Perceived Effectiveness Of Cross-border Brand M&A On Employee-based Brand Equity

With the rapid development of China's economy,more and more Chinese firms"going out" acquire of Western strong brands or acquire the company with a strong brand.As special enterprise stakeholders,employees are those who earliest know the cross-border brand M&A launched by their firms,their attitude and behavior is not only closely related to the success of mergers and acquisitions,but also affects the external customer's attitude and behavior.With the wide application of the Internet and the rapid development of the share economy,their influence on the customer will be more convenient and more direct.Cross-border brand M&A can be used to create value for the company by influencing the customer's thinking and doing,so as do for the employees.Employees who are in the acquirer are less likely to be concerned about the uncertainty and anxiety,and are more likely to have positive emotions such as pride and organization identification.Following studies about brand mergers and acquisitions,organization identification and employee-based brand equity,this paper studies the impact of perceived effectiveness of cross-border brand M&A on employee-based brand equity from the acquiring employees perspective,exploring the effect of the Chinese enterprise "Inferior-to-Superior" cross-border brand M&A on employees' brand equity.Choosing three Chinese brand firms who launching "Inferior-to-Superior"cross-border brand mergers and acquisitions within two years,we delivered a questionnaire survey to employees who know the M&A and collected the relevant data about employee attitude to cross-border brand M&A.On the basis of testing the suitability,the reliability and the validity of the measurement model,the structural equation model was used to test and analyze the conceptual model and research hypothesis.The results showed that:(1)Three dimensions of perceived effectiveness of cross-border brand M&A such as perceived complementarity between the two sides before M&A,expected transfer of knowledge after M&A and expected performance improvement of the acquirer after M&A have significant positive effects on employee pride and employee trust,and the other dimensions of perceived more strengthen of acquired brand before M&A has a strong negative effect on them.(2)Employee pride and employee trust have significant positive effects on organization identification and change identification.And effects of employee trust on organization identification and change identification are stronger than pride.(3)Organization identification and change identification significant positive effects on employee-based brand equity from the whole,and the impact of the organization identification on brand loyalty is stronger,and the effect of change identification on brand loyalty is not significant.(4)Employees pride and trust fully mediate the relations between perceived effectiveness of cross-border brand M&A and organization identification and change identification.The relations of employees pride and trust and employee-based brand equity are only partly mediated by organization identification and change identification.The innovations of this paper:(1)Different from the majority of cross-border M&A study which focused on how to deal with the negative emotions of employees,this paper focuses on how to manage the employee's positive emotion,and the impact of such emotion on employee's attitude and behavior.(2)Researches of brand acquisitions mostly focus on the perspectives of customer-based brand equity and financial-based brand equity,while the empirical studies about the influence of cross-border brand M&A on employee-based brand equity are less in the domestic and foreign research.(3)Different from the developed countries"Superior-to-Inferior" and "Superior-to-Superior" brand transnational mergers and acquisitions,this paper mainly studies that the China enterprise acquire western strong brand in "Inferior-to-Superior" brand transnational mergers and acquisitions,and focuses mainly on its impact on staff.(4)The research about perceived effectiveness of cross-border brand M&A is less in home and abroad.This paper creates the new construct and analyses the comparative impact on employees' emotion and attitude aspects from four dimensions.(5)There are many researches on employee organizational identification involving in the M&A,this paper introduces a smaller range of variables namely change identification and compares the different influence of two kinds identification on employee brand equity.In this paper,we study the impact mechanism of perceived effectiveness on employee based brand equity from the acquirer perspective.The main theoretical contributions are:(1)Through the path analysis of "cognition,emotion,attitude,behavior,we track the formation and promotion process employee-base brand equity during cross-border brand M&A,extending the value chain model of brand equity from employee perspective.(2)Through the analysis of the influence of different dimensions of employee-based brand equity,this paper not only has confirmed the difference of organization identification and change identification,also confirmed the differences of influence factors of the three dimensions of employee-based brand equity,namely brand endorsement,brand consistency behavior and brand loyalty.(3)Through the analysis of the the impact of perceived effectiveness of cross-border brand M&A on employee pride and employee trust,this paper has confirmed when Chinese enterprises launch "Inferior-to-Superior" brand transnational mergers and acquisitions,perception of target selection strategy and expectations of synergy and performance improvement has important influence on employees' positive emotion and attitude.The main management implications are:Let employees know the value of such specific change events as cross-border brand M&A to enhance employee brand equity.Choose complementary target brand to effectively realize synergy of transnational brand acquisitions.Improve the management of transnational brand acquisition skills to enhance employees' confidence in the success of the organization change.Create a good atmosphere to win the employees' organization identification and attract and retain competent employees.Further research in the future can be focused on several aspects in order to overcome the limitations of this study.For example,the expansion of the sample size,especially for the service brand which carry out cross-border brand mergers and acquisitions,the development of the construction and variables based on China context,the changes in the timing of the employee response,and so on.