Retaining innovative capacities: the impact of job satisfaction on employee turnover during postmerger integration Online publication date: Tue, 06-Nov-2007
by Christoph Grimpe
International Journal of Technology Intelligence and Planning (IJTIP), Vol. 3, No. 2, 2007
Abstract: Empirical evidence shows that firm Mergers and Acquisitions (M&A) have a high failure rate. However, most studies use financial or strategic indicators to measure this rate, largely leaving employees out of their considerations. The situation in a firm can become critical when highly qualified yet dissatisfied specialists in Research and Development (R&D) units depart following such transactions, because the firm ultimately loses innovative capacities. This article contributes to the debate by investigating the determinants of job satisfaction of R&D employees and their effects on employee turnover during the postmerger integration process. Based on a partial least squares structural equation model, it emerges that high job satisfaction serves to prevent employee turnover and thus the loss of innovative capacities. Determinants for high job satisfaction are income security, the quality of integration achieved and the handling of the integration process in such a way as to avoid feelings of insecurity among employees.
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