Identity Leadership in Chinese-based M&As: A Case Study of a French Firm

Abstract

M&A literature has pointed to the importance of leaders in creating a shared post-merger organizational identification. Yet we lack knowledge of how leaders foster or hinder organizational identity construction, especially in CBM&As involving high in-group and out-group demarcation and cultural differences, such as in Chinese-based M&As. In this paper, we draw on the social identity approach to study how leadership in executive management teams operates as a collective process of influence of Chinese and European team members. We conducted a longitudinal case study of a French acquisition in China, which involved conflicts and the demarcation of ingroups and outgroups. Our findings reveal how the French CEO and the Chinese Chairman mobilized the senior management. Their identity leadership acts aligned with the “China for the World” strategy at Time 1, with Chinese team members following, while French identity leadership focused on “In China for China+1.” At Time 2, the Chairman and Chinese managers shifted to “In China for China+1,” while the French CEO and French managers supported “China for the world.” We show how the management sub-groups may align on leadership acts but at different points in time. Results shed light on how a foreign CEO can become part of the ingroup for Chinese managers.