Company X has recently been acquired by Company A and the cultures of the two organizations are vastly different. Company X was a traditional, bureaucratic and hierarchical company while Company A functions more like a modern, fast-moving firm. While this fact alone is likely to lead to a culture clash, the owners of the new firm have decided to create a talent and leadership program and are looking for employees who worked with Company X to join the program and lead the business.
While the takeover itself has certainly impacted the psychological contract since as suggested by Garrow (2003), mergers or acquisition is one of the toughest storms a psychological contract has to go through. However, the process of identifying and selecting candidates for the new program will have an even bigger impact. Even before the process begins there are four categories of employees, who can be expected to show an impact on the eventual election results, i.e.:
The psychological contract in all these cases will be impacted differently. The term itself has been defined in different ways by many writers but the generally accepted meaning of the psychological contract is the implicit contract of understandings between the organization and the workers as they relate to both the expectations of the employees and the obligations of the employer (Emott 2006).
Guest (2004) takes an even wider view of the contract and says that the understanding of the psychological contract should incorporate fairness to both parties and mutual trust. Since the contract is implicit, it is difficult to judge how it will be impacted with changes in the company, but at the same time, it is important to consider the psychological contract before any change is announced to the workers.
The first case of employees who wanted to and have been selected is easy to explain in terms of the psychological contract. For whatever reasons, they considered themselves .capable and deserving enough to be made a part of the talent and leadership program and the company thought the same therefore there is no conflict between them. .