Leadership and Employee Satisfaction in Cross-Border Mergers: A Comparison of Transformational and Transactional Styles

Abstract: Mergers and acquisitions bring convenient solutions for organizations who are looking to broaden their scales. These activities are being pushed towards cross- border activities due to increased globalization. While strategic and financial perspectives are carefully evaluated before an M&A, the human factor is oftentimes neglected. This results in a high rate of failure and dissatisfaction. Managing a cross-border M&A comes with the responsibility of achieving employee satisfaction. While prior research has noted the importance of managerial approaches in post-merger states it failed to compare transformational and transactional leadership styles.  This paper examines the achieved employee satisfaction under transformational/transactional leaders in post-merger environments. The purpose is to compare these two managerial styles to denote how they achieve said satisfaction.  A qualitative approach with exploratory purpose and a grounded theory methodology was followed in our study. We build upon a relativist ontology paired with a social constructivist epistemology. Nine open-ended interviews were conducted with employees from three different merged organizations.  The results show that transformational and transactional leaders both carry essential virtues when it comes to achieving employee satisfaction in a cross-border, post- merger environment. Our research indicates this state is achieved when the leaders use the two approaches complementary and frequently adjusted to the situation, thus are ambidextrous.