The Benefits of Adopting Powerful Knowledge or Connecting to Powerful People During a Merger

Tax Administration Research Centre (TARC)

Speaker:Jesse Fagan, UEBS
Website: http://www.jessefagan.com/
Date: Thursday 28 March 2019
Time: 12.00
Location: Laver 825

Further details

The Benefits of Adopting Powerful Knowledge or Connecting to Powerful People During a Merger During a merger the acquiring organization is often a dominant force. It overwhelms the target organization and replaces its norms, routines, and formal structures. In this study I consider the relative benefits of referent power and informational power in terms of getting ahead. Is it best to connect with powerful people, or is it better to learn things powerful people know? Over a fourteen month period immediately following the initial integration, I estimate the influence of powerful ties and powerful knowledge on relative changes to salary. Topics are extracted from the email content and then estimated to belong to either the dominant organization, or to higher ranking members of the organization. I measure how much of this “powerful” knowledge is then integrated into conversations, and how employees change their networks to connect to powerful people. Findings suggest information from the high ranks, and connecting to people in the dominant organization were both beneficial to members of the target organization. Further, adopting the knowledge of powerful people facilitated the creation of new ties to those powerful people. These results suggest formal strategies of information and knowledge exchange could help make merger integrations more successful.