This thesis analyzes the influence on the organizational identity of an acquired organization when it comes to an acquisition with a low degree of integration. Based on interviews in two organizations of the automotive sector the thoughts and perceptions of involved organizational members regarding their organizational identity were investigated and evaluated. The findings highlight that even a low degree of integration lead to a shift within the acquiree´s identity. This change emerged through the impact on organizational structures and processes in the acquired organization. However, the effects on organizational identity are both negative and positive.

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Hardly a day goes by without news and reports about new or emerging speculative mergers and acquisitions. In 2015, over twenty mergers and acquisitions have been announced with a total transaction value above four billion US dollars (Handelsblatt, 2015). In addition, the rise of global spending, which increased by around 45 percent from 3,245 billion US dollar in 2012 up to 4,708 billion US dollar in 2014, underline the importance of mergers and acquisitions as a tool to expand companies (van Dijk, 2015). Besides the price, the amount of realized mergers and acquisitions increased by 11 percent within the same time period (van Dijk, 2014). In literature this mergers and acquisitions are commonly seen as a strategic tool for external growth or diversification (Birkinshaw, Bresman, and Håkanson, 2000). Moreover, it can facilitate the access to resources such as knowledge and technology or for the achievement of economies of scale (Dyer, Kalem and Singh, 2004; Harzing, 2002). However, most research found that mergers and acquisitions tend to fail and do not fulfil the expectations that were previously taken by the acquiring organization. More specifically, Christensen et al. (2011) argued that mergers and acquisitions have no positive influence on both, the companies and the shareholder value.

In particular the automotive industry, which is hailed by Peter Drucker as “industry of industries”, mergers and acquisitions increased since the last decade. Especially cross border deals became more popular and illustrated around 36 percent of the deals made in the automotive industry since 2007 (Deloitte, 2012) In particular mergers and acquisitions involving the Brazilian, Russian, Indian and Chinese (BRIC) market play a significant role due to cost advantages and large, potential consumer markets, (Roland Berger, 2014).

During the organizational life time, mergers and acquisitions constitute complex and unexpected external influences, which arise tensions among the involved companies (Drori, Wrzesniewski, and Ellis, 2003). Besides, the effect on company’s objectives and missions, acquisitions have an impact on the company’s boundaries and practices, which in turn form the organizational identity (Scott and Lane, 2000). As a result, a change in the understanding of who we are and what the organization want to be arises among organizational members (Zaheer, Schomaker and Genc, 2003). Moreover, identity creation is a process involving shared perceptions and beliefs of organizational members (Drori et al., 2003). Giving individuals a key

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such as mergers and acquisitions could illustrate a major impact on thoughts and perceptions, which in turn influences organizational identity.

To avoid dangerous tensions within the acquisition process a carefully organized integration is necessary to consolidate the acquiring and acquired organization (Haspeslagh and Jemison, 1991). So far, research highlighted that high levels of integration within the post-acquisition process led to the change, dilution or even the destruction of an acquiree´s organizational identity (Dutton and Dukerich, 1991; Gioia, Schultz and Corley, 2000; Melewar and Harold;

2000; Empson, 2004) However, the impact of a low level integration on the acquiree´s identity is not clear yet.

In this thesis a qualitative case study is used to analyze the organizational identity after an M&A with a low level of integration of the acquired company. In this regard, this research aims to highlight new insights for the management as well as the science about how involved companies should organize the balance between identity preservation and maximal synergy creation.

1.1 Problem Definition

In the field of organizational identity a wide range of definitions and therefore, contradictory perspectives can be found in literature (Whetten, 2006). Regarding Hatch and Schultz (1997) organizational identity is build up through a collective of organizational members who have a common and shared comprehension of their organization. Moreover, this is reflected in their perception and thoughts (Drori et al., 2000). In the traditional form organizational identity is described as central characteristic of a company, which is stable and distinctive from other organizational identities (Albert and Whetten, 1985). However, more recently scholars argue that the traditional concept is too simple. For instance, Gioia, Schultz and Corley (2000) scrutinized the stable nature of identity and in contrast, highlighted its dynamic character.

Moreover, the authors illustrated identity as important factor for organizations to survive in steadily shifting environments. Due to this dynamic and changes within the organizational environment, companies need to adjust their organizational identity occasionally and therefore, it can be seen as constantly redefined construct (Hatch, Larsen and Schultz, 2000). In addition, Haslam, Postmes and Ellemers (2003) stated that the central point of identity creation takes

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place within the organizational collective and is rooted in their behaviors and beliefs. Based on this knowledge this thesis defines organizational identity as dynamic construct influenced by the thoughts, beliefs and perceptions of its organizational members and thus, makes it unique in comparison to others.

As mentioned before organizational identity faces different and usually unexpected external influences over time, which can affect the organizational members and therefore, the identity.

In particular, acquisitions represent a situation where the organizational member’s perception gets influenced, which in turn destabilizes the organizational identity (Empson, 2004). In the past, different research focused on post-acquisition integration as a factor for value creation (Pablo, 1994). However, due to the high failure rate of mergers and acquisitions the level of integration plays an important role and determines the value creation (Birkinshaw, 1998). In this regard, the integration of individuals depicts a challenge for acquiring organizations and illustrates the importance of the social dimension. Moreover, the definition of identity as “who the company is” and “how they do things” suggests that identity should not neglected within the integration process (Zaheer et al., 2003). By considering organizational identity as a social resource for the companies and competitive advantage, the significance of the social dimensions within the post-acquisition process is further underlined (Reger et al., 1998).

Based on the previous findings on theory, organizational identity as a strategic resource depicts a difficult management problem in the context of acquisitions. Moreover, it led to the assumption that a high level of integration and the resulting strong influence on organizational members is not necessarily favored by the management. Instead, preserving the autonomy of acquired organizations might be beneficial to reduce the influence on organizational members and retain the organizational identity as a competitive advantage. However, the goal to preserve organizational identity within the acquisition process comes not without evolving tensions due to diverse objective targets. For example, on the one hand the acquirer wants generate many synergies, which would imply a higher integration of the acquired organization, while on the other hand it also aims to keep the influence on the acquiree´s organizational members as low as possible to preserve their organizational identity. Taking this tensions into consideration, organizational identity can be seen as key within the acquisition process. However, previous studies only focused on a high level integration within acquisition process and the effect on organizational identity, whereas mergers and acquisitions with a low degree of integration has

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Taking this knowledge into account, this research proposal aims to investigate the described literature gap and focuses on the influence on organizational identity in the context of a low level post-acquisition integration. In particular, this thesis concentrate on acquisitions, in which the acquirer facilitate the preservation of the identity of the acquired organization. So far, little is known about how acquirers challenge the preservation of the acquired company’s identity after the acquisition. Based on the given background the central question of this thesis can be formulated as:

How does a low level of integration influence the organizational identity of an acquired organization after the acquisition?

1.2 Research Objective

The goal of this thesis is to generate valuable insights for scientists as well as for practitioner by answering the stated research question.

With respect to managers, the objective is to provide advice for those who are challenged by issues regarding organizational identity within the acquisition process. More specifically, how the management can handle possible threats that organizational members face after the acquisition. Especially, this thesis aims to provide insights for practitioner who are confronted with identity challenges in two different forms of acquisitions: First, acquisitions in which the acquiree´s identity is considered to be crucial for their success and hence, need to be preserved.

Second, acquisitions, in which the acquiree´s organizational identity is not in line with the identity of the acquiring company. As a result, the generated findings help managers to gain knowledge about the opportunity, which arises through the protection of the organizational identity and how to handle and organize this process effectively. Especially for multinational organizations in dynamic high-end markets, this knowledge can be useful for their acquisitions.

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2. Theory Review

In this part a closer look on academic literature is presented to illustrate the theoretical background of acquisitions, the integration process and organizational identity. In the end, the link between both, post-acquisition integration and organizational identity is specified.

2.1 Mergers and Acquisitions

So far, many studies treated the topic mergers and acquisitions out of different perspectives (Birkinshaw, Bresman and Håkanson, 2000). In this research the focus lies on organizational identity and its influence by acquisitions. Therefore, it does not expose other perspectives on mergers and acquisitions in-depth. In contrast, this thesis sheds light on the post-acquisition integration process and human dynamics, such as the influence on individuals.

Although mergers and acquisitions is a common used term for the mergence of companies, the expression can be separated into two forms. A merger is a fusion of at least two independent companies coalescing a new organization. In contrast, an acquisition is the purchase of one organization or parts of it (Wirtz, 2014). This means that an acquisition does not necessarily require to create a new organization. Gemünden and Frensch (2007) define merger and acquisition as bonding process of companies, where one organization is dominating the other one. However, within literature boundaries between mergers and acquisitions are blurred and mostly used as synonym for each other (King, Dalton, Daily and Covin, 2004). Therefore, this theory review is based on mergers as well as on acquisitions. In this thesis, the term acquisition is used to describe a takeover of an organization by another one.

In the following, an outline of theory of integration and human factors within the acquisition process is presented. In particular, post-acquisition integration constitutes a fundamental part within merger and acquisition literature and plays an important role for the process perspective.

In general, Haspeslagh and Jemison (1991) form the basis with their description that value is created after the acquisition. In this context, Pablo (1994) stated that integration means a change of organizational functions and structures as well as the combination of cultures to create a new functioning organization. In order to create the desired value companies need to consider the integration of tasks and humans within the post-acquisition process (Birkinshaw et al., 2000).

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Whereas, the integration of tasks is necessary for synergy creation, the integration of humans is significant for satisfaction among organizational members. Birkinshaw et al. (2000) argued that by integrating humans a shared identity can be achieved and thus, influences the integration of tasks positively. Hence, this leads to a higher value. Moreover, Pablo (1994) described that integration is determining the post-acquisition performance and a too high as well as a too low degree of integration result in decreased value creation or even value reduction.

The level of post-acquisition integration can be seen as the degree of organizational change in a technical, cultural and administrative nature and is dependent on the organizational requirement for autonomy and strategical independence (Pablo, 1994). In addition, the aims of an acquisition further determine the degree of integration (Schweiger and Walsh, 1990). As stated before, the level of integration can vary between low and high (Haspeslagh and Jemison, 1991). In this regard, a high level of integration comprises an entire adaption of structural and cultural aspects by the acquired organization. In contrast, a low level of integration contains less shared resources and risks (Haspeslagh and Jemison, 1991; Pablo, 1994). Considering these findings, this thesis focuses on acquisitions, where the acquired company stays independent because of a low level of integration.

As mentioned by Birkinshaw et al. (2000) human aspects can be linked to the post-acquisition integration process. Therefore, it is not surprising that many researches put their attention on this topic. In particular, researches in the field of human resource management and organizational behavior observed the emotions and actions of organizational members in the context of mergers and acquisitions. For instance, Drori, et al. (2003) founded that during the acquisition process different dynamics of individuals result in resistance within the integration phase. To avoid this negative tensions Birkinshaw et al. (2000) suggested to be aware of expectations and concerns among involved organizational members.

Hofstede (1990) defined organizational culture as a collective building of minds, which is crucial to differentiate members of one company from another one. Buono, Bowditch and Lewis (1985) argued that cultural inconsistence between organizations lead to a failure of acquisitions because of varying emotions among organizational members. Supported is this by the findings of Datta and Puia (1991), who stated that a low level of integration and hence, an unnecessary adoption of cultures reduce the risk of failures. However, the danger that organizational

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members face within the acquisition process is not only traced back to cultural incompatibility, but also to organizational identity (Zaheer, Schomaker and Genc, 2003).

2.2 Organizational Identity

As scrutinized in the previous part, theory on acquisitions highlighted organizational identity as a crucial factor for both, tensions and conflicts when it comes to environmental changes (Zaheer et al., 2003).

Identity is an often investigated topic in research. However, there is no concordant definition and perspective of organizational identity. Rather, often it is used as a combination of ideas or concepts (Corley, Harquail, Pratt, Glynn, Fiol, and Hatch 2006). Previously, identity often has been examined as loose set of thoughts and concepts (Albert and Whetten, 1985). Albert and Whetten (1985) described in their traditional view identity as construct of collective ideas and understandings among organizational members. These understandings of diverse characteristics are stable but different and therefore, distinctive between organizations. In addition, identity is usually rooted in the company’s nature such as the mission and values as well as its ideology and beliefs (Ashforth and Mael, 1996). More recently, the definition of organizational identity is connected to individual’s notion and understanding of organizational business domains, its values and competences (Corley et al. 2006). Albert, Ashfort and Dutton (2000) illustrated that when individuals answering the self-reflective question of who they are as a company organizational members place themselves as well as the organization in a social construct. Because of the central, enduring and distinctive character of these attribute, organizational identity can be seen as referent for organizational members when they are operating or talking on behalf of their company (Whetten, 2006).

Corley et al. (2006) reflected in their review on Albert and Whetten´s (1985) research three criteria (central, enduring and distinctive) of organizational identity. Central means that organizations see attributes as essential for their company. These attributes are anchored in the beliefs of organizational members and shared by most of them (Corley et al. 2006).

Distinctiveness describes that organizations have a unique set of attributes, which are necessary to separate organizations (Corley et al. 2006). Enduring illustrates that organizational identity is stable over time and resistant when it comes to minor changes within the organizational

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While the traditional view defined organizational identity with an enduring character, which remains constant over timer, other theories described identity as concept, which is flexible and vulnerable when it comes to organizational change. For instance, Gioia et al. (2000) defined identity as relative dynamic concept, which opens the possibility for a redefinition by organizational members. Moreover, they stated “seeming durability of identity to be actually contained in the stability of the labels used by organizational members to express who or what they believe the organization to be, but that the meaning associated with these labels changes so that identity is actually mutable” (Gioia et al., 2000: 64). Hence, they traced back the liable attitude of organizational identity to the continued interaction with the image of organizations.

However, Gioia et al. (2000) agreed that despite their argumentation a certain level of order and steadiness in the concept of organizational identity is needed. For this paradox and the organizational necessity to learn to change on the one hand, but also to stay somewhat constant in mind on the other hand, they used the term of “adaptive instability” (Gioia et al., 2000: 64).

Hence, this adaptive attitude of the company’s identity is necessary to endure in changing environments.

Considering this paradox, organizational identity theory examines the concept of identity not only as a strong ability, but also as a potential liability. On the one hand, studies such as the work of Ashforth and Mael (1996) described the significance of organizational identity to empower individuals and support strategical choices and actions within the company. In other words, identity can lead to a better consistency of the chosen strategy and therefore, increase the organizational performance. Moreover, in the case of lacking external structures identity becomes important to keep the organization on track and to support it following its strategy (Albert, Ashforth and Dutton, 2000). Thus, the organizational identity can serve as steering wheel to survive when it comes to organizational change. On the other hand, organizational identity can be a potential liability, which endorse inertia of executives (Ashforth and Mael, 1996; Fiol, 2001). This was further supported by Fiol (2001) who stressed that organizational identity illustrate a burden when it comes to change because it is deeply anchored and widespread within the company. Furthermore it emphasizes that organizational members get blind for new matters, which are not align with their existing thoughts. Moreover, organizational learning is hampered when companies try to preserve their identity (Brown and Starkey, 2000). In addition, Bouchikhi and Kimberly (2003) stressed that identity hinder organizational change due to established identity burdens. In other words, organizational

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identity can be a liability because it establishes boundaries, which increase inertia and consequently affect the company´s ability to survive external change.

This problematic leads to the question to what degree organizational identity is a strategical resource. However, this topic is not deeply observed so far. A few studies stated that identity can deliver a competitive advantage (Pratt and Foreman, 2000; Reger et al.,1998), whereas others such as Fiol (1991) argued that identity is a key for an enduring competitive advantage based on stability. However, she later revealed her assumption and claimed that identity needs to be flexible in order to gain temporary competitive advantages in a changing environment (Fiol, 2001). Nevertheless, the need for a further analysis about to what extent organizational identity leads to competitive advantages exists (Puusa, 2006).

2.3 Mergers and Acquisition and Organizational Identity

In the previous parts not only the concepts of both, organizational identity and mergers and acquisitions have been pointed out, but also the necessity to combine both concepts. Therefore, this section reviews theory about organizational identity in the context of acquisitions.

Acquisitions illustrate a radical, external impact on the action and strategy of companies and lead to a shift within the organization. Thus, changes evoke uncertainty, potential disagreements and a shift in the company’s structure and status (Ashfort and Mael, 1996). This findings are supported by Zaheer et al. (2003), who stressed that identity is as important as culture in the post-acquisition integration process.

However, organizational members of the acquired company often feel threatened by the acquirer’s identity when established organizational burdens begin weakening due to the integration process (Bartels, Douwes, Jong and Pruyn (2006). Moreover, the perceived danger by members of the acquired company lead them to protect their identity even stronger (Dutton, Dukerich and Harquail, 1994). By doing this, they tend idealize their organization and maximize experienced differences as well as minimize similarities between both, the acquiring and acquired organization (Empson, 2004). Consequently, organizational identity is a crucial part for an effective integration and therefore, executives need to concern identity issues

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3. Methodology

In this section a description about the steps that need to be undertaken to answer the stated research question is provided. First, a research method justification is given to explain the choice of a qualitative research. Second, the empirical setting is presented. Lastly, the method for data collection is introduced and followed by the form of analysis.

3.1 Justification of the Research Method

For this research a qualitative, single in-depth case study approach is used to investigate the research question. Due to the limited time framework the collection of real time data is not appropriate and therefore, this study relies on retrospective sense making. Moreover, this method allows to receive a deep knowledge of mechanism and dynamics, which are located in the management of the post-acquisition integration process. Furthermore, the use of a qualitative case study approach is applied for the following reasons.

A key element for the appropriate choice of a research method is the examined research question itself (Yin, 2013). In this research the addressed question is expressed in form of

“how” and aims to investigate how the management deals with organizational identity in the case of an acquisition. Therefore, Yin (2013) highlighted a qualitative case study approach as the best matching method to answer questions about the “how” or “why.” Moreover, this approach is flexible and provides the opportunity to adapt the research design in the subsequent research process (Eisenhardt, 1989; Marshall and Rossman, 1995). This is highly important for this thesis because it concerns with complex processes that include different components and take place in a setting, which is not well understood yet. Especially, for these complex issue and the analysis of social dimensions, which are dependent on the context, a case study research suits most (Marshall and Rossman, 1995). To understand social phenomena a rich data set is necessary. This data can be gathered and provided through a case study because it allows an extensive contextual description in comparison with other research tools (Welch, Piekkari, Plakoyiannaki, & Paavilainen-Mäntymäki, 2010). Moreover, an advantage of using a case study is that it can deal with multiple evidences, which in turn enables a profounder knowledge of the analyzed issue (Yin, 2013).

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However, there are concerns about the use of a case study for the addressed research question, too. Despite the given strengths and identified appropriateness, Yin (2013) illustrated some concerns. For instance, a potential lack of accuracy, due to the flexibility of the design and missing systematical structures could arise. To oppose this, the documentary of modifications in the research design is made carefully. Another concern of Yin (2013) is that, case studies produce a vast number of data, which is difficult to analyze since a lack quantitative tools exists.

Moreover, he argued that this method is time intensive. To overcome this concern, the collected data is prioritized and an exact time management based on a set up time frame is applied. A different concern is stated by Eisenhardt (1989). He argued that the resulting theory might has the consequence of a lack of ease because of the vast number of data. Moreover, the generated theory could be too restricted and specific. While by focusing on a specified field within the area of identity the lack of ease is covered. The concern about specificity is mitigated as this research examine on a topic which is widely shared in business. However, the dominating concern about case studies is the little or even missing possibility to generalize findings and therefore, the credibility is considered to be lower (Yin, 2013). Although this cannot be rejected, the strengths and advantages outweigh most concerns and further support the suitability of a qualitative case study for this research question.

3.2 Case Selection and Empirical Setting

In this research a single case study approach is used to analyze the dnyamics in a particular context. In line with Yin (2013), this method is especially appropriate if the observed object reflects an event, which is frequently seen or informative. However, the selection of the right case has to be choosen carefully to gain significant results (Eisenhardt, 1989; Yin, 2013). Thus, this case study is designed based on the subsequent criteria:

First, the organizations are part of an industry that is affected by frequent acquisition activities.

Second, involved parties have a strong organizational identity that can be observed. Third, the objects of analyis have been part of an acquisition process within the last four years, so it is possible to access members that experienced the integration process. Lastly, the acquired company was treated as an autonomous company after the acquisition.

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By applying this criteria two companies named GAMMA and DELTA (fictitious to maintain anonymity) have been selected. DELTA acquired GAMMA in 2012. Both are part of the automobile sector and their headquarters are located in Germany. In the following both companies are briefly introduced.

GAMMA

DELTA

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3.3 Data Collection

As explained in the previous part this research is based on primary as well as on secondary data.

The primary data present the main source of the collected data and derives from semi-structured and open-ended interviews. The interview guideline is self-provided (Appendix A and B).

Interviews are conducted with members of GAMMA and DELTA. By using interviews information about sensitive topics can be collected. Hence, data regarding emotions, personal insights and feelings can be gained. This would hardly possible with any other methods. By using a semi-structured interview, all participants answer the same line of questions and therefore, a good comparability is ensured. The organizational identity of the acquired company is the unit of analysis. It is displayed in the perception of the members since the announcement day until the start of this study (around four years after the acquisition). The individual or the organizational member illustrate the unit of observation. Interviewees are members from both, GAMMA and DELTA. By using answers of the respondents a representation of the acquired company’s organizational identity can be reconstructed and therefore, allows the evaluation of its identity. Moreover, the identity is seen as a commonly constructed picture rather than a detailed illustration of individual variations in their perceptions.

Primary Data

The most of the primary data was gathered at the in Germany located head offices of GAMMA and DELTA. Furthermore, one interviewee of GAMMA was interviewed via telephone and two respondents of DELTA via video call. The involved respondents have been members of the organization before the acquisition occurred. Hence, employees provide the possibility to examine the identity before and after the acquisition process. In sum, seven interviews were conducted, four with employees of GAMMA and three employees of DELTA. In average, the interviews took between 45 and 75 minutes each.

The interviews followed the 3 probing techniques of Russel (2006) to generate the best data possible out of every interview. The “Echo Probe” is useful to gain more detailed information by summarizing the interviewee’s last statement before going on with the following questions.

By listening his or her statement again, the interviewee gets the feeling that the interviewer is familiar with the subject and therefore, enhances the possibility for additional and relevant details. Supported is this by applying the “Phase Assertion Probe”, where the interviewer try to give the interviewee the impression that he has further knowledge about a certain subject. In

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turn, the respondent feels to contribute more detailed insights. Especially, for sensitive topics such as organizational identity, the “Phased Assertion Probe” can be a helpful tool. Another used method is the “Long Question Probe”, which is useful for interviewers who are acquainted with the topic. Therefore, the interviewer asks more complex questions and as a result, receive longer answers that usually are more detailed in content.

To enable the collection of detailed data and to make sure to have a well-mannered and respectful dialog with eye contact, the interviews were recorded and documented afterwards.

The interview itself was semi-structured to foster the interviewer to follow a similar line of questioning. This provides a flexible structure, which allows to talk about crucial subjects that arose during the conducted interview and gain further data (Gioia, Corley and Hamilton, 2013).

In appendices A and B the guidance of the conducted interviews with GAMMA and DELTA are illustrated.

In Figure 1 information about the respondents such as their belonging to the company and their position within the organization can be found. The range of positions varied from members of the top management down regular office employees (non-managerial). Although respondent number seven retired two years ago, he was an essential source to gain important information from a senior manager on the acquisition process.

In line with Yin (2013) the limited number of respondents and divisions is caused by limited availability, time constrains and suitability. However, the sensible research subject represent the largest boundary. Numerous potential interviewees from GAMMA declined to talk about identity because it seems to be too contested, political and multifaceted. In turn, they stated this cannot be covered by a study like this. Moreover, one employee of GAMMA refused the interview because it first needed to be approved by the press department and the publication of this information might be not desired by the Human Resources department. For this research, especially the rejection of GAMMA members implies, that their organizational identity might be affected and therefore, it is assumable that this impact was negatively perceived by the employees of GAMMA. Hence, an important inside knowledge was already gained at the beginning of the data collection.

Secondary data

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For the collection of secondary data annual disclosures and press reports of both were reviewed.

Moreover, data regarding the research question was derived from automotive related articles as well as international business news and the company´s webpages. Unfortunately, information through internal newsletters or internal announcements since the beginning of the acquisition process could not be reviewed. This fact was caused by an insufficient internal communication during the acquisition process, which was further confirmed by most interviewees. However, the deficits in formal internal communication at GAMMA present an interesting finding itself.

In general, secondary data collection support the interpretation of results and enables an additional perspective on main issues.

3.4 Data Analysis

Following to Burnard (1991) the analysis of the data began with reviewing the interview transcript and getting familiar with the gathered data. Thereby, the aim was to identify statements, which were explicit or implicit related to the identity of the acquired company. As a result, a categorization of the important collected data such as the grouping of similar data into one category and upper categories were created. Afterwards, the upper categories were, by using the process of collapsing, restructured again to eliminate or combine repetitive or similar categories (Burnard, 1991). In total, seven categories were set up (Appendix A - J).

Subsequently, by analyzing the transcripts and coding them to the category headings, relevant interview statements were related to the corresponding category. The coding was assigned to the stated insights of the respondents and to the interpretation of tose made by the researcher.

In the following, a second coding was made within each category. After the termination of the coding process, the wrapping up process of the findings started.

4. Findings

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5. Discussion

In this thesis the influence of an acquisition with a low extent of integration on the acquiree´s organizational identity is analyzed. By applying a qualitative case study, interviewees with both, the acquiring and acquired organization have been conducted. By investigating members’

perceptions of the relevant identity, the influence on organizational identity was evaluated. The results provided a significant amount of findings, which help to understand the topic. This section discusses these results and gives implications for the research for practice and science by comparing and considering previous research. Following, limitations and suggestions for further research are highlighted. Generally, results suggest an asymmetrical assessment of the research question. Although, DELTA´s members evaluated the acquisition positive and beneficial, the expressed perceptions of GAMMA´s members were predominantly negative.

Firstly, consistent with DELTA´s decentralized management of its multi-brands, DELTA confirmed GAMMA that even after the acquisition they would remain autonomous in its organizational structures and thus, preserve its organizational identity. However, results demonstrate that this is not the case and therefore, can only be partially supported. Although, GAMMA still remained an individual perceived brand and kept its local headquarter, exertion of control by DELTA was realized, such as the adjustment of organizational structure and processes. The effect of this change was perceived stronger than claimed originally by DELTA before. The most significant examples are the change in GAMMA´s organizational structures within the purchase department and the determined organizational procedure of staffing by DELTA´s management. In line with Haspeslagh and Jemison (1991) the acquisition and the integration process can be considered as a low integration process.

Secondly, although DELTA aimed to protect the organizational identity of GAMMA, the acquisition actually had an influence on it. The circumstance that many potential interviewees rejected to talk about the topic and further expressed worries confirms the finding that there was an actually impact on GAMMA´s identity. Thus, this research confirms the articles of Drori et al. (2013) and Melewar and Harold (2000), by demonstrating that the organizational identity of acquired companies is influenced by the extent of integration. Furthermore, it supplements their research by showing this influence in the setting of a low degree integration. In addition, this thesis is complementing the findings of Ashfort and Mael (1996), Bartels et al. (2006), because it confirms the use of acquisition for the examination on organizational identity.

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Thirdly, interviewee described various determinants for identity roots, when they answered on the question what their company stands for. Therefore, they subordinated different labels to each root, which should explain the core of their company. As a result, all participants experienced each label as being positive what is in line with the findings of Coley et al. (2006).

Furthermore, all employees were aware of the positive external perception of GAMMA.

Interestingly, when answering the question how GAMMA´s member would describe the organizational identity, they never referred to attitudes or the name of DELTA. This is contradictory with the findings of the previous paragraph. It rather proposes less influence on GAMMA´s identity than emphasized by the multiple interview rejections. Consequently, the circumstance that GAMMA´s employees do not connect any DELTA characteristics with GAMMA, raises the assumption that GAMMA´s influence on DELTA´s organizational identity could not have been immoderate.

Fourthly, the findings show that the announcement of the acquisition was perceived as threat for GAMMA´s identity by its members. This threat emerged on an individual as well as on an organizational level. On an individual level, the announcement and the upcoming acquisition led members to challenge their personal identity by questioning their understanding of who they are today and who they will be tomorrow. This complements the study of Albert et al. (2000) where they stated that self-reflection is useful to situate organizational members and the organization itself in a social space. On an organizational level, GAMMA´s employees felt that their organizational identity is endangered. This supports the findings of Zaheer et al. (2003), who stated that acquisitions lead to higher threat perception on an organizational level, which is also reflected in the organizational identity

However, this thesis demonstrate that the occurred acquisition of GAMMA and its integration into DELTA did not only came along with identity threats. Rather, it generated opportunities for a strengthening of GAMMA´s identity. Due to the emerged threat for GAMMA´s identity it unintentional enhanced GAMMA´s organizational position. Moreover, GAMMA´s members now valued aspects even more, which distinguished GAMMA from DELTA as well as from its competitors. This is in line with Ashforth and Mael (1989), who demonstrated that organizational members clearly value aspects of their organizational identity when their identity gets threatened. Consequently, belonging to the Automotive Group and the competition among

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DELTA´s subordinated subsidiaries contributed to the enrichment of GAMMA´s identity because it highlighted its competencies and unique differentiation points.

Fifthly, plenty factors, which had an impact on GAMMA´s identity occurred from the data.

First driver was organizational size. Since GAMMA´s acquisition and its belonging to one of the biggest automotive producers in the world, they increased in size, which in turn had an influence on their organizational identity. As consequence, the original vision of GAMMA´s founders to manufacture cars by only a few people died. Moreover, they lost its prior attitudes to be flexible and having a high competence to solve problems quickly. Second, the shift and adoption of organizational structures in some departments led to a decreased independence and made GAMMA “DELTA-like.” The identified change of organizational identity in this regard is close to the findings of Gioia et al. (2000), who stated that organizational identity is dynamic and unstable and therefore, organizational members are able to influence and redefine it. In addition, DELTA influenced organizational procedures of GAMMA in terms of the composition of the management and staffing processes. This brought new personnel with new attitudes and values into the organization and substituted old ones. Moreover, it made GAMMA adapting DELTA attitudes, which in turn influenced GAMMA´s identity. Lastly, due to changes DELTA´s centralization approach of organizational processes GAMMA´s self- decision independence declined and new “DELTA-procedures” were implemented. However, the influential extent and the influence on organizational identity varied between the involved departments depending on the level of integration.

Sixthly, this thesis demonstrated that the communication made by GAMMA´s management regarding the acquisition was restricted and played a limited role. However Birkinshaw et al.

(2000) stressed that communication is an important tool to reduce the risk of employees’

resistance against the acquisition by managing expectations and uncertainties of individuals. In the case of GAMMA employees perceived the internal communication made by the managements as insufficient, which strengthened the negative influence of the acquisition on GAMMA´s identity. The importance of communication is further underlined by Albert et al (2000) who mentioned that communication is rather important to support organizational members understanding of what the company stands for and where it stands for in the future.

Lastly, this thesis also depicted success factors for the preservation of organizational identity in the context of acquisition with a low degree integration. In other words, these factors allow

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the acquiring organization to follow its economic and strategic targets, while reducing the risk that the organizational identity of the acquired organization gets diluted. The findings highlight that successful identity preservation can be reached by applying a certain balance between self- determination of the acquired organization and operational alignment with the acquiring organization. Another contributor for successful identity retention is to provide the acquired company with relevant responsibilities within the group.

5.1 Implications for Science

The first implication for science is the answer to the open literature gap about how an acquisition with a low level integration influences the organizational identity of an acquired organization is given.

Second, this study demonstrates that acquisition do not only come along with discontinuities in organizational identity in regard of identity threat at the acquired organization. For example, through competition within the corporate group the organization highlighted its unique attitudes and characteristics, which strengthened its organizational identity. Thus, enhances the organization to become economically stronger as well as strengthen the identity, while the company remains officially autonomous.

Third, the influence on organizational identity was found to be asymmetrical depending on the influence on departments. This resulted from the departments different degrees of integration.

As a result, it shows that the level of integration needs to be considered when analyzing the influence of acquisitions on organizational identity.

Lastly, the dynamics which surround organizational identity are a very special, political and complex subject that have an impact on organizational members.

5.2 Implications for Practice

This study was not considered to evaluates the efectiveness of the integration within the acquisition process. In contrast, the goal was to analyze the influnece of on the acquired organizations identity by the acquirer. However, the interviewees also highlighted identity-

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realted topics when they described the acquisition. In this respect, some results are applicable to comparable situations and therefore, provide implications for practioners of acquiring as well as acquired organization.

First, organizations involved in an acquisition with a low degree of integration move on a allyway. Especially, the acquirer has to weigh up the benefits through interferences in the acquiree´s organizational structures and procedures and the resulting losses in organizational identity within the acquired organization.

Second, this thesis found evidence for the importance of communication when it comes to organizational changes, such as acquisitions. Through communication between the management and workforce the acquired organization can support the preservation of characteristics and attitudes the company stands for. Moreover, this helps to reduce uncertainty among the workforce and increase their perception of safety.

Third, through the assymetrical integration of departments and connected emerging asymmetrical influence on organizational identity a management is required that understand and is able to handle this effects. Having capable managers enables effective management of the divergent existing perceptions among the workforce.

Fourth, this research highlighted that organizational identity is embedded in various identity roots, which are representors for what the company stands for. Consequently, acquisition with the aim to retain the organizational identity of the acquiree, requires a management that understand the roots that organizational members consider to be central.

In summary, this thesis offers practical insights for the management of acquiring as well as acquired organizations. The managers should acknowledge the challenges and opportunities that arise when they deal with organizational identity in the context of acquisitions. Moreover, this research provides suggestions of how these matter can be handled effectively.

5.3 Limitations and Future Research

As any other study, this research has limitations, too. First, according to Eisenhardt (1989) a case study approach is alwasy connected to the risk of depcific and narrow results. Hence, the

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findings of this research only provide a guidance for testable hypotheses and should not been acknowledged as statistically significant.

Second, the usage of a single case study approach restricted findings on only two organizations of on industry. As consequence, the derivation of the findings should be done carefully.

However, future research on this top could verify the results across other organizations or industries.

Third, conducting interviews is always connected with the risk of biased answers due to influencing factors such as the environment. This limitation can be prevented in furture studies through the execution of interviews in the same interview setting. Moreover, through the translation of the interviews into english information might got lost or led to innacurate reproduction.

Fourth, the data of this research is based on a limited number of conducted interviews.

Therefore, the scope is restricted to a small number of departments and hierarchical levels.

Nevertheless, the findings demonstrate discrepancies among the organizational members depending on their department or job position in the group. For a higher validity it is recommended for future research to analyze this subject based on a larger variety of interviewee across the organizations.

The final limitation is connected to the organizational changes of structures and processes within GAMMA after the acquisition. However, there is no clear evidence of how GAMMA would have developed when it have not been acquired or integrated into DELTA. For instance, GAMMA could have grown even without the acqusition and thus, would lead to adjustments of their internal structures and processes, which in turn could have an influence on GAMMA´s organizational identity.

6. Conclusion

In conclusion, this study dilates research with its findings on the issue of acquisitions with a low degree of integration and the influence on organizational identity. Through the findings it

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is demonstrated that even integrations with a low level have an influence on the identity of the acquired organization. This impact evoke through shifts in the organizational structures and processes and depict both negative and positive effects. Hence, this research recommends to apply an organizational identity lens if it comes to the analysis of organizational change.

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ABSTRACT

Table of Contents

References