Abstract for:The Dynamics of Related Acquisitions; Downsizing Magnitude, Timing, and Employee Engagement
This study extends current understanding of the downsizing-employee engagement relationship in the dynamics of an M&A trajectory. We argue that the effectiveness of related acquisitions -- in terms of post-deal productivity benefits to be reaped -- is contingent on two major preparatory actions: the timing of downsizing in relation to the moment of acquisitions and the magnitude of such downsizing. We model the acquisition and downsizing event based on system dynamics with a non-linear effect of both acquisition and downsizing on employee engagement. Our findings also indicate that while every organization has some resilience in dealing with exogenous shock, the double blow of both acquisition and downsizing can be too much to take when it comes to safeguarding instant post-deal productivity. Additionally, and in advancement of further modeling on this matter, we theorize on the timing of downsizing in relation to acquiring. We suggest that acquiring firms that choose to implement downsizing actions prior to the deal have a higher likelihood of reaping efficiency benefits than firms that choose to time downsizing as part of the post deal trajectory.