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Antecedents of target firm members' trust following a takeover: a decision-making approach

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213 Singaporean employees participated in a policy-capturing study that simulated how characteristics of the initial takeover situation and the acquiring firm's integration decisions and actions influence target firm members' trust in the acquiring firm management. The findings show that mode of takeover, extent of imposed control, interaction history, and attractiveness of acquiring firm's HR and reward system are significant influences on respondents' trust decisions, with the acquiring firm's HR and reward system being the most important antecedent of trust. Cultural distance did not influence respondents' trust decisions. A significant interaction effect between mode of takeover and cultural distance was found, suggesting that the detrimental effects of a hostile mode of takeover on target firm members' trust are stronger in cross-border acquisitions compared to domestic ones. Among the various demographic variables examined, only position level and gender had a significant moderating effect on the relationship between the proposed antecedents and respondents' trust decisions. The implications for merger and acquisition research and practice are discussed.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2002/2002-112.pdf

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Copyright INSEAD. All rights reserved