Mediating Role of Acculturation on Newcomer Employees Behavior and Performance of Mergers and Acquisitions Process: An Empirical Analysis of Indian Banking Sector

Abstract

Introduction: New ways of structuring, adopting new technology, and reshaping the role and responsibility in the banking operation have impacted the working conditions as well as the daily lives of bank employees. Acculturation is an emerging concept that may influence the short and long-term success or failure of any organization. Acculturation is firmly connected to Mergers & Acquisitions (M&A) performance because it affects the banking sector’s business value and should be addressed after the merger. Methods: The current study is an attempt to examine the association between newcomer employee behavior and the performance of the M&A process, as well as the mediating effect of acculturation in this relationship. The sample size constitutes 303 newcomers banking employees who have joined the four acquired public sector banks after the mega-merger of six public sector undertaking banks on 1st April 2020. The research paper used CFA to examine the constructs' reliability and validity and used PLS-SEM to test the research hypotheses. Results: According to the statistical findings, new employee behavior and mergers and acquisitions performance were found to be significantly related at p-value < 0.001. Subsequently, acculturation mediates the relationship between newly joined employee conduct and large M&A performance. Conclusion: When a firm goes through the mergers and acquisitions process, they learn that cultural indigestion is a critical issue that influences employee behavior during the M&A process, which is often overlooked by senior management. The study finds out the post-merger problems and failures in the banking industry as a result of organizational culture differences.