Asia Pacific Journal of Management

, Volume 36, Issue 4, pp 1023–1051 | Cite as

Should I stay or should I go? understanding employees’ decisions to leave after mergers in Hong Kong’s banking industry

  • Victor Ming Tak NgEmail author
  • Emily Guohua Huang
  • Michael N. Young


Recently, Chinese firms are increasingly acquiring firms overseas. This is often followed by high levels of employee exit from the acquired firm, which can be problematic. To better understand this phenomenon, we use the unfolding model of voluntary turnover to examine why and how individual employees of Hong Kong-based banks make the decision to either stay or go after their bank is taken over by a Chinese bank. We obtain data from three major acquisitions of banks in Hong Kong by Chinese state-owned banks from 2004 to 2008. Our sample consists of 406 employees from the acquired banks as well as non-acquired banks. We find that employees that have left after being acquired are more likely to report experiencing a “shock” than are employees of non-merged banks and that this influences their decision to leave. We also find that in the merger context, male employees, front-line employees and officer-level employees have different leaving decision paths from their female, back-office, and non-officer-level counterparts respectively. No such differences are found in the non-merger context. In addition, we find that a retention bonus delays departure after the merger. These findings contribute to research and practice of managing employee turnover after cross-border acquisitions by Chinese firms.


Chinese cross-border merger and acquisition Employee voluntary turnover Merger and acquisition Unfolding model of employee turnover 



  1. Ahlstrom, D. 2010. Innovation and growth: How business contributes to society. Academy of Management Perspectives, 24(3): 11–24.Google Scholar
  2. Ahlstrom, D., Levitas, E., Hitt, M. A., Dacin, M. T., & Zhu, H. 2014. The three faces of China: Strategic alliance partner selection in three ethnic Chinese economies. Journal of World Business, 49(4): 572–585.Google Scholar
  3. Allen, D. G., & Griffeth, R. W. 2001. Test of a mediated performance-turnover relationship highlighting the moderating roles of visibility and reward contingency. Journal of Applied Psychology, 865: 1014–1021.Google Scholar
  4. Bartels, J., Pruyn, A., & Jong, M. 2009. Employee identification before and after an internal merger: A longitudinal analysis. Journal of Occupational and Organizational Psychology, 821: 113–128.Google Scholar
  5. Beach, L. R. 1990. Image theory: Decision-making in personal and organizational contexts. Chichester:Wiley.Google Scholar
  6. Beach, L. R. 1997. The psychology of decision-making: People in organizations. Beverly Hills, CA:Sage Publications.Google Scholar
  7. Beach, L. R., & Mitchell, T. R. 1998. The basics of image theory. In L. Beach (Ed.). Image theory: Theoretical and empirical foundations: 1–30. Chichester: Wiley.Google Scholar
  8. Bhal, K., Bhaskar, A., & Ratnam, C. 2009. Employee reactions to MandA: Role of LMX and leader communication. Leadership and Organization Development Journal, 307: 604–624.Google Scholar
  9. Blau, G., & Boal, K. 1989. Using job involvement and organizational commitment interactively to predict turnover. Journal of Management, 151: 115–127.Google Scholar
  10. Bruton, G. D., Ahlstrom, D., & Chan, E. S. 2000. Foreign firms in China: Facing human resources challenges in a transitional economy. SAM Advanced Management Journal, 65(4): 4–11.Google Scholar
  11. Bruton, G. D., Peng, M. W., Ahlstrom, D., Stan, C., & Xu, K. 2015. State-owned enterprises around the world as hybrid organizations. Academy of Management Perspectives, 29(1): 92–114.Google Scholar
  12. Boudreau, J. W., & Berger, C. J. 1985. Decision-theoretic utility analysis applied to employee separations and acquisitions. Journal of Applied Psychology, 703: 581–612.Google Scholar
  13. Bowman, J. 2000. Workers unhappy, disloyal. South China Morning Post, 25 May.Google Scholar
  14. Buckley, P. J., Elia, S., & Kafouros, M. 2014. Journal of World Business, 494: 611–632.Google Scholar
  15. Burke, W. W. 2008. Organization change: Theory and practice, 2nd ed. LA:Sage Publications.Google Scholar
  16. Cannella, A. A., and Hambrick, D. C. 1993. Effects of executive departures on the performance of acquired firms. Strategic Management Journal, 14S1,137–152.Google Scholar
  17. Chen, Y. Y., Wang, X., & Young, M. N. 2015. Geely Automotive’s acquisition of Volvo. Asian Case Research Journal, 19: 153–172.Google Scholar
  18. Chen, Y. Y., & Young, M. N. 2010. Cross-border mergers and acquisitions by Chinese listed companies: A principal–principal perspective. Asia Pacific Journal of Management, 273: 523–539.Google Scholar
  19. Chen, S. Y., Chuang, C. H., & Chen, S. J. 2018. A conceptual review of human resource management research and practice in Taiwan with comparison to select economies in East Asia. Asia Pacific Journal of Management, 35(1): 213–239.Google Scholar
  20. Chiu, R., & Kosinski, F. 1995. Chinese cultural collectivism and work related stress: Implications for employment counsellors. Journal of Employment Counselling, 323: 98–110.Google Scholar
  21. Christensen, C. M. 2006. The ongoing process of building a theory of disruption. Journal of Product Innovation Management, 23(1): 39–55.Google Scholar
  22. Christensen, C. M., & Raynor, M. E. 2013. The innovator's solution: Creating and sustaining successful growth. Boston:Harvard Business Review Press.Google Scholar
  23. Chung, G. H., Du, J., & Choi, J. N. 2014. How do employees adapt to organizational change driven by cross-border M&as? A case in China. Journal of World Business, 49: 78–86.Google Scholar
  24. Cialdini, R. B. 2006. Influence: The psychology of persuasion. New York:Harper Business.Google Scholar
  25. Cialdini, R. B. 2016. Pre-suasion: A revolutionary way to influence and persuade. New York:Simon & Schuster.Google Scholar
  26. Corley, K. G., & Gioia, D. A. 2004. Identity ambiguity and change in the wake of a corporate spin-off. Administration Science Quarterly, 492: 173–208.Google Scholar
  27. Donnelly, D. P., & Quirin, J. J. 2006. An extension of lee and Mitchell's unfolding model of voluntary turnover. Journal of Organizational Behavior, 271: 59–77.Google Scholar
  28. Elstak, M. N., Bhatt, M., Riel, C. B. M., Pratt, M. G., & Berens, G. A. J. M. 2015. Organizational identification during a merger: The role of self-enhancement and uncertainty reduction motives during a major organizational merger. Journal of Management Studies, 52(1): 32–62.Google Scholar
  29. Garud, R., & Ahlstrom, D. 1997. Technology assessment: A socio-cognitive perspective. Journal of Engineering and Technology Management, 14(1): 25–48.Google Scholar
  30. Griffeth, R. W., Hom, P. W., and Gartner 2000. A meta-analysis of antecedents and correlates of employee turnover: Update, moderator tests, and research implications for the next millennium. Journal of Management, 263, 463–488.Google Scholar
  31. Guerrero, S. 2008. Changes in employees' attitudes at work following an acquisition: A comparative study by acquisition type. Human Resource Management Journal, 183: 216–236.Google Scholar
  32. Haleblian, J., & Finkelstein, S. 1999. The influence of organizational acquisition experience on acquisition performance: A behavioral learning perspective. Administrative Science Quarterly, 441: 29–56.Google Scholar
  33. Haleblian, J., Kim, Y. J., & Rajagopalan, N. 2006. The influence of acquisition experience and performance on acquisition behavior: Evidence from the US commercial banking industry. Academy of Management Journal, 492: 357–370.Google Scholar
  34. Harrison, D. A., Virick, M., & William, S. 1996. Working without a net: Time, performance, and turnover under maximally contingent rewards. Journal of Applied Psychology, 814: 331–345.Google Scholar
  35. Herold, D. M., Fedor, D. B., & Caldwell, S. D. 2007. Beyond change management: A multilevel investigation of contextual and personal influences on employees commitment to change. Journal of Applied Psychology, 924: 942–951.Google Scholar
  36. Hofstede, G. 1993. Cultural constraints in management theories. Academy of Management Executive, 71: 81–94.Google Scholar
  37. Holt, D., Armenakis, A., Feild, H., & Harris, S. 2007. Readiness for organizational change - the systematic development of a scale. Journal of Applied Behavioral Science: 232–255.Google Scholar
  38. Holtom, B. C., Mitchell, T. R., Lee, T. W., & Eberly, M. B. 2008. 5 turnover and retention research: A glance at the past, a closer review of the present, and a venture into the future. The Academy of Management Annals, 21: 231–274.Google Scholar
  39. Holtom, B. C., Mitchell, T. R., Lee, T. W., & Inderrieden, E. J. 2005. Shocks as causes of turnover: What they are and how organizations can manage them. Human Resource Management, 443: 337–352.Google Scholar
  40. Hom, P. W., & Griffeth, R. W. 1995. Employee turnover. Ohio:South-Western College Publishing.Google Scholar
  41. Huang, L. C., Ahlstrom, D., Lee, A. V. P., Chen, S. Y., & Hsieh, M. J. 2016. High performance work systems, employee well-being, and job involvement: an empirical study. Personnel Review, 45(2): 296–314.Google Scholar
  42. Jackofsky, E. F., Ferris, K. R., & Breckenridge, B. G. 1986. Evidence for a curvilinear relationship between job performance and turnover. Journal of Management, 121: 105–111.Google Scholar
  43. Khatri, N., Fern, C., & Budhwar, P. 2001. Explaining employee turnover in an Asian context. Human Resource Management Journal, 111: 54–74.Google Scholar
  44. Kim, T.-Y., & Leung, K. 2007. Forming and reacting to overall fairness: A cross-cultural comparison. Organizational Behavior and Human Decision Processes, 1041: 83–95.Google Scholar
  45. Kirkman, B., Chen, G., Farh, J. L., Chen, Z., & Lowe, K. 2009. Individual power distance orientation and follower reactions to transformational leaders: A cross-level, cross-cultural examination. Academy of Management Journal, 524: 744–764.Google Scholar
  46. Krug, J. A., & Hegarty, W. H. 1997. Postacquisition turnover among U.S. top management teams: An analysis of the effects of foreign vs. domestic acquisitions of U.S. targets. Strategic Management Journal, 188: 667–675.Google Scholar
  47. Krug, J. A., & Nigh, D. 2001. Executive perceptions in foreign and domestic acquisitions: An analysis of foreign ownership and its effect on executive fate. Journal of World Business, 36(1): 85–105.Google Scholar
  48. Kulik, C. T., Treuren, G., & Bordia, P. 2012. Shocks and final straws: Using exit-interview data to examine the unfolding models decision paths. Human Resource Management, 511: 25–46.Google Scholar
  49. Lee, T. W., & Mitchell, T. R. 1991. The unfolding effects of organizational commitment and anticipated job satisfaction on voluntary employee turnover. Motivation and Emotion, 151: 99–121.Google Scholar
  50. Lee, T. W., & Mitchell, T. R. 1994. An alternative approach: The unfolding model of voluntary employee turnover. Academy of Management Review, 191: 51–89.Google Scholar
  51. Lee, T. W., Holtom, B. C., McDaniel, L. S., & Hill, J. W. 1999. The unfolding model of voluntary turnover: A replication and extension. Academy of Management Journal, 424: 450–462.Google Scholar
  52. Lee, T. W., Mitchell, T. R., Wise, L., & Fireman, S. 1996. An unfolding model of voluntary employee turnover. Academy of Management Journal, 391: 5–36.Google Scholar
  53. Liu, Y., Chen, Y. J., & Wang, L. C. 2017. Family business, innovation and organizational slack in Taiwan. Asia Pacific Journal of Management, 34(1): 193–213.Google Scholar
  54. Lubatkin, M., Schweiger, D., & Weber, Y. 1999. Top management turnover M Related M&As: An additional test of the theory of relative standing. Journal of Management, 251: 55–73.Google Scholar
  55. Maertz, C. P., & Campion, M. A. 2004. Profiles in quitting: Integrating process and content turnover theory. Academy of Management Journal, 47: 566–582.Google Scholar
  56. Maguire, S., & Phillips, N. 2008. Citibankers at Citigroup: A study of the loss on institutional trust after a merger. Journal of Management Studies, 452: 372–401.Google Scholar
  57. Maurer, R. 1997. Transforming resistance. HR Focus, 7410: 9–10.Google Scholar
  58. McCarthy, K., Dolfsma, W., & Weitzel, U. 2016. The first global merger wave and the enigma of Chinese performance. Management and Organization Review, 12(2): 221–248.Google Scholar
  59. McCloskey, D. N. 2013. Tunzelmann, Schumpeter, and the hockey stick. Research Policy, 42(10): 1706–1715.Google Scholar
  60. Miller, C. C., Cardinal, L. B., & Glick, W. H. 1997. Retrospective reports in organizational research: A reexamination of recent evidence. Academy of Management Journal, 401: 189–204.Google Scholar
  61. Mirvis, P. H., & Marks, M. L. 1992. Rebuilding after the merger: Dealing with ‘survivor sickness. Organizational Dynamics, 212: 18–23.Google Scholar
  62. Mitchell, T. R., & Beach, L. R. 1990. … do i love thee? Let me count… toward an understanding of intuitive and automatic decision making. Organizational Behavior and Human Decision Processes, 471: 1–20.Google Scholar
  63. Mitchell, T. R., Holtom, B. C., & Lee, T. W. 2001. How to keep your best employees : Developing an effective retention policy. Academy of Management Executive, 154: 96–109.Google Scholar
  64. Mitchell, T. R., & Lee, T. W. 2001. The unfolding model of voluntary turnover and job embeddedness: Foundations for a comprehensive theory of attachment. Research in Organizational Behavior, 23: 189–246.Google Scholar
  65. Morrell, K., Loan-Clarke, J., & Wilkinson, A. 2001. Unweaving leaving: The use of models in the management of employee turnover. International Journal of Management Reviews, 33: 219–244.Google Scholar
  66. Morrell, K., Loan-Clarke, J., & Wilkinson, A. 2004a. The role of shocks in employee turnover. British Journal of Management, 154: 335–349.Google Scholar
  67. Morrell, K., Loan-Clarke, J., & Wilkinson, A. 2004b. Organisational change and employee turnover. Personnel Review, 332: 161–173.Google Scholar
  68. Morrell, K., Loan-Clarke, J., Arnold, J., & Wilkinson, A. 2008. Mapping the decision to quit: A refinement and test of the unfolding model of voluntary turnover. Applied Psychology: An International Review, 571: 128–150.Google Scholar
  69. Mourmant, G. 2009. A necessary clarification of the unfolding model of voluntary turnover. In Proceedings of the special interest group on management information system's 47th annual conference on Computer personnel research, 143–152. ACM.Google Scholar
  70. Niederman, F., Sumner, M., Maertz, J. R., & Carl, P. 2007. Testing and extending the unfolding model of voluntary turnover to IT professionals. Human Resource Management, 463: 331–347.Google Scholar
  71. Owen, F., & Jones, R. 1994. Statistics, 4th ed. London:Pitman.Google Scholar
  72. Rafferty, A. E., & Restubog, S. D. 2010. The impact of change process and context on change reactions and turnover during a merger. Journal of Management., 365: 1309–1338.Google Scholar
  73. Ramesh, A., & Gelfand, M. J. 2010. Will they stay or will they go? The role of job embeddedness in predicting turnover in individualistic and collectivistic cultures. Journal of Applied Psychology, 955: 807–823.Google Scholar
  74. Russ, F. A., & McNeilly, K. M. 1995. Links among satisfaction, commitment, and turnover intentions: The moderating effect of experience, gender, and performance. Journal of Business Research, 34: 57–65.Google Scholar
  75. Rusu, M., Miettinen, A., & Varjonen V. 2006. Has cross-border merger affected well-being at work? A follow-up case from banking industry. In proceedings of the European Productivity Conference, EPC.Google Scholar
  76. Schuler, R., & Jackson, S. 2001. HR issues and activities in mergers and acquisitions. European Management Journal, 193: 239–253.Google Scholar
  77. Schweiger, D. M., & DeNisi, A. S. 1991. Communication with employees following a merger: A longitudinal field experiment. Academy of Management Journal, 341: 110–135.Google Scholar
  78. Seo, M. G., & Hill, S. N. 2005. Understanding the human side of merger and acquisition: An integrative framework. Journal of Applied Behavioral Science, 414: 422–443.Google Scholar
  79. Shaffer, M. A., Joplin, J. R. W., Bell, M. P., Lau, T., & Oguz, C. 2000. Gender discrimination and job-related outcomes: A cross-cultural comparison of working women in the United States and China. Journal of Vocational Behavior, 573: 395–427.Google Scholar
  80. Shipp, A. J., Furst-Holloway, S., Harris, T. B., & Rosen, B. 2014. Gone today but here tomorrow: Extending the unfolding model of turnover to consider boomerang employees. Personnel Psychology, 672: 421–462.Google Scholar
  81. Spector, P. E., Allen, T. D., Poelmans, S. A. Y., Lapierre, L. M., Cooper, C. L., ODriscoll, M., et al. 2007. Cross-national differences in relationships of work demands, job satisfaction, and turnover intentions with work-family conflict. Personnel Psychology, 604: 805–835.Google Scholar
  82. Sturman, M. C., Shao, L., & Katz, J. H. 2012. The effect of culture on the curvilinear relationship between performance and turnover. Journal of Applied Psychology, 971: 46–62.Google Scholar
  83. Symons, C. S., & Johnson, B. T. 1997. The self-reference effect in memory: A meta-analysis. Psychological Bulletin, 1213: 371–394.Google Scholar
  84. Teerikangas, S. 2012. Dynamics of acquired firm pre-acquisition employee reactions. Journal of Management, 38(2): 559–639.Google Scholar
  85. Tsui, A. S., Wang, D., & Zhang, Y. 2002. Employment relationship with Chinese middle managers: Exploring differences between state-owned and non-state-owned firms. In A. S. Tsui, & C. M. Lau (Eds.). The management of enterprise in the Peoples Republic of China: 347–374. Boston, MA: Kluwer Academic.Google Scholar
  86. Ullrich, J., Wieseke, J., & Van Dick, R. 2005. Continuity and change in mergers and acquisitions: A social identity case study of a German industrial merger. Journal of Management Studies, 428: 1549–1569.Google Scholar
  87. Vaara, E., Sarala, R., Stahl, G. K., & Björkman, I. 2012. The impact of organizational and national cultural differences on social conflict and knowledge transfer in international acquisitions. Journal of Management Studies, 491: 1–27.Google Scholar
  88. Van Dick, R., Christ, O., Stellmacher, J., Wagner, U., Ahlswede, O., Grubba, C., et al. 2004. Should i stay or should i go? Explaining turnover intentions with organizational identification and job satisfaction. British Journal of Management, 154: 351–360.Google Scholar
  89. Walumbwa, F. O., Wang, P., Lawler, J. J., & Shi, K. 2004. The role of collective ef cacy in the relations between transformational leadership and work outcomes. Journal of Occupational and Organizational Psychology, 774: 515–530.Google Scholar
  90. Wang, L. C., Ahlstrom, D., Nair, A., & Hang, R. Z. 2008. Creating globally competitive and innovative products: China's next Olympic challenge. SAM Advanced Management Journal, 73(3): 4–15.Google Scholar
  91. Wash, J. P. 1988. Top management turnover following mergers and acquisitions. Strategic Management Journal, 9: 173–183.Google Scholar
  92. Weber, Y., & Schweiger, D. 1992. Top managers conflict in mergers and acquisitions: A lesson from anthropology. The International Journal of Conflict Management, 3(4): 285–302.Google Scholar
  93. Wheeler, M. A., Stuss, D. T., & Tulving, E. 1997. Toward a theory of episodic memory: The frontal lobes and autonoetic consciousness. Psychological Bulletin, 1213: 331–354.Google Scholar
  94. Wu, J., & Zang, A. 2009. What determines financial analysts’ career outcomes during mergers? Journal of Accounting & Economics, 47: 59–86.Google Scholar
  95. Yam, J. 2009. Hong Kong monetary authority - Joseph yam on monetary and financial co-operation between the mainland and Hong Kong. Retrieved from
  96. Young, M. N. 2016. Commentary on the enigma of Chinese performance: Do Chinese investors’ reactions to merger announcements accurately measure prospects for success? Management and Organization Review., 12(2): 249–257.Google Scholar
  97. Young, M. N., Ahlstrom, D., Bruton, G. D., & Rubanik, Y. 2011. What do firms from transition economies want from their strategic alliance partners? Business Horizons, 54(2): 163–174.Google Scholar
  98. Zhang, H. J., Young, M. N., Sun, W. Z., & Tan, J. 2018. How Chinese companies deal with a legitimacy imbalance when acquiring firms from developed economies. Journal of World Business, (forthcoming).Google Scholar
  99. Zhen, X. C., & Francesco, A. M. 2000. Employee demography, organizational commitment, and turnover intentions in China: Do cultural differences matter? Human Relations, 536: 869–887.Google Scholar
  100. Zhu, H., & Zhu, Q. 2016. Merger and acquisition by Chinese firms: A review and comparison with other merger and acquisition research in the leading journals. Asia Pacific Journal of Management, 33(4): 1107–1149.Google Scholar
  101. Zhu, H., Xia, J., & Makino, S. 2015. How do high-technology firms create value in international M&a? Integration, autonomy and cross-border contingencies. Journal of World Business, 50(4): 718–728.Google Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  • Victor Ming Tak Ng
    • 1
    Email author
  • Emily Guohua Huang
    • 2
  • Michael N. Young
    • 3
  1. 1.School of BusinessHong Kong Baptist UniversityKowloonHong Kong
  2. 2.Department of ManagementHong Kong Baptist UniversityKowloonHong Kong
  3. 3.Department of Management, Walker College of BusinessAppalachian State UniversityBooneUSA

Personalised recommendations