Analyze the provided case study and identify the most probable underlying reason for the observed changes in employee behavior, explaining the connection between the corporate action and the employees' reactions.

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Corporations often pursue growth by combining with other businesses through mergers or acquisitions. This process frequently results in the duplication of departments, such as accounting or sales, which must be consolidated. This consolidation commonly involves staff reductions, leading to organizational stress and heightened job insecurity for employees, similar to the effects observed during downsizing events.

Mergers and Acquisitions

This diagram illustrates a common organizational structure following a corporate merger. A new 'Merged Company' is formed, which now oversees the two previously separate entities, 'Company A' and 'Company B'. Both original companies initially retain their own departments, such as Sales and Accounting. This structure highlights the duplication of functions that often necessitates consolidation and staff reductions to improve efficiency.

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