He is (not) one of us: The effect of leaders' national background on leader prototypicality, sense of continuity of identity and post-merger identification

Abstract

Despite the rise of internationalization of M&A’s, little research regarding the effects of leader's nationality on employee reactions to M&A announcements has been done. Utilizing concepts from Social Identity Approach (SIA), two experimental studies examined whether a leader’s national background affected employee's ratings of the leader's group prototypicality and whether leader group prototypicality and perceived sense of continuity sequentially mediated leader national backgrounds influence on Post-Merger Identification (PMI). Furthermore, the perceived stereotypical attributions of the leader were assessed. In the first study, a German (N= 104) sample, was exposed to an M&A announcement describing the arrival of a new leader of either the same nationality (German) as the participants or of a different nationality (Portuguese). The second study used a Portuguese sample (N=154) to assess the possible influence of the power status of nation of origin. The participants were either exposed to a leader of the same national background (Portuguese) or a leader with a different national background from a country of origin with higher status (Germany). The results did not support the hypotheses, and no significant influences of leader national background on measures of leader group prototypicality, PMI or stereotype dimensions were found. Still, the results replicate previous findings when not considering leader background. The studies indicate that the leader's nationality does not affect employee reactions to the M&A announcement, practical implications regarding the hiring of foreign leaders and measures to increase perceived leader prototypicality will be discussed.