Should I stay or should I go? Multi-focus identification and employee retention in post-acquisition integration

Abstract

Retaining key employees is often one of the most crucial goals when an acquirer buys a target firm. However, what determines whether employees stay or leave once the firm has been bought? This article investigates how organizational and occupational identification influence employee exit intentions. Based on a longitudinal configurational study in two acquired hospitals, our findings challenge the popular belief that identification with the organization consistently increases retention, and we stress the important effect of occupational identification, which has been largely neglected by research on post-acquisition integration. We find that under certain conditions, occupational identification increases employees’ exit intentions but that neither identification with the firm nor identification with the occupation are necessary or sufficient to entice employees to stay or leave. Instead, their effects are contingent on the professionalization of an occupation and the degree to which employees’ expectations have been disappointed. Our findings further suggest that attention is an important mediating mechanism linking identification and exit intentions, as employees focus predominantly on topics that relate to the social entities they most strongly identify with. This article develops theory on the effects of social identification on exit intentions after acquisitions and contributes to research on multi-focus identification and post-acquisition integration.