All In Favor? Determinants of Nonprofit Professionals’ Support for Post-merger Organizational Change.

• In Event: Organizational change

Abstract

Nonprofit organizations (NPOs) operate in dynamic environments where balancing stakeholder needs and resource dependencies is challenging (Anheier, 2014). Managerial responsiveness is crucial for NPO leaders, with some situations demanding minor adjustments and others necessitating more substantial changes, like organizational restructuring. Regarding the latter, mergers –best understood as the decision “by two or more organizations to combine their operations in a permanent relationship” (Golensky & DeRuiter, 1999, p.138)– serve increasingly as strategic response by NPOs to financial instability and/or environmental pressures (e.g., Cooper & Maktoufi, 2019). Mergers are primarily driven by economic promises, such as enhancing effectiveness, and improving efficiency (Golensky & DeRuiter, 2002). While the notion of 'bigger is better' appears attractive, critics argue that larger organizations do not inherently provide superior services. They exhibit greater distance between executive management and frontline workers, resulting in increased coordination costs and reduced responsiveness to stakeholders' changing needs (Walker et al., 2023). Organizational mergers are a complex change process requiring careful management (Benton & Austin, 2010). Intra-organizational support for the post-merger identity is a critical success factor (Golensky & DeRuiter, 1999), as employees' concerns about the fit with the new organizational identity can lead to adverse outcomes, including lower productivity, and increased turnover intention (Toepler et al., 2004).

However, existing managerial recommendations to mitigate negative consequences from merger implementation are often generic and lack empirical testing (Ricke-Kiely et al., 2013). While nonprofit managers acknowledge the importance of open communication and employee involvement (Campbell, 2008), questions persist regarding how to do this effectively. Therefore, this study addresses the question: how can we stimulate NPO employees to embrace and engage in adopting a new organizational goal framework influencing their NPO's post-merger organizational identity?

To answer this question, we draw on primary survey data collected among 129 nonprofit employees faced with the implementation of a new goal framework following an organizational merger in Flanders (Belgium). We use the self-determination theory (Ryan & Deci, 2000a;b) to hypothesize that the enhancement or undermining of the basic psychological needs through inclusive work environment, interpersonal pressures, and perceived ability to contribute significantly impacts acceptance of a new post-merger goal framework. This, in turn, is expected to serve as a catalyst for fostering engagement in adopting such goal framework.

Results from a PLS-SEM analysis indicate that inclusive work environment, interpersonal pressures, and perceived ability to contribute have a significant positive indirect effect on goal framework engagement through acceptance of change.

The study has three main contributions. First, it highlights the importance of a behavioral lens to study the preferences and behaviors of key nonprofit actors (Qu & Mason, 2023). Adopting such lens allows to adopt an intra-organizational focus, acknowledging that organizations are heterogeneous blocks inhabited by agentic actors (Pache & Santos, 2010). Second, our study theorizes how the interplay between said actors determines organizational support for merger implementation, shedding light on how to secure a critical boundary condition for successful merger processes. Finally, it offers guidance for nonprofit managers in identifying effective strategies for fostering intra-organizational support during organizational restructuring processes.

References

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Authors

• Kenn Meyfroodt, Ghent University, Department Marketing, Innovation and Organization

• Ben Suykens, Ghent University

• Sebastian Desmidt, Ghent University