Effects of transformational leadership and TMT heterogeneity on M&A integration and performance in China

With the growth of mergers and acquisitions (M&As) in China, the role of leadership and organisational human resource factors in the integration and performance of these deals has been widely studied. In recent years, more and more articles are related to the merger integration, leadership and TMT factors affecting merger performance. However, there has not been sufficient research on combining them and developing a comprehensive model to understand their impact on M&A. Besides, the existing studies are mainly on the basis of the Western backgrounds, and the research on the emerging economies like China is insufficient. In order to bridge this gap, the purpose of this research is to explore how transformational leadership and TMT heterogeneity has an impact on understanding the performance of Chinese M&A transactions. A comprehensive review of the relevant literature is also provided to guide the related theoretical development. This study is guided by a total of three questions. Firstly, what is the impact of transformational leadership and TMT heterogeneity on M&A integration in China? Secondly, what is the relationship between M&A integration and performance in China? And thirdly, how do transformational leadership and TMT heterogeneity moderate the relationship between M&A integration and performance in China? The theoretical framework was tested with a sample of 295 respondents from six Chinese industries. The empirical results indicate the comprehensive support for the effect of transformational leadership on the M&A integration, whereas TMT heterogeneity is only positively associated with degree of integration, and insignificantly related to speed of integration. Also, the degree of integration is explored, indicating that it is directly proportional to staff satisfaction and engagement, TMT turnover and M&A success. However, the speed of integration is not statistically related to all of the dependent variables. At last, these findings indicate the partial support for the moderating effect of transformational leadership and TMT heterogeneity on M&A integration and post-M&A performance. In accordance with these results, implications for theory and practice are advanced by taking account into the unique organisational and managerial context of China.