A merger joins two organizations with equal power and status. An acquisition occurs when one organization purchases another, and the purchasing organization is usually the more powerful or dominant partner.

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Corporations may grow larger by combining with other businesses through mergers or acquisitions. A merger joins two organizations of equal power and status, while an acquisition occurs when one organization purchases another. These combinations often create duplicate services, such as accounting departments or sales forces, which commonly must be merged and may involve staff reductions. This can lead to organizational processes and stresses similar to downsizing events.

Mergers and Acquisitions

Spielman, R. M., Jenkins, W. J., & Lovett, M. D. (2020, April 22). Psychology (2nd ed.). OpenStax. https://openstax.org/books/psychology-2e/pages/1-introduction

OpenStax Psychology (2nd ed.) Textbook

After a merger or acquisition, two formerly separate organizations may have duplicate services, such as accounting departments or sales forces. Combining those duplicate departments commonly involves reducing staff.

Example of Departmental Duplication in a Merger

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.

Analyzing Employee Reactions to a Corporate Merger

Merger and Acquisition Distinction

Mergers require determining how organizational culture will change, and employees must adjust to that change. Workers may experience added stress as they lose their connection to the old organization and try to connect with the new combined group.

Culture Adjustment During Mergers

Research in this area focuses on understanding employee reactions and making practical recommendations for managing organizational changes.

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