations, and general attitudinal judgments. Two solutions to corporate combination conflicts were examined. One solution emphasized a shift to an interpersonal orientation. In an interpersonal orientation people focus on interactions between individuals and not group to group interactions. The other solution emphasized a shift to an intragroup orientation. In an intragroup orientation, the focus is on the identity shared by both the ingroup and the outgroup. Furthermore, a search of the literature disclosed a key factor: the perspective or relative size differences between the two organizations. A laboratory experiment tested two hypotheses. The first stated that relative group size would determine the amount of intergroup conflict displayed by subjects. The second proposed that the effectiveness of the two solutions would be a function of relative group size. The results failed to support the two hypotheses. For the most part subjects showed very little intergroup bias overall. Post-hoc analyses and explanations of the data revealed some interesting substantive issues and suggested several future areas of research.

Degree

Ph.D.

Advisors

Weiss, Purdue University.

Subject Area

Occupational psychology

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