An Hr Manager's Guide to Mergers and Acquisitions

With this merger, and the total integration of the smaller insurance company into our company’s current organization structure, the focus naturally turns to continued revenue, operational synergies, and even new service concept. However, we must not lose sight of the most important element of a merger—the adjustment the employees must make to the new organization. It has been shown repeatedly that mergers of this type often have negative impacts on employee behavior, resulting in a loss of productivity, absenteeism, low morale, and low organizational

One of the key concepts associated with mergers and acquisitions is strategic fit. Companies operating in the same sector must have some degree of alignment in terms of competitive situation, strategy, organizational culture and leadership style. Greater overlap of these elements between organizations creates a more conducive environment for merging two separate companies into a single entity. Although many factors play into these alignments, company leadership spearheads these elements and, therefore, contributes the greatest influence among them.

The integration phase is the final phase of a merger and acquisition. This is typically where managers underestimate the magnitude of issues. Problems arise due to over estimation of synergistic benefits, culture, and communication issues between departmental managers, employees, and customers. Culture clashes are a huge issue in mergers and acquisitions. From our research, we found many companies underestimate the severity of these clashes. Each company has its own environment and the smallest changes can upset a whole organization if it is not dealt with

Culture incompatibilities. In an article written by Schraeder and Self (2003), it was revealed that organizational culture is a factor identified as a potential catalyst to merger and acquisition success. According to the authors, cultures are an integral part of an organization. Some researchers believe that culture is to an organization is what personality is to an individual. During a merger or acquisition, the difficulty of modifying the culture of an organization to fit the other becomes quite salient. Thus, culture difference is seen as a major obstacle in the transition of mergers and acquisitions.

A merger is a form of business that is made up of two or more businesses operating in the same industry coming together to better their services. One of the recent mergers that have happened is that of the Southwest Airlines acquiring the AirTran Airways for several reasons. On making this important acquisition, it is very clear that the operations of the services offered by the airline will expand to different parts of the world with some changes being needed in the parent airlines. The merger will lead to a huge number of employees coming together and forming one large organization whose operations will be determined by different managers and officials from those who they are used to. As such, it is very important for the human resources department of the concerned organization to come up with the best strategies of making the merger for purposes of making the merger successful. As such, this paper will highlight the importance of the acquisition, the problems that may arise in the organization and the strategies that could be developed by the human resource department to successfully form the merger.

The organizational climate within an organization or company is very important and complex. When two companies merge with different corporate culture, it is important to find out which cultures to keep and which to lose. In determining the best practices, it is important to keep your employees feelings in mind. After all, without the employees, there may be no organization. Acquiring a company that has a different culture than the culture instilled in my company, will bring up many challenges and unique topics. The way management addresses these challenges, will

Human Resources approach performs an extremely essential function in creating and maintaining competitive advantage; many organizations disregard the importance of HR in creating competitive advantage. The three priorities will require a major transformation in the organization. HR strategy should support the conversion, and help the workforces to acclimatize in a different environment. One major objective of the innovative HR strategy will be to create a healthy organizational culture that supports innovation, collaboration, and intercontinental operation. Leadership plays an enormously important role in developing a healthy organizational culture. (Dessler, 2013)

Organizational culture is the most important issue to consider when acquiring another company. While some cultures differ from others, that doesn’t necessarily make them weak cultures. Key questions to ask are; how well will the companies cultures mix with each other? If changes to either culture occur, what implications does this have on productivity and efficiency?

HR professionals play a critical role in the success or failure of mergers and acquisitions.

John (1999) said that one of the biggest problems faced by those managing the merger and acquisition process. The world of business has transform from an industrial to an intellectual basis, and while those managing M&A 's are still busy studying all the old parameters, they are missed out all the new important point.

How all the above discussed issues can be meld together to form a healthy culture of the merged or acquired company?

Lodorfos and Boateng state in their article The Role of Culture in the Merger and Acquisition Process that the “magnitude of cultural differences can effectively impede a successful integration…resulting in poor overall performance” and “cultural heterogeneity creates tensions and affects financial and managerial

Critically evaluate the factors influencing MNC’s ability to transfer HR practices from one national context to another.

A Research Study for integration of different national enterprise culture: One of the difficult problems of cross-border mergers and acquisitions------case study for China electron Company.

A Research Study for integration of different national enterprise culture: One of the difficult problems of cross-border mergers and acquisitions------case study for China electron Company.