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.

Using a social identity approach, this research program focuses on how Eastern and Western managers make sense of mergers and acquisitions (M&As). Study 1 used online experiments to examine how people perceive intergroup criticism. We found that employees responded to criticism more negatively when it was made by an outgroup rather than by ingroup members. Building on the study 1 results, we further explored social identity processes and intergroup dynamics. We conducted interviews with European (Study 2) and Chinese managers (Study 3) involved in an acquisition of a European company by a Chinese holding. Study 2 shows that European managers’ organizational identity change is facilitated by alignment of a post-merger identity with their pre-merger historical identity, and over time, they engaged in collaboration and knowledge sharing with their Chinese counterparts. In Study 3, we found that Chinese managers leveraged an agile organizational identity to deal with status inferiority and rapid organizational changes. In summary, this research program addresses the need for a deeper understanding of social identity processes and change beyond M&A context, but also in other cross-cultural collaboration processes which involve employees who initially have various identities, practices, and cultural backgrounds.