Abstract This study is conducted in the context of M&A. Typical for in-group members, we choose the situation that leaders and their subordinates come from the same organization before M&A has carried out. From previous research, we already know that the boundary of groups appears and group membership plays an important role as soon as M&A process is completed. We aimed at refining the previous studies by the following aspects. First, even if leaders and subordinates come from the same organization before M&A, the degree of upward trust may be varied with the implementation of M&A. Second, in the organization after M&A, both leaders and subordinates have at least two kinds of identity characteristics: one is group identity characteristics, which can be described as ″the group I came from″, the other is organizational identity characteristics as ″I am a member of newly-formed organization after M&A″. In this study, we focus on how both the group identity characteristics and organizational identity characteristics of leaders influence the upward trust of in-group subordinates in the background of M&A. On the one hand, from the perspective of group identity characteristics, leader group prototypicality is a determinant of both trust for leaders and leadership effectiveness. The degrees of leader group prototypicality represent the possibility that the leaders would obey the norms of groups and guarantee the benefits of in-group members. These behaviors of high group prototypicality leaders would arouse the feelings of subordinates that the leaders would be the protectors of group identity and reduce uncertainty accompanied by M&A. In this way, subordinates are more likely to trust high group prototypicality leaders since they would think ″leaders are typical group members, and I am also an in-group member″. We propose that leader group prototypicality is positively correlated with upward trust. On the other hand, in the aspect of organizational identity characteristics, organizational identity salience highlights that leaders would focus on the goals and interests of newly-formed organization after M&A instead of their own group that leaders came from. High degrees of leaders' organizational identity salience will weaken the boundary of groups and strengthen the common organization identity shared by all subordinates and leaders, convincing their subordinates that leader would behave from the standpoint of the newly-formed organization, rather than the group that leader came from. As a consequence, the original group identity characteristics will be gradually replaced by the organizational identity characteristics. Since leaders pay more attention to the development and integration of the new organization after the M&A, subordinates would hardly establish upward trust by judging whether the leader ″is a typical in-group member″. Therefore, we think that leader's organizational identity salience would negatively moderate the causality between leader group prototypicality and upward trust. In this paper, we explore the effects using two kinds of research methods: In study 1, we simulated M&A scenarios in laboratory, we choose the situation that leaders and subordinates came from the same organization before M&A as a typical representation of in-group members, by the sample of undergraduate students and MBA students, we preliminary verified the hypotheses above. In study 2, we conducted an empirical study by collecting questionnaires from subordinates of organizations that just encountered M&A. We found that the group prototypicality of leaders have positive predictive effect on upward trust, while the organizational identity salience of leaders negatively moderates the relationship. Based on Social Identity Theory, this research reminds us of considering both group and organizational identity characteristics of leaders when discussing the upward trust for in-group leaders, thus promoting the research on the antecedent of upward trust in context of M&A.
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