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Trust dynamics in mergers and acquisitions: a case survey

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This study addresses the largely neglected but potentially critical role that trust plays in mergers and acquisitions [MandA]. The case survey method is used to examine a model that synthesizes the factors identified by prior studies to be of critical importance to the integration process following MandA, with target firm members' trust in the acquiring firm management as a key mediating variable. Case survey findings suggest that, while characteristics of the combination situation only marginally affect trust, integration process variables such as the speed of integration, the acquirer's cultural tolerance and sensitivity, the quality of communication, and the quality of post-combination reward and job security changes are major influences on target firm members' trust in the acquiring firm management. As hypothesized, the level of target firm members' trust in the acquiring firm management was found to mediate the relationship between integration process variables and various post-combination integration outcomes.

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en

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application/pdf

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http://flora.insead.edu/fichiersti_wp/inseadwp2004/2004-05.pdf

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Copyright INSEAD. All rights reserved