Telecommunications Mega-Mergers: Impact On Employee Morale And Turnover Intention

Abstract

The number of mergers and acquisitions grew at record rates in the United States over the past 10 years, and mega telecommunications mergers have been no exception. Three very high-profile telecommunications mergers included MCI and Verizon, Sprint and Nextel, and BellSouth and AT&T. These megamergers have changed the competitive landscape dramatically in the telecom arena. Despite the popularity of mergers and acquisitions (M&As), evidence has shown that the majority have failed to improve performance and failed to achieve anticipated strategic and financial objectives set forth in the premerger planning phase, according to J. Krug and R. Aguilera’s 2004 article “Top Management Team Turnover in Mergers and Acquisitions” in Advances in Mergers and Acquisitions. The primary reason behind such common performance failures according to S. Cartwright and C. L. Cooper’s 2000 HR Know-How in Mergers and Acquisitions was based on various human resources factors such as culture, management, poor motivation, and loss of talent. Based on the aforementioned post corporate merger performance failure considerations, this research study examined the impact on employee morale and turnover intention related to a recent megamerger between two telecommunications conglomerates.