Identification Change in Chinese Acquisitions in Europe

Organizational identification might become weaker when confronted with organizational changes, such as mergers and acquisitions (M&As). Identification change in M&As has received significant attention from scholars, but the extant theoretical evidence might not apply to employees involved in Chinese M&As. Indeed, cultural characteristics (e.g., dialectical thinking, collectivism, power distance) might make Chinese employees more tolerant of contradictions and ambivalence than employees in the Western hemisphere. To address this gap, we will refer to the social identity theory and the extant knowledge on identification change in cross-border M&As. We will present a framework of organizational identification change for Chinese employees after acquisition together with factors that contribute to the success of M&As. We illustrate it with the case of a Chinese acquisition in Europe: ChinaCorp and EuroMall. We theorize on the role of identity leadership wherein a leader’s behavior has a particularly strong impact on identification processes in high power distance and collectivist cultures. We will show how acts of identity leadership matter for the transfer from pre-merger to post-merger identification in the case of Chinese acquirers.