Contingency fit, cultural fit and resistance to change in a post-merger situation

Contingency Fit, Cultural Fit and Resistance

to Change in a Post-Merger Situation

Milica Zolak

10684670

6th of May final draft

Executive Programme in Management Studies – Strategy Track

Amsterdam Business School (UvA)

STATEMENT OF ORIGINALITY

This document is written by Student Milica Zolak who declares to take full responsibility for the contents of this document.

I declare that the text and the work presented in this document is original and that no sources other than those mentioned in the text and its references have been used in creating it.

The Amsterdam Business School is responsible solely for the supervision of completion of the work, not for the contents.

Table of Contents

0.

ABSTRACT

1

1.

INTRODUCTION

2

1.1 The research problem 2

1.2 Summary of previous research 3

1.3 Research gap 3 1.4 Research Question 4

2.

MAIN CONCEPTS

4

3.

THEORETICAL FRAMEWORK

9

3.2 Boundary conditions and assumptions 9

3.3 Hypotheses 9

4.

METHOD

12

4.1 Research method 12

4.2 Data collection 12

4.3 Measures 13

4.5 Reliability and validity 15

5. RESULTS

16

6.

DISCUSSION / CONCLUSION

20

6.3 Limitations & Future research 22

6.4 Conclusion 23

7.

REFERENCES

24

8.

APPENDICES

28

8.1 Appendix 1 Questionnaires from Literature 28

8.2 Appendix 2 Introduction Letter 33

8.3 Appendix 3 Questionnaire with reversed coding 34

0.

ABSTRACT

This paper aims to shed a light on the relationship between contingency fit, cultural fit and resistance to change in a post-merger situation. Through comparison of (1) an individual’s perception of the fit between the firm strategy with the environment (i.e. contingency fit), (2)an individual’s perception of the fit between the organization and the employee (i.e. cultural fit), and (3) the combined effect of these two types of fit, this research aims to contribute to a deeper understanding of resistance to change.

Hypotheses are developed and tested through a survey amongst employees of the University of Applied Sciences in Amsterdam in a post-merger situation. Operationally, both contingency fit and cultural fit had to be measured as misfit. The results of the survey show that contingency misfit is significantly negative related to resistance to change. Cultural misfit is not significantly related to resistance to change. When combined the test results show that the two types of misfit appeared to be

complementary in relation to resistance to change, though to a very small extent. The expected interaction effect of cultural misfit on the relationship between contingency misfit and resistance to change was absent. Findings indicate that a contingency misfit can be used for something good in a post-merger situation, i.e. to overcome resistance to change. This adds an interesting view to existing research where a negative relationship between contingency misfit and performance has been found. Combined, this study’s results and previous research suggest an interesting trade-off between either lower financial performance or lower resistance to change for managers of firms during a post-merger situation. However, this problem may resolve over time, as the provoked change of the organization – facilitated by lower levels of resistance to change – may lead to new situations of contingency fit.

1.

INTRODUCTION

1.1 The research problem

Organizations are required to change to keep fit with the rapidly changing environment (Weick & Quinn, 1999; Greenwood & Hinings 1996). During periods of environmental change a misalignment between an organizations structure and environmental demands could evolve. The need to change and realign is important to stay in the game and to build a strong competitive position (Wanberg & Banas, 2000). Building such a position could lead to survival in this rapidly changing, competitive environment. This

environment continues to challenge organizations and employees to improve their abilities and adapt to new situations (Myungweon Choi, 2011). These changes require employees to stay flexible in adaptation towards new situations. For organizations flexibility to modify and refine the structures and processes is a requirement to stay connected with the external environment (Miles, Snow, Meyer, Coleman, 1978). Organization-environment fit also called the contingency fit is the compatibility or match between the organization and its context settings (Hambrick, 1983). Contingency fit means congruence,” when organizational response variables match environmental variables” (Volberda, Weerdt, Verwaal, Stienstra & Verdu, 2011). This type of fit seems to have a big impact on the way employees perceive the change. A radical change in contingency fit (f.e. a radical technological innovation that changes the external market) could alienate employees from the environment in which the organization acts

(Volberda et al., 2011). This is because it could really change the external environment in which the work takes place. It’s a fit which seems to be more distant from the employees compared to the fit between the organization and the employee. The

employee-organization link or in other words the cultural fit seems hard to find in these turbulent times (Caldwell, Herold & Fedor, 2004). According to Caldwell et al (2004) this type of fit is seen as “the compatibility or match between employees and their workplace environment”. In this matching process job satisfaction and organizational commitment are important factors (Caldwell, Herold & Fedor, 2004). In creation of such a cultural fit, employees perceptions regarding the organizational change are very important. If the organizational change is perceived as harmful employees will resist the change (Myungweon Choi, 2011). The cultural fit is related to trust and commitment in the organization. To maintain this commitment perceptions of the change of the cultural identity could be leading (Venus, Stam & Knippenberg, 2014). If in the employee’s perceptions the cultural identity change does not threaten the current organizational identity, it could motivate and give trust to commit towards the change and overcome the resistance to change. In the end commitment is necessary for a successful change and this is only possible if employees feel a fit with the organization. Organizations have to adapt to restore equilibrium in the changing environment. This adaptation creates a disequilibrium in the organization. Organizations and its employees tend to resist these changes due to the normative embededness and preferences for equilibrium or stability (Greenwood & Hinings, 1996). When organizational changes create a disequilibrium the natural balance will be restored by finding a new cultural fit. Thus, it seems worthwhile to explore what the impact of perceived cultural fit and contingency fit is on the

resistance to change of employees and which type of fit in this sense has the biggest impact on the resistance to change of employees in a post-merger situation. In addition to that it’s interesting how these two fits interact. At least these two types of fit are important in organizational change situations. First contingency fit to stay aligned with

the external environment. Second the cultural fit to restore the equilibrium and create internal commitment.

1.2 Summary of previous research

In the field of organizational change research attention focused mainly on contingency fit instead of cultural fit (Wanberg & Banas, 2000). At this point in time researchers acknowledge that employees are key in the success or failure of the change (Shin, Taylor & Seo, 2011). The combination of a contingency fit and a cultural fit perspective could create a new view on what is necessary for a successful change. Since half of the intended changes fail (Shin, Taylor & Seo, 2011) a successful change strategy seems to be missing. This gap could be due to undermining the importance of the employees in the change process. “An increasing number of researchers have argued that many change efforts fail because change leaders often underestimate the central role

individuals play in the change process.”(Myungweon Choi, 2001). Hence, change-related attitudes of employees have an effect on the organizational performance (Kim &

Mauborgne, 2003).Resistance to change is key for a successful implementation. In this light Bourgeois and Brodwin (1984) have explored several change models for a change implementation that could work in different situations. Over time these models have evolved towards richer cultural models where culture became the starting point of the corporate strategy. Based on this evolvement organizational change was induced by mutual adjustments that were guided by values and beliefs from a strong corporate culture. Consistency and consensus from this cultural heritage were essential in the implementation process. In other words, the cultural identity remained at the center of the implementation and strategy to change. There are conflicting visions about which type of change creates the best results in a merger integration process; a radical change where the cultural identity is replaced (Fiol, 2002) and the contingency fit is leading or a change where the cultural identity is cherished and cultural fit is leading (Venus, Stam & Knippenberg, 2014). Sticking to your cultural identity could create a higher employee acceptance of the change. This could lead to lower resistance, because of a better cultural fit. The counterpart is that it seems questionable if this could really lead to a radical change according to Fiol (2002), which could be necessary for survival of the organization. This necessity to change in an individuals perception may be key in overcoming resistance to change. In Fiol’s view contingency fit deserves more focus.

1.3 Research gap

With this thesis the gap between the existing literature that looks from a contingency fit or cultural fit perspective could be tightened. Choosing the right strategy for the change to fit the environment (i.e. contingency fit) is important for the succes of a firm. These strategic changes could lead to replacement or maintenance of the cultural identity of the organization and affect cultural fit. This combination of contingency fit and cultural fit is new. This could create a richer perspective in the end. Little is known so far about the impact of the perceived change in contingency fit and cultural fit on an individual employee’s resistance to change in a post-merger situation. At this point in time there are two opposite views towards the maintenance of cultural fit in a change process in a post-merger situation. According to Venus et al (2014) assuring that the core of the cultural identity will remain is essential for overcoming employee’s resistance to the change. In other words maintenance of the cultural fit is leading. Opposed to Fiol (2002) who states that sticking to your old Identity creates blinders for new possibilities. In this view commitment to the change is only possible through movement away from the original identity and a change on strategic level. Adaptation to the turbulent

environment is a necessity to keep the organization in the competitive race. In other words contingency fit could be a necessity for the organization in perceptions of the

individual employee as well. It could create commitment to change and overcome employee’s resistance to change. Through comparison of perceived contingency fit and perceived cultural fit and the effect of these two types of fit on an individual employee’s resistance to change this research tries to explain which fit is most influential on resistance to change in a post-merger situation. This will deepen our insights on these complex relationships. In addition to that it is worthwhile exploring if the two types of fit are complementary and if there is interaction between them. This will give a clearer view if these types of fit should be aligned to prevent resistance to change.

1.4 Research Question

This research questions: How do contingency fit and cultural fit, both separately and jointly, influence employee’s resistance to change in a post-merger situation?

The sub questions that will be taken into account in this research are: What is the relationship between contingency fit and resistance to change? What is the relationship between cultural fit and resistance to change?

Are contingency fit and cultural fit complementary in relation to resistance to change? Are contingency fit and cultural fit interactive in relation to resistance to change? The practical relevance of this research could be that managers have better insight of the impact strategic choices might have on employees and the effect of their reactions on the change. It could be a starting point to consider implementing changes

incrementally and honoring the cultural identity in place, or not and trying to replace it. It could help to focus on one type of fit or on both types of fit. Which type of fit is suitable in a post-merger situation?

It is interesting to see what the ideal combination of these two types of fit is to realize an optimal level of employee’s resistance to change. This research aims to deepen our insights on the relationship between the two types of fit and employee resistance to change, by exploration of the contingency fit and cultural fit and the effect on resistance to change. It’s also important to determine which of these two types of fit has a bigger effect on resistance to change. This could help in explaining the mixed earlier findings about this subject.

The thesis is structured into six parts. The first part is this introduction that explains the aim of the research. The second part is the literature review in which the main concepts will be explored and the findings from earlier research are highlighted. The concepts which are the main building blocks are organizational adaptation, resistance to change, contingency fit and cultural fit. In the third part the conceptual model of this research will be shown and explained. Followed by the fourth part in which the methodology for the execution of the survey is exposed. The fifth part is an overview of the main results found through the survey. Finally in the last part these findings will be discussed and the main conclusions about the complex relationships between resistance to change and the two types of fit will be presented.

2.

MAIN CONCEPTS

2.1 Literature introduction

Organizational changes are required in this era of rapid environmental changes to keep fit with the environment and the people in it. Management should pay attention to changes in the surrounding fields and continuously adapt. Organizational change is

defined by Herold and Fedor (2008) as “alterations of existing work routines and strategies that affect a whole organization”. In this definition it becomes clear that the changes can be approached from different perspectives from strategical and individual perspective. Until now research focused mostly on strategy (Wanberg & Banas, 2000). In this paper the two perspectives will be combined which seems to be an innovative approach. The factors that will be connected to create this broader perspective have to be examined.

The first factor taken into account is organizational adaptation. To adjust to external changes organizational adaptation is necessary. An organization should move away from a state of disequilibrium between the organization and the environment to a state of equilibrium.

Secondly, contingency fit is explained. Contingency fit is influenced by organizational change in its’ various forms episodic versus continuous with different sequences (Weick & Quinn, 1999). Both have a totally different effect on the individuals in the organization and lead to different reactions to the change. It is a strategical perspective that centers the fit between the firm strategy and its environment.

Thirdly, the cultural fit is described. From an individual employee’s perspective it is important to have a richer understanding of what a strategic change initiative’s effect is within the organization. It centers the link between the organization and the employee. This gives a view from within the organizational change process (Caldwell, Herold & Fedor, 2004).

The last factor is resistance to change of employees. Resistance to change is expected when the stability of the current cultural identity becomes uncertain. Violations of the organizational identity seem to have a negative effect on the level of trust and

motivation of the employees (Jacobs et al, 2008),which seem to have an effect on commitment and resistance to the change.

2.2 Organizational Adaptation

Effective organizations constantly modify and refine to adjust to environmental change (Miles et.al, 1978). Finding alignment with the environment requires flexibility and dynamism of the organization. According to Weick & Quinn (1999) “change is never off”an organization constantly should anticipate to keep external alignment. Adaptation is considered to be a process, not an event (Cameron, 1984). It is a response on a

disequilibrium or lack of fit between the environment and the organization. To return to equilibrium and this fit, adaptation of organizational processes and structures is

necessary. Creating a new match or fit with the environment and returning to stability will be the aimed outcome of the change. In organizational change literature there are two contrasting sorts of changes. At one side there is the episodic, radical,

transformational, discontinuous change and on the other side change is continuous, evolving and incremental change (Weick & Quinn, 1999). Episodic change is externally driven and it forces the organization to move away from its own identity in order to fit the environment again. The misalignment with the environment can occur if the

organization doesn’t continuously adapt. Continuous change is emergent; these changes occur spontaneously without force. Small adjustments lead to a cumulated bigger change. The cultural identity is respected in this way. In the literature there is a vivid discussion if small, incremental types of changes can really lead to a strategic change in the end. Others such as Orlikowski (1996) state that these minor adjustments are the essence of organizational change. Greenwood and Hinings (1996) look at organizational change from an institutional point of view. The two types of changes are classified as

radical and convergent. Radical change is “frame bending” outside of the current template and convergent change is “fine tuning” within the current template. The research shows that the institutional context creates resistance to change. And that the level of resistance is dependent of the strength of the current cultural identity “The greater the embeddedness, the more problematic is the attainment of radical change” (Greenwood & Hinings, 1996). Radical changes or moving towards a new template means breaking with core ideas and values. This is a situation with less stability for employees and loss of the cultural identity.

2.3 Contingency fit

These radical changes are made to create contingency fit. Fit in this case is seen as congruence between environmental and organizational factors. Organizational changes sometimes are necessary to respond to external changes (Nasrallah & Qawasmeh, 2009). The organization in this case bends its frame to adjust to the external environment and its conditions (Burton & Obel, 2004). The external context and organizational structure should somehow be aligned for a firm to perform well (Drazin & Van de Ven, 1985). According to March (1991) organizational performance depends on the exploitation and exploration of the organization’s context. Organizations should constantly improve the firm’s competencies and search for new alternatives to

strenghten competitive advantage. It is the combination of building on internal

competencies and responding to dramatically changing environments to increase long-run survival chances and short-long-run financial performance (Haveman, 1992). At this point in time there is a lot of dynamism in the external environment, the pace for changes and innovations is relatively high and for businesses to keep up is a big challenge. To keep fit with the environment businesses need frame bending, to find a form that fits the new situation. This frame bending is called finding contingency fit (Volberda, Weerdt, Stienstra & Verdu, 2012). Contingency fit can be realized in several ways. An organization’s success is dependent on the co-alignment between

organizational and environmental factors. It’s a dynamic form of fit finding the appropriate form over and over again. The focus on finding fit is linked to the environment and based on contextual factors. Central in contingency view is that contextual charecteristics are essential for the efficiency and survival of the

organization. Characteristics that should be taken into account are the organization’s culture, environment, technology, size or task (Drazin & Van de Ven, 1985). In this study three factors will be taken into account; technology, structure and culture also used in previous contingency research (Volberda et al., 2012). These contextual factors should fit together. If the environment is very dynamic and technological innovations create turbulence an organization’s culture and structure should be flexible. This flexibility is necessary to adjust to new environmental demands.

According to Blau & Scott(1962) “change precipitates conflict , while conflict often engenders change.” The adjustments in organizational structure and culture to keep fit with innovations in the environment produce resistance to change. Hence development of contingency fit could come at the cost of a loss of organizational status and stability.

2.4 Cultural fit

Changes that stick to the organizational status are made to improve and at the same time keep cultural fit. These changes are small steps within the current template of the organization. Emerging minor adjustments that in the end lead to a change (Orlikowski, 2006). Small steps that let the current cultural identity grow and give employees time to adjust and keep them out of resistance. Change recipients reactions (employee’s

reactions) are at the heart of the change action. These reactions are important

determinants of the change success (Oreg, Vakola, Armenakis, 2011). The organizational change is influenced by antecedents of the change, explicit reactions on the change and leads to certain change consequences. In this case the investigated antecedent of the change is the perceived cultural identity and its fit with the change. Cultural fit

according to previous studies could predict employee’s reactions to change. Particularly, the degree of alignment of existing cultural values with the change vision predict the commitment to change (Jones, Jimmieson & Griffiths, 2005). The better aligned, the tighter the cultural fit, the greater commitment and in the end the lower resistance to change. Change recipients who support the cultural identity of the organization and conform to its values are willing to put effort in maintenance of it. Trust and motivation of employees is key here. The extent to which change recipients have trust in the

management has the biggest effect on change reactions (Oreg, 2006). If there is a lack of trust employees are not likely to commit to the change initiated by management.

Employees that feel involved in the change action, who really are able to participate and with whom information is shared, are more likely to be motivated for the change effort (Brown & Cregan, 2008). If the change situation is seen as a misfit with the cultural identity this creates uncertainty about the future perspective. This could create a higher resistance because the benefits for the employees become less certain. When employees perceive a change is beneficial for them motivation is more likely to evolve and the level of resistance decreases. According to empirical research motivation is linked to

resistance to change (Myung eon Choi, 2011).

The cultural identity seems to be crucial for the survival of the company and can help to understand the commitment and the resistance of the employee which is strongly related to its survival (Corley, 2004). The cultural identity according to Jacobs et al. (2008) defines the boundaries of what is acceptable or unacceptable behavior. The cultural identity is who we are as an organization (Albert & Whetten, 1985) with our own unique shared norms, values and beliefs that build a coherent structure. It gives a sense of belonging and shared beliefs. This personification of the company could make employees proud of their job and strengthen their own identity (Corley, 2004). This identity can be threatened by organizational changes due to misalignments with the existing culture. Managing stability in perceptions of the identity by employees may be even more important than managing change. Employees have a high motivation to protect the cultural identity (Dutton, Dukerich & Harquail, 1994). Violations that hurt the identity can create uncertainty and distrust; uncertainty about the expected future and distrust in the organizational change or even worse the organization itself. By creation of a vision of the change where the core of the cultural identity will remain unchanged this uncertainty and mistrust could be avoided. Actually building on the collective continuity is important to serve as an uncertainty reducer and trust builder (Venus, Stam & Knippenberg, 2014). In addition to these points the collective continuity creates congruence and clarity, which create a likelihood that employees will commit to change (Myuongweon Choi, 2011). And that resistance to change will be low because it’s in line with their values and beliefs. Lock and Crawford (1999) found a strong

correlation between organizational culture and commitment. Hence sticking to the cultural fit seems to be the appropriate way to a supported implementation of the change and avoidance of a damaging resistance to it.To create a trusting organizational culture, an ongoing process is necessary that is long term focused and gives room for participation which creates motivation for the change. This will lead towards a higher commitment and lower resistance.

2.5 Resistance to change

“Change is like a stone tossed into a still pond, which causes ripples to radiate in directions with unpredictable consequences”. – Dent & Galloway Goldberg (1999). Resistance arises from these ripples that create uncertainty in the change process. The strength of the forces away from the situation of stability, such as the still pond, is related to the amount of resistance created. Zaltman and Duncan (1997) define

resistance as the maintenance of the status quo (in other words preservation), in times of pressure to change. In a situation of change the normal patterns are not applicable and new patterns should be incorporated. This incorporation is an interplay of ambiguous emerging processes. According to Dublin and Ireland (1993), resistance to change is attributable to fear of the unknown and to fear of poor outcomes. In a lot of cases the organizational benefits of the change are not beneficial for its employees. A lot of change initiatives are not successful because the focus is on the change program and not on changing the individual along the way. The employee’s perspective is essential because in the end the individuals have to make the change. Wanberg and Banas (2000) recognized that employee’s willingness to support the change is dependent on their psychological resilience. This psychological resilience predicts an individual’s resistance to change. Six sources of resistance from an individual’s personality are identified by Oreg (2003).

1. Reluctance to lose control. Individuals want to stay in control over their own situation. The feeling of loss of control creates uncertainty and resistance.

2. Cognitive rigidity. Individuals that are dogmatic and fairly closed-minded are reluctant to adjust to new situations.

3. Lack of psychological resilience. Change efforts create a higher level of stress, and personal resilience therefore is a predictor of the ability to cope with these changes. 4. Intolerance to the adjustment period involved in change. Individuals could resist change due to the higher workload and stress during the change.

5. Preferences for low levels of stimulation and novelty. Earlier research (Kirton, 1980) found two distinct types of individuals adaptors and innovators. Adaptors love

familiarity and sticking to the current framework. Innovators are seeking for new ideas and want to go outside the current framework.

6. Reluctance to give up old habits. “Familiarity breeds comfort” (Harrison, 1968).

Individuals in a new situation may experience new stimuli and their normal response may be inappropriate in this new situation. This could lead to stress because of the misfit.

In previous research is found that resistance to change is one of the factors that is critical for a successful change. It is seen as an enemy of the change that has to be conquered first (Waddell & Sohal, 1998). More than half of the change efforts are failures and resistance appears to be one of the critical factors.

Within this study other control variables that will be measured for additional insight are age, gender, and employee tenure, job experience and work department group.

3.

THEORETICAL FRAMEWORK

3.1 Conceptual model

This paper aims to prove that focusing on cultural fit or contingency fit could be of great importance for the success of an organizational change in a post-merger situation. Both types of fit could generate individual employee’s resistance to change. Changes in which the cultural identity is replaced could create detachment and lead to higher resistance to change. On the other side changes focused on contingency fit as a certain necessity to keep up with the enviroment, could lower resistance to change. Cultural fit and

contingency fit have to be measured by the misfit. From an operational point of view fit is not measurable that’s why misfit is suitable in this case. Thus in the research model and hypotheses these two types of misfit will be measured.

This leads to the following research question: How do contingency misfit and cultural misfit, both separately and jointly, influence employee’s resistance to change in a post-merger situation?

The design of the research question visualized is represented as following: (see Figure 1.)

Figure 1. Visualization of conceptual model

3.2 Boundary conditions and assumptions

There are several boundary conditions for this research. The first boundary condition is that it is only applicable in post-merger situations. Because it aims to measure the resistance and two types of fit in this specific type of a situation. The employees that are asked for the research should have experienced the merger. A tenure of at least 2 years at the current department is the second boundary condition. This is necessary to have a clear view on what the culture in the department is.

Two main assumptions underlie the research model. First, resistance to change is measured on an individual level. It is based on the psychological resilience of an individual. Sociological influences are exempted. Second, employees are

environmentally aware in their working environment. From an employee’s point of view contingency fit is seen as an external fit.

3.3 Hypotheses

Organizational change can be induced from different perspectives. Organizational changes are set in search for a contingency fit. This is an external fit which is not focused on the employees. The focus is on the alignment of the organizational settings and the environmental settings. To create employee commitment towards change this might not be the right focus. Because this external alignment creates benefits for the organization but in a lot of cases is not beneficial for the employees. This leads to fear for poor outcomes for the employees themselves. Thus focus on the contingency fit in the change could lead to feelings of distance and uncertainty of employees (Wanberg & Banas,

Resistance to change Cultural misfit Contingency misfit + - +

2000). These employees have to make the changes and find it hard to step away from stability and are likely to resist towards the change. If there is a misfit with the environment though, employees are likely to overcome the resistance to change. Because the change appears to be necessary for survival of the organization. These changes are necessary to keep their job. The perceived necessity of the change will have an influence on employee’s reactions on it. If employees believe that the dramatic, organizational changes that hurt the cultural identity are inevitable the chances of support rise. This underscores the mixed findings. In a post-merger situation an understanding of the necessity to change to keep fit with the environment therefor could create commitment and lower the resistance to it. This is due to a decrease of uncertainty because the situation becomes meaningful (Hogg, 2007). This leads to the following first hypothesis.

H1: The higher perceived contingency misfit, the lower an individual employee’s resistance to change.

Organizational changes often decrease the level of identification of employees with the new organization, (van Dick, 2004). This could harm the new Identity by lowering the organizational citizenship and cultural fit (Rousseau, 1998). Employees need a sense of continuity to have confidence in the change, and to avoid resistance towards it.

Mergers according to Giessner (2011) are “extreme organizational processes that can generate high levels of uncertainty and, therefore, can significantly influence the degree of employee’s organizational identification.” This identification is very important in an employee’s self-concept because of the internalized values and norms. The cultural fit is reflected through the organization and its employees. Essential to keep this feeling of identification (i.e. cultural fit) is a sense of continuity, which means that employees maintain the feeling that they work for the same organization. Employees identify and build trust in the merger if the continuity is kept. To create commitment for the change and lower resistance for it continuity of the cultural identity seems to be key. If

employees believe in the organizational changes’ benefits and its’ alignment with the Cultural Identity the resistance decreases. Employees tend to have a higher acceptance and support for the change (Oreg et al., 2011). Organizational change and resistance to the change are not separable of the organization’s history (Myungweon Choi, 2011). The Identity shaped by its’ history and context should not be divorced from the change. As suggested here, the changes should be in line with the core identity to maintain cultural fit, maintaining the organization’s values and beliefs could lead to a higher degree of commitment and lower degree of resistance (Lok & Crawford, 1999). Maintenance of cultural fit is easier if the entities remain stable (Caldwell, Herold & Fedor, 2004). Sticking to your cultural identity could create a higher employee acceptance of the change because of a better cultural fit. In the end this could lead to a lower resistance to change. In other words, a cultural misfit could lower the acceptance of the change and the resistance to change could rise. This leads to the following second hypothesis

H2: The higher perceived cultural misfit, the higher an individual employee’s resistance to change.

The balance between stability and change seems to be the most important challenge to be successful in dynamic periods. In finding this balance the tension between stability and change can also be translated to inertia and stress. Inertia and stress management are essential to maintain this balance (Huff, Huff & Thomas, 1992). Inertia is doing the things in current ways a form of institutionalization (Greenwood & Hinings,1996).

According to Hannan and Freeman (1984) inertial pressures have a strong impact on the succes of an organizational change. To maintain a feeling of institutionalization, the perceived cultural fit is essential. On the other side stress could arise from a misfit between the demands from the environment and the capability of the organization to react on these demands. This stress evolves from a perception that the environment and organization should find fit to perform well (Drazin and Van de Ven, 1985). This is a contingency fit which encouters stress from environmental dynamics through flexibility of the organization. The course of change efforts can only be successful if the balance between stress and inertia is found. In other words if both contingency fit and cultural fit are balanced. This leads to the following third hypothesis.

H3: Perceived contingency misfit and perceived cultural misfit are complementary in explanation of an individual employee’s resistance to change.

Overcoming resistance to change is possible if employees are involved into the change process (Dent & Galloway Goldberg, 1999), by giving them opportunities to give

feedback and empowerment to take an actual part in the change process. At this point in time science even sees possibilities to benefit from the energy of resistance to change. Resistance shouldn’t be overcome but should be utilized to create an appropriate well thought through change effort (Waddell & Sohal, 1998). As Maurer (1996) states “Resistance is what keeps us from attaching ourselves to every boneheaded idea that comes along.” Through connection and wisdom from all employees the fit of the change could improve greatly. Binding an individual to a course of action seems to be highest when there is psychological proximity (Lewin, 1943), in other words alignment with the cultural identity. Organizational change and resistance to the change are not separable of the organization’s history (Myungweon Choi, 2011). The Identity shaped by its’ history and context should not be divorced from the change. In acceptance of change organizational commitment plays a crucial role (Yousef, 1999). Highly committed employees may be more willing to accept organizational change efforts. But at the same time resist the change if there is distrust or risk of harm. Employees with high

commitment and a great sense of identification with the identity have a lower resistance to change as long as it doesn’t hurt the core values and beliefs of the organization. This acceptance and willingness to change in a post-merger situation could in the end lead to an organization’s survival or success. Thus finding cultural fit seems essential. The cultural fit is expected to influence the relation between contingency fit and resistance to change. When cultural misfit is high, the connection with cultural identity is weaker. Feelings of uncertainty of employees rise and this could reflect on contingency misfit, which will lead to a higher resistance to change. This leads to the following fourth hypothesis.

H4: When perceived cultural misfit is high, the negative relationship between perceived contingency misfit and an individual employee’s resistance to change is less negative than if perceived cultural misfit is low.

4. METHOD

4.1 Research method

The higher education industry provides an appropriate setting for testing the earlier mentioned hypotheses. After years of stability in the education industry, the

environment has undergone rapid changes. Three external changes have created stress and pressures for change. Firstly, technological innovation of internet makes worldwide knowledge and information sharing possible. Secondly, digitalization made

communication and education online possible, which made location less important. Lastly, financial structures of higher education organizations have changed and the student loan systems as well. These three external changes created turbulence in a culturally stable higher education industry. That’s one of the reasons why this survey will be conducted in the context of a higher education organization in The Netherlands. In this particular case it will be executed at the University Of Applied Sciences Of Amsterdam in the Economy and Management department. The central task of the university is to educate students in the field of economics and management. This survey is conducted in a period in which this department and its employees are in the midst of a post-merger situation between two Universities the HvA and the HES; two universities with different cultures and education systems. The dominant name of the HvA is kept and the organizational culture and structure are changing. Within some parts of the organization there has been a loss of cultural fit due to the merger and renewal of the education system. In other parts of the organization the cultural fit remained stable and only little changes evolved. The university’s link with the environment was

questionable. Due to the rapidly changing environment it seemed hard to keep up as a higher education organization. The necessity to find a better contingency fit was one of the reasons for the merger. A merger with the goals to share current knowledge and cooperate in creation of innovative and future proof education.

This will be a quantitative research executed by a survey. The survey wants to prove the relationship between perceived cultural fit, perceived contingency fit and an individual employee’s resistance to change. Most importantly, this survey wants to prove the interaction effect of perceived cultural fit on the relationship between perceived contingency fit and an individual employee’s resistance to change.

4.2 Data collection

Data collection will be done by a survey amongst employees in the Department of Economy and Management at the University of Applied Sciences Amsterdam

(colleagues). First an endorsement letter to ask permissionto execute the survey was sent to the Head of Department. After permission for execution in cooperation with the HvA, the survey could be distributed randomly to employees working as teachers at this department. The survey was spread digitally through Feedback fruits an internal

computer system at the university. In addition it was handed out on paper. Participants of the survey filled out questionnaires with questions on a 7-point Likert scale ranging from 1 (= strongly disagree) to 7 (=strongly agree). To execute the survey scales that have been developed and validated in research previously done are used. After creation of the questionnaire and introduction letter a pilot has been executed amongst a scholar, 3 teachers from the Finance department and 4 teachers from the Commerce

department. This was to check if the questions were clear and how much time it took to fill out the questionnaire. Just a few adjustments had to be done. Two questions were taken out. The final questionnaire is shown in Appendix 3. The introduction letter is

shown in Appendix 2. Once the final version of the questionnaire was set, the survey was spread amongst employees at two different Courses; Finance and Commerce in the Economy and Management Department. At the time the Department offered 431 fulltime jobs, of which 240 were occupied by men and 191 were occupied by women. The sample of this research was the teaching staff at the Commerce department with 150 teachers at the time of the survey and at the Finance Department with 110 teachers at work. The organization overall offered 2958 fulltime jobs.

The first criteria to include employees as respondents was that the respondents worked at the University of Applied Sciences for at least two years. This is important for the actual experience of the organizational change. The second criteria was that

respondents were in a position where the organizational change could be experienced (teachers and support staff). The respondents should not be part of the strategic management of the organization. This survey had a minimum of 50 respondents, with the aiming of 70 respondents in each target group.

The target groups were approximately 150 teachers at the Commerce department and 110 teachers at the Finance department. So at least a 30% response rate was expected. Eventually a 38% response rate was reached. The age of the sample varied from 21 to 67 years. The average age of the sample was 44 years.

The survey has been done during two weeks in December 2015. From the 5th _{till the 19}th of December. After spreading the questionnaires a two week deadline to hand it in was set. To reach a high enough response rate the first week a reminder was sent by e-mail. The last week teachers were reminded directly to hand them in. These reminders seemed to be necessary to reach the minimum response rate. Eventually 50 teachers from each department filled out the questionnaire.

After collection of the questionnaires the results of the quantitative research were analyzed using a statistical program IBN SPSS software. This program is able to run proper regression analysis to create visualizations of the results. In this case a

regression is most appropriate. SPSS helps to provide tables and figures which describe the relationships and effects between the constructs and moderators mentioned above.

4.3 Measures

The best way to measure the construct is to ask the individual employees about their experiences. The type of data that were used are ordinal data. In this survey four types of variables were measured and analyzed. The independent variables that were measured in this survey are contingency misfit and cultural misfit. The dependent variable that was measured is employee’s resistance to change. Cultural misfit was set as a moderating variable as well. These three variables are based on perceptions of the individual employee. Control variables that were used in the survey are employee age, gender, tenure, job experience and work department group.

To execute the survey scales that have been developed and validated in research previously done were used. As a basis for the measurement of the contingency fit the scale from Volberda et al. 2012 was included. It will provide a rich perspective on the fit at this point in time. Four constructs were taken into account: technology of the firm, organic structure, organizational culture, environmental turbulence split up in unpredictability and dynamism. The reliability of these constructs is above the 0.55 threshold level set by Ven de Ven and Ferry (1980). Technology of the firm α= 0.67, organic structure α= 0.75, organizational culture α = 0.70, environmental turbulence through unpredictability α= 0.84 and dynamism α= 0.75 (Volberda et al., 2012). All

constructs were measured on a seven-point Likert scale and contained four to six items. To measure the degree of cultural fit and the cultural identity change the scale of

Giessner 2011 was applied. This scale is appropriate for a post-merger identification research. This scale focuses on 4 sources. Firstly, the perceived necessity of the merger for the organizations survival is taken into account. Secondly, the sense of continuity is measured. Thirdly, the post-merger identification was included. Lastly the uncertainty due to the merger was added. The reliability of these constructs is above the earlier mentioned threshold of 0.55. Alphas for necessity α= 0.60, sense of continuity α= 0.76, post-merger identification α= 0.86, uncertainty α= 0.72 (Giessner, 2011). All constructs were measured on a seven-point Likert scale and contained two to four items. For the measurement of resistance to change the scale of Oreg 2006 was used. This scale was chosen because it is able to indicate individual differences of resistance to change and individuals reactions to specific change. This scale was established in three previous studies. The six sources of resistance to change mentioned in the literature review were applied: Reluctance to lose control, cognitive rigidity, lack of psychological resilience, Intolerance to the adjustment period involved in change, preferences for lower levels of stimulation and novelty and reluctance to give up old habits. These six sources are measured through the following four constructs routine seeking, emotional reaction, short-term focus and cognitive rigidity. The reliability of these constructs is above the earlier mentioned threshold of 0.55. Alphas for routine seeking α= 0.74, emotional reaction α= 0.75, short-term focus α= 0.74 and cognitive rigidity α= 0.84 (Oreg, 2006). All constructs were measured on a seven-point Likert scale and contained four to five items.

After the reliability check scale means had to be computed for Contingency misfit, Cultural misfit and Resistance to change. To create these different scale means the reflective scales had to be changed into formative scales. Contingency misfit had to be calculated by the following formula:

(market dynamism x unpredictability of changes) – (non-routine technology x organic structure) = contingency misfit

The scale means of each constructs are used in the formula and the outcome is the misfit which could be negative or positive. If it would be zero there is no misfit at all. The scale was made absolute by making all the misfits positive.

Cultural misfit had to be calculated by summing up the means of each construct:

the necessity of the merger + uncertainty + sense of community + post-merger identification = cultural misfit

Resistance to change had to be calculated by summing up the means of each construct:

routine seeking + emotional readiness + short term thinking + cognitive rigidity = resistance to change

In Appendix 1 the way these variables are build up is shown.

To create a data analysis which will generate the most reliable results the measures have been tested. Composite measures were taken into account. The two independent variables contingency misfit and cultural misfit are tested. The dependent variable resistance to change as well. Further explanation on the composite measures is mentioned in Appendix 4 Composite measures

4.5 Reliability and validity

The first step in analyzing the reliability and validity of the data is a frequency check to ensure there are no errors in the data. The data set had no errors. Then missing values were taken into account and there were no cases missing. Thus, all cases of the variables are appropriate for analysis. A number of items had to be recoded into different

variables to make sure the questions that are counter-indicative are interpreted in line with the construct. The 26 items that were reverse coded are shown in Appendix 3. Contingency fit items were divided over 5 construct; non routine technology, organic structure, innovative culture, market dynamism, unpredictability of changes. Cultural fit items were divided over 4 constructs; the necessity of the merger, uncertainty, sense of community and post-merger identification. Resistance to change items were divided over 4 constructs; routine seeking, emotional readiness, short term thinking and

cognitive rigidity. One control variable work department group had to be recoded into a dummy group where 0 = the Finance group and 1 = the Commerce group. The control variables age, gender, tenure, job experience and work department group were measured to raise validity. Additionaly a pre-test was done with the scholar and employees of both departments to make sure the questionnaire was valid.

The next step is checking, descriptive statistics, skewness, kurtosis and the normality tests. The resistance to change items have a skewness between -1 and +2 and the kurtosis between +2 and -1. This indicates that the items are not normally distributed and vary between substantially negative to substantially positive and that some are very peaked shapes and others flatter. This risk of underestimation of the variance could be reduced by having a larger sample.

The reliability analyses has been done on all of the items of the variables contingency misfit, cultural misfit and resistance to change. Cultural fit had all Cronbach’s alpha’s above 0.7 ( necessity of the merger α= 0,738; uncertainty α= 0,878; sense of community α= 0,838; post-merger identification α= 0,960 ). The scale is good for analysis.

Contingency misfit had all Cronbach alpha’s above 0,5 and some above 0.7 ( non-routine technology α= 0.546; organic structure α= 0,513; organic culture α = 0,672; market dynamism α= 0,872; unpredictability of changes α= 0,716 ). Two constructs seem to be problematic; the non routine technology and organic structure with an alpha lower than 0.7. The difference if items are deleted is too low, so no items are deleted. Resistance to change had two Cronbach alpha’s above 0.7 and two below 0.7 ( routine seeking α = 0,680; emotional readiness α= 0,759; short term thinking α=0,790; cognitive rigidity α= 0,577 ). The construct routine seeking had an Cronbach alpha of almost 0.7 and the difference if this items deleted is too low, so no item was deleted here. The construct cognitive rigidity had a Cronbach alpha that was too low and the difference if item resistance to change number 15 was deleted was more than 0,1, thus this item was deleted. This resulted in a Cronbach Alpha of almost 0.7 ( cognitive rigidity α= 0,577 to cognitive rigidity α= 0,684 ). The internal reliability of cultural fit and resistance to change is moderate to high and of contingency fit it is low.

5. RESULTS

In the following section the findings of our survey will be shown by tests and analysis done concerning Hypotheses 1-4. Firstly, the univariate analysis and descriptive

statistics will be presented. Secondly, the correlation analysis will be shown. Thirdly, the regression analysis that were executed to test Hypotheses 1-4 are explained. Finally, the moderation and interaction of cultural fit is analyzed to test Hypothesis 4.

5.1 Univariate analysis

Firstly, the normal distribution of the dependent variable resistance to change has been checked by computing the histogram shown below (Figure 2). The distribution is fairly symmetrical with a moderate negative skewness to the scores at the high end and a positive kurtosis with peaks around the center. In relation to the sample size (N=100) this is an acceptable distribution of the scores of the dependent variable resistance to change.

Fig. 2 Distribution of resistance to change

Secondly, the means, standard deviations, correlations and reliability estimates for all measures were analyzed and presented in Table 1. The means and standard deviations did not indicate problematic effects. The reliability estimates generally were

appropriate to work with in the analysis.

Thirdly, the presence of multicollinearity in the analysis was measured by the VIF score. VIF is the variation inflation factor that signals the level of non-orthogonality between the independent variables (Supphellen & Nysveen, 2001). According to Prabowo & Angkoso (2007) “VIF score less than 10 indicates there is no serious multicollinearity

problem”. All independent variables have VIF score lower than 10. Values were in the range of 1.04 to 3.13, hence multicollinearity is not a problem in this research.

5.2 Correlations

The first step after checking if the data was suitable to run analysis on was running a correlation analyses. The correlations between the 5 control variables and the 3 formative variables have been calculated. The correlation matrix has been executed in SPSS and is presented below (Table 1).

Table 1. Correlation matrix

Variables Mean SD 1 2 3 4 5 6 7 8 1 Age 47,70 9,70 - 2 Gender 0,60 0,49 -,286*** - 3 Tenure 9,22 7,68 ,546*** -,213** - 4 Experience 13,60 9,86 ,631*** -,210** ,787*** - 5 Group 0,50 0,50 -,112 ,000 ,123 ,059 - 6 Contingency misfit 6,13 4,86 -,066 ,049 -,075 -,122 ,145 (.66) 7 Cultural misfit 12,07 3,59 ,265*** -,051 ,428*** ,367*** ,035 -,022 (.85) 8 Resistance to change 13,13 3,09 -,041 ,186* ,165 ,083 ,012 -,318*** ,119 (.72)

*** Correlation is significant at the 0.01 level (2-tailed) ** Correlation is significant at the 0.05 level (2-tailed) * Correlation is significant at the 0.10 level (2-tailed)

The correlation matrix shows a correlation between the variables. There is a significant positive correlation between cultural misfit and the three control variables age,

experience and tenure. Cultural misfit and job experience are positively related. Employees with more tenure, job experience generally experience a higher cultural misfit. Another tendency to a negative correlation between control variables that is significant is gender related to tenure and experience. Both control variables have a high significant positive correlation. The relationship between contingency misfit and

cultural misfit and resistance to change is a positive relation, so small that it could be interpreted as absent.

5.3 Regression

In the next step of the analysis a hierarchical multiple regression was executed to examine if contingency misfit and cultural misfit have the ability to predict the level of resistance to change. The results of the regression are shown in the table below (Table 2). The results are shown in standardized Beta’s. This means that when the independent variable goes up with 1 standard deviation, the number that is recorded at Beta (β) should be interpreted as the number of standard deviations that the dependent variable resistance to change will go up or down. The level of significance p=0.10 is taken into consideration due to the low number of 100 respondents.

*** Regression is significant at the 0.01 level (2-tailed) ** Regression is significant at the 0.05 level (2-tailed) * Regression is significant at the 0.10 level (2-tailed)

In the first model the five control variables age, gender, tenure, experience and work department group were entered. This model was non-significant F (5, 94) = 1,869; p = ,107 and explained 9% of variance in resistance to change. It showed significant effects of the control variables age and tenure on resistance to change. Age (β= -.240, p=.07) has a significant negative effect on resistance to change. Tenure has a significant positive effect on resistance to change(β= .278, p=.09).

In the second model contingency misfit was entered into the regression which tested Hypothesis 1.

H1: The higher perceived contingency misfit, the lower an individual employee’s resistance to change.

Table 2. Regression matrix

Model 1 Model 2 Model 3 Model 4 Model 5

β SE β SE β SE β SE β SE Age -.240* .042 -.228* .040 -.247* .042 -.235* .040 -.229* .040 Gender -.202* .647 .225** .613 .218* .657 .245** .621 .239** .630 Tenure .278* .065 .281* .062 .237 .068 .236 .064 .244 .064 Experience -.023 .054 -.083 .052 -.030 .054 -.091 .052 -.098 .052 Group -.048 .626 -.005 .598 -.047 .626 .007 .597 .014 .608 Contingency misfit - - -334*** .061 - - -.337*** .060 -.332*** .061 Cultural misfit - - - - .107 .095 -.118 .090 .115 .091 Interaction - - - -.043 .018 R .301 .444 .315 .456 .458 R² .090 .197 .099 .208 .210

The model presents the regression results of perceived contingency misfit on an individual employee’s resistance to change. The model was significant with p= .002. In this second model the total variance explained by the model was 19,7% F (6,93) =3,801. This is a 10,7% additional explained variance of resistance to change (R² Change= .197; F (6, 93) = 3,801; p= .002) due to the entrance of contingency misfit. Contingency misfit has a significant negative effect on resistance to change (β= -.334, p=.001). Hypothesis 1 is supported.

In the third model cultural misfit was entered and contingency was taken out of the model to test Hypothesis 2. The model presents the regression results of perceived cultural misfit on an individual employee’s resistance to change.

H2: The higher perceived cultural misfit, the higher an individual employee’s resistance to change.

The model was non-significant with a p>.05. In this third model the total variance explained by the model was 9.9% F ( 6,93) = 1.711; p= .127 ). This is just a 0.9% additional explained variance of resistance to change (R² Change= .099; F (6,93) = 1,711; p= .127) due to the entrance of perceived cultural misfit. Cultural misfit has a non significant positive effect on resistance to change (β= .107, p=.339). Hypothesis 2 is not supported. There is a very small positive relation that is non-significant.

In the fourth model contingency misfit and cultural misfit both were entered in the model to test Hypothesis 3. The model presents the regression results of contingency misfit and cultural misfit on resistance to change.

H3: Perceived contingency misfit and perceived cultural misfit are complementary in explanation of an individual employee’s resistance to change.

The model was significant with a p=.003. In this fourth model the total variance explained by the model was 20,8% F (7,92) = 3.452; p= .003). This is just a 1,1% additional explained variance of resistance to change (R² Change= .208; F (7,92) = 3,452; p= .003) compared to the model in step 2 due to the entrance of cultural misfit together with contingency misfit. The regression model is significant, with Beta values of the independent variables contingency misfit (β= -.337, p=.001) and cultural misfit (β= .118, p=.260). Contingency misfit has significant negative effects on resistance to change. Cultural misfit has non-significant small positive effects on resistance to change.

Contingency misfit and cultural misfit seem to have an effect on resistance to change and a small complementarity has been found. Hypothesis 3 is supported.

In the fifth model the interaction variable of contingency misfit and cultural misfit was entered in the model to test Hypothesis 4. The model presents the interaction effect on resistance to change.

H4: When perceived cultural misfit is high, the negative relationship between perceived contingency misfit and an individual employee’s resistance to change is less negative than if perceived cultural misfit is low.

The model was significant with a p=.005. In this fifth model the total variance explained by the model was 21% F (8,91) = 3,017; p= .005). This is just a 0,2% additional

compared to the model in step 4 due to the entrance of the interaction variable. The regression model is significant, with Beta values of the independent variables contingency misfit (β= -.332, p=.001), cultural misfit (β= .115, p=.276) and the interaction variable (β= -.043, p=.663) . Contingency misfit has a significant negative effect on resistance to change. Cultural misfit has a non-significant positive effect on resistance to change. The moderating effect of cultural misfit on the relation between contingency misfit and resistance to change is non-significant. The interaction effect is absent. Hypothesis 4 is not supported and is rejected.

6. DISCUSSION / CONCLUSION

6.1 Discussion

The purpose of this research was an exploration of the relationships between

contingency fit, cultural fit and resistance to change in a post-merger situation. Within a small sample of 100 respondents from two departments of the University of Applied Sciences in Amsterdam support has been found for some of these relations. The findings extend research on post-merger fit processes. The current research provides a

perspective that combines contingency fit and cultural fit in a post-merger situation. It is relevant to have a better view on which type of fit deserves focus in such a change process.

The notion that contingency misfit leads to a lower resistance to change found strong support in this survey. This is in line with Fiol’s (2002) view that changes find support if employees see benefits for their organization. The necessity of the change to create external alignment again clearly has an effect on employee’s resistance to change. To keep the organization in the game and maintain their jobs, employees will be more flexible to change. This decrease of uncertainty due to the possible external re-alignment mentioned makes the situation meaningful (Hogg, 2007) and lowers the resistance to change. Managers could decrease the resistance to change by giving a clear view on the necessity of the change to tighten the gap between the organization and the environment.

The results of the survey imply that the relation between cultural misfit and resistance to change is absent. The absence of this relationship could be due to the specific post-merger situation. The organizational change has been transformational, a change where the current cultural identity is replaced for a new one. The organizational citizenship (Rousseau, 1998) is affected by these types of changes. The impact of cultural fit in such a post-merger situation on resistance to change seems to disappear. The effect of cultural fit on resistance to change in another situation with continuous small

adaptations, incremental changes that are in line with the core Identity could be very different. If the entities remain stable (Caldwell, Herold& Fedor, 2004) the cultural fit could be cherished. Establishing continuity and staying in cultural fit could lead to decreased levels of resistance to change. Another possible explanation could be that cultural misfit has a U-shape relationship with resistance to change. If there is a strong cultural fit resistance could be low because there is a certain trust in the organization’s strategy. If there is a weak cultural fit resistance to change could also be low because employees want to find a new feeling of identification with the organization again and perceive the change as the pathway towards it.

The complementarity of contingency misfit and cultural misfit in explanation of resistance to change has found support, to a very small extent. The combination in which contingency misfit and cultural misfit are complementary subscribes the search for balance as mentioned in earlier research by Huff et.al (1992). Inertia and stress are interdependent in creation of a tendency to be willing to change. Inertia in this case was sticking to the current ways of doing things, i.o.w. sticking to the cultural identity and maintaining the cultural fit. Stress could be a consequence of a misfit between the organization and the environment, which creates a realization of necessity of the change amongst employees. In this post-merger situation the stress of missing external

alignment seems dominant in relation to resistance to change. A situation where employees have a feeling that the change implies maintenance of the cultural identity and at the same time minimizes the gap due to the contingency misfit could be the ideal balance in another more stable situation. This is in line with Orlikowski’s (1996) view that minor adjustments are the essence to create an organizational change. Giesner goes a step further and(2011) suggests that understanding the necessity of the merger could help employees to reconstruct a sense of Cultural Identity. This could explain the empirical findings from this research that perceived necessity of the organizational change for external alignment creates the lowest resistance to change. The uncertainty due to the merger in this way is accepted. And legitimacy of the merger is shared amongst employees.

The impact of cultural misfit as a moderator on the relation between contingency misfit and resistance to change in a post-merger situation is not clear. Given the results in this research cultural misfit does not have an influence on the perception of the need for external alignment. The statement of Greenwood and Hinings (1996) “ That the greater the embeddedness, the more problematic is the attainment of radical change” is not supported in this research. Employee’s perceptions about the necessity to change to find external alignment again is not influenced by the cultural misfit. The need to change to stay in the game (Wanberg&Banas, 2000) seems to create flexibility and adaptiveness amongst employees regardless of their perceptions about the cultural misfit. Fiol(2002) described this point of view by stating that transformational change and commitment to it is only possible through movement away from the original identity. Thus, the

contingency fit itself has a strong impact on the way employees perceive the change. Organizational mergers sometimes are necessary to construct contingency fit and to stay in the game also in the perceptions of employees. Even if this creates a temporary cultural misfit employees could be willing to commit to change and lower resistance to it.

6.2 Contributions

This research aimed to tighten the gap between the existing literature that looks from contingency fit or cultural fit perspective. It combines the effect of perceived

contingency fit with perceived cultural fit on an individual employee’s resistance to change in a post-merger situation. In previous research the two types of fit were not combined yet.

Through comparison of perceived contingency fit and perceived cultural fit and the effect of these two types of fit on an individual employee’s resistance to change, this research explains which fit is most influential on resistance to change in a post-merger situation. Contingency fit appeared to be dominant in this specific post-merger situation. Finding a strategy for change to create external alignment could be necessary for succes of the firm. If there is a perceived contingency misfit and external re-alignment is