Interaction Effect of Management Communication and Workplace Formalization on Shared Goals and Commitment of Employees During Post-Merger and Acquisition Integration

Abstract

This research analyzes the effect of management communication on shared goals and organizational commitment of employees during post-merger and acquisition integration. In addition, we examine whether a work policy in terms of formalization could moderate the effect of management communication on shared goals of employees. Survey data were collected from 209 employees at a company in the power and energy sector in Thailand which was acquired by another company. We implemented multisource data collection to prevent common method variance issues in cross-sectional surveys. Partial least squares structural equation modeling was then used to analyze the data. Based on the findings, we discovered supporting evidence confirming the positive association between management communication and shared goals. Shared goals also mediate the effect of management communication on organizational commitment. Moreover, moderating effect analysis showed that the degree to which management communication affects shared goals is stronger among employees in the work units that have high levels of formalization than those in work units that have low levels of formalization. In essence, our study provides new evidence showing that workplace formalization could be the factor that intensifies the degree to which management communication encourages employees to develop shared goals. Our research also provides some implications for human capital development and policy recommendations during organizational change.