Impact of locus of control, changes in work load and career prospects on organizational commitment of employees of life insurance companies during merger and acquisition

Abstract

This paper explores employee organizational commitment in the process of merger and acquisition. A case study of a life insurance merge and acquisition case in which the acquiring company was a local life insurance firm and the acquired company was a foreign-owned insurance company in Taiwan is used. The present study explored two issues: (1) whether employees of the acquiring company and the acquired company perceived changes in work load and career prospects differently during the process of absorption and exhibited different levels of organizational commitment to the surviving company; and (2) the structural relationships between organizational commitment, locus of control and the perceived changes in work load and career prospects for employees of the two companies. We found that work load change and career prospects change is perceived by employees of the two groups invariantly; employees of the acquiring company have higher level of organizational commitment than those of the acquired company; the direct influences of work load change and career prospects change on organizational commitment are statistically significant; the direct influences of locus of control on organizational commitment, work load change, and career prospects change are statistically significant; the indirect influence of locus of control on organizational commitment is statistically significant; and the moderating effect of locus of control is not statistically significant.