Journal of Applied Psychology

Dynamic Interplay Between Merger Process Justice &

Cognitive Trust in Top Management: A Longitudinal
Study
By : Janne Kaltiainen, Jukka Lipponen, and Brian C. Holtz
(1) & (2) University of Helsinki
(3) Temple University

Instructor:
Prof. T.K. Peng and Prof. Y.T. Kao

Presented by: Jeliteng Pribadi (JP)

PhD Program in Management
I-Shou University, Kaohsiung, Taiwan 1
 About the authors
Janne Kaltiainen, M.Soc. Sc. PhD Student at University of Helsinki.
Doctoral dissertation on employees’ experiences and perspectives on
organizational mergers. Research Keywords: leadership, justice,
fairness, trust, social identity, employee engagement, coping, stress,
and organizational change.

Jukka Lipponen. Social Psycology Researcher. Department of Social

Research, University of Helsinki. He has published 29 articles since 2005 in
various top tier journals such as Journal of Personnel Psychology,
European Journal of Work and Organizational Psychology, Group
Dynamics, Journal of Occupational and Organizational Psychology, Human
Relation, and Journal of Occupational Health Psychology

Dr. Brian C. Holtz, Associate Professor at Temple University, Fox School of Business,
Philadelphia, PA. BA in Finance, Portland State University, Portland, OR, 2000. MA &
PhD: Industrial-Organizational Psychology in 2003 & 2005. George Mason University,
Fairfax, VA. He has published 18 articles since 2002. His recent article published in
Journal of Occupational and Organizational Psychology, Journal of Managerial
Psychology , Journal of Applied Psychology , and Journal of Personnel Psychology, and
Journal of Organizational Behavior. 2
 About the paper
• Keywords:
 justice/fairness, leadership, longitudinal study, mergers and
acquisitions, trust
• General Subject:
 2 fundamental concerns in organizational change:
• employees’ perceptions of merger process justice and
• cognitive trust in the top management team.

• Specific Subject:
 to elucidate the reciprocal relations between justice and
trust variables over time.

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 Introduction
• Studies in Organizational Justice and Trust: a lot
• But, relations between these constructs “remains
poorly understood”
 Justice  Trust” (Colquitt & Rodell, 2011, p. 1202).
 Justice ↔ Trust (Holtz, 2013)

• A complete understanding concerning the dynamic relations

between trust and justice is important  to provide
sound guidance for the effective management of employee
reactions to significant organizational events (Holtz, 2015).

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 Cont..introduction
• The first empirical test of reciprocal relations between justice
and trust assessed across more than two time points
• This study answers calls for:
– more longitudinal research into the temporal dynamics of
justice perceptions (e.g., Fortin, Cojuharenco, Patient, & German,
2016; Rupp et al., 2014) and
– to consider the role of trust cognitions in shaping justice
perceptions (e.g., Colquitt & Rodell, 2011; Lewicki, Wiethoff, &
Tomlinson, 2005).
– to better understand how employees’ psychological
reactions unfold throughout a merger process (e.g., Monin,
Noorderhaven, Vaara, & Kroon, 2013; Nemanich & Keller, 2007).

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 Hyphothesis
1. Process justice perceptions will have a positive relationship with
subsequent cognitive trust, controlling prior cognitive trust.
2. Cognitive trust will have a positive relationship with subsequent
perceptions of process justice, controlling prior process
justice perceptions.
3. Process justice perceptions and cognitive trust have positive
reciprocal relations over time.
– Specifically, planning stage (Time 1) process justice (cognitive trust)
perceptions will have a positive relationship with subsequent post-
merger (Time 2) cognitive trust (process justice) perceptions, which in
turn will have a positive relationship with later post-merger (Time 3)
process justice (cognitive trust) perceptions.

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 Research Model

Cognitive Trust Cognitive Trust Cognitive Trust

(T1) (T2) (T3)

Process Justice Process Justice Process Justice

(T1) (T2) (T3)

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 Purpose
• To better understand the nature of reciprocal
relations between these important constructs
through a significant change event.

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 Contribution
• Examining cross-lagged longitudinal relations
between these critical psychological reactions,
• Contributes across multiple domains of the
management literature including trust, justice,
and organizational mergers

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 Method
• Using 3-wave longitudinal survey data
(N 622) during a merger process
• Tested reciprocal relations over time
between cognitive trust in the top
management team (TMT) and perceptions
of the merger process justice.

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 Sample
• A merger of two civil service organizations in Finland.
• 15,000 employees affected.
• Online surveys; 1-year intervals to capture the
psychological experiences  the full merger process.
• 3 surveys: (n1 3,679), (n2 1,181), and (n3 623)
• One respondent was on top management  excluded.
• Time 1, M = 47.5 years (13 to 15 years org. tenure).
• Female (88%)
• Bachelor’s degree or higher (57%).

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Figure 1. Timeline of the merger process

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 Measures
• Merger process justice (perception):
6 items modified from Moorman (1991) and Mansour-
Cole and Scott (1998).
– Items focused on the fairness of the decision-making
process and implementation of the procedures during
the merger.
– Items were assessed on a 5-point scale
(1 completely disagree; 5 completely agree).

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Measures: Cognitive trust in TMT

• 4 items adapted from Mayer and Davis (1999)

– The competence and reliability evaluation of TMT,
(including head of organization and divisions).
– At each measurement time point, the referent of the
cognitive trust measurement was the current TMT.
• TMT changes occurred (1-year data collection)
– [Time 1 - Time 2]  11 of the 12 members of TMT
replaced or discharged.
– [Time 2 - Time 3]  2 of the 7 managers in the TMT
changed.

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Control variables
1. Effect of post-merger perceptions of outcome favorability
– Outcome favorability: (1 mostly negative; 7 mostly positive).
– outcome favorability can affect the level of trust toward authorities
(Brockner, et al., 1997).
2. Three time-invariant variables
– Pre-merger organization (0 organization A, 1 organization B)
– a merger process can be experienced and perceived differently
depending to which merging organization an employee belongs to
(Giessner et al., 2012).
3. For the participant’s position in the organization
– (0 employee, 1 supervisor or middle manager)
– the higher-level employees can have a different viewpoint on the
merger process and the TMT

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 Analysis
• SEM in Mplus 7.2 to estimate models with latent
factors.
• Covariances among the items’ residuals over time
were estimated as recommended for longitudinal
SEM.
• Models were estimated using the maximum
likelihood estimation with robust standard errors
due to non-normality in the indicators.
• All the model comparisons Satorra-Bentler
scale corrected chi-square difference test.
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 Findings
In contrast to the conventional unidirectional
notion of trust: perceived justice  trust
• It show positive reciprocal relations over time
between cognitive trust and justice.
• Also, the positive influence of cognitive trust
on subsequent justice perceptions was
slightly more robust than the opposite
direction.

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 CONCLUSION
• Relationships between justice perceptions of
a merger process and cognitive trust in TMT is
reciprocal.
• Cognitive trust is an antecedent of process
justice perceptions
• The relations between cognitive trust and
justice perceptions are more dynamic than
has traditionally been conveyed in the
management literature.

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 Limitation

• The data were collected using a self-report

survey.
• Common method variance is a potential source of
measurement error (e.g., Podsakoff, MacKenzie, Lee, &
Podsakoff, 2003).
• The longitudinal study limitized to three
measurement in 1-year time lags.
• Shorter measurement time lags could produce
stronger relations, be less vulnerable to interim
effects, and capture potential fluctuations (e.g.,
Dormann & van de Ven, 2014; Fortin et al., 2016; Little, 2013).

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 Future research
• Different longitudinal designs
– more frequent measurement time points and
longer time spans.
• Longitudinal relations
– different trust-related cognitions and justice
perceptions.

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