Exploring the influences on employee commitment during the acquisition of a South African FMCG company

Abstract

Mergers and acquisitions (M&As) are potentially life-changing events impacting many employees' lives, especially their commitment to an organisation. This mini-dissertation explores the factors influencing employee commitment (EC) during the acquisition of a South African fast-moving consumer goods (FMCG) business. Using a qualitative case study approach, this work investigates the impact of factors like leadership, communication, job security, organisational culture and change management on EC. The study further contributes to the theoretical understanding of EC during M&As by integrating frameworks such as Lewin's Change model and Kotter's eight-step model into a South African FMCG context. The practical recommendations for leaders and noteworthy stakeholders emphasise the need for transparent communication by combining these tried and tested change management models throughout the M&A process. The research adopted an interpretive paradigm with a mono-method qualitative strategy, collecting data through semi-structured interviews from relevant employees in both the legacy and target companies of the acquisition. The findings revealed leadership as a central factor to M&A success, with constructive leadership styles essential in building trust and positive business culture, with the contrary indicating an increase in employee turnover where these factors were ignored or dealt with poorly. The importance of a holistic, employee-centred approach to M&As is currently contrary to the norm, where 'business objectives' outweigh 'people objectives', but it has proved essential in the fast and dynamic South African FMCG industry. By considering people as a vital asset to a company, leaders almost unknowingly cultivate and foster EC, which makes navigating the already challenging transition that M&As bring with increased ease and confidence - naturally lifting the chances of a successful transaction and better business performance.