Effects of Merger on Employee Morale

High employee turnover, where workers frequently leave and must be replaced, leads to increased spending on recruitment and training and can indicate management problems. Employees often have good reasons for moving on but if too many are leaving an organisation, can be very disruptive.

Moreover, merger of the two companies carries along risks to human resources as it increases in insecurity among employees, lower levels of satisfaction at work, less affective commitment, and a loss of trust in the firms and management teams. Those issues would lead to difficulty in bending cultures, reductions in service levels, poor motivation and loss of key people and clients, and eventually impede the ability of the two companies to achieve their longer-term objectives and result in the failure of merger. [9]

When I consider the response to the request from the senior managers to explain the reasons and circumstances of our acquisition, I think of talking as the coach – this image of managing change imposes upon me the most. I have to admit that I am not the senior manager; I have only one employee accountable to me. But, as many other employees who experience change have their own fears and concerns about their positions and future work within the new frame of our company’s existence and operation.

Mergers and acquisitions has become an important part of the American commerce, which communication plays an important role in reducing the negative impacts. While Schweiger agrees that failure to communicate with employees during a merger will increase employee uncertainty and anxiety, he highlights that previous researchers (Napier et al., 1989) did not measure uncertainty nor any of the supposed dysfunctional outcomes said to follow uncertainty.

Mergers and acquisitions have become a growing trend for companies to inorganically grow a business within its particular industry. There are many goals that companies may be looking to achieve by doing this, but the main reason is to guarantee long-term and profitable growth for their business. Companies have to keep up with a rapidly increasing global market and increased competition. With the struggle for competitive advantage becoming stronger and stronger, it is almost essential to achieve these mergers. Through research I will attempt to dissect the best practices for achieving merger success.

As the world changes, many organization may create changes to their company structure in order to remain successful and look good amongst shareholders. These organizational changes may be beneficial for the company overall. However, it may affect the remaining employee’s morale. Some organizations changes such as layoffs, reduce work hours, a stagnate in benefits increases and rewards may result in management trying to figure out a way to motivate and gain employees trust and loyalty.

Sharing information and keeping the lines of communication open with the existing employees and new employees is going to be a vital requirement for this merger. Mergers tend to leave employees anxious which create increased stress and lower productivity rates among employees (Bhaskar, n.d.). An effective communication plan can help mitigate this problem and quickly return the company to full production when the merger has been completed. Starting communication lines early also help reduce the amount of speculation employees have. Even with before a merger deal is completed employees might get a sense of what is going on through a number of different channels. This can lead to

The cost of termination and turnover can be devastating for an organization and can be even more devastating for those organization who can’t afford such

Once the merger has been finalized and integration is complete, middle managers need to assess their staff to be sure that each employee is doing his or her part to make the merge as successful as possible. If there are employees who are resisting the changes being made within the company, or not buying into the new culture and vision, it is necessary to evaluate the situation and

Communication is a vital element in at these stage of change process, constantly relaying information to all stakeholders including employees who might be laid off in the merger process, managers and administration. Bozak (2003) clarifies the above saying opening up and been honest and truthful about communication settles doubts in the minds of players involved the change process, which creates a “sense of security and trust in all those involved with the proposed change.” The inclusion of direct employees in the change processes like planning and decision making will promote a feeling of belongingness and empowerment, which in both long and short run will help to overcome majority resistance, because they understand the benefits to them, the company and their target clients. During the unfreezing stage, the important point in this stage is actively engaging all parties to work towards accentuating the positive driving forces and diminishing the restraining forces so that the merger and the inherent changes are successfully

Also, they don’t prioritize the necessary modifications causing confusion and negative reactions of employees. Some leaders don’t realize how it will affect their employees and begin to lose them. According to Jacobsen, merging companies can influence the companies due to different cultures and not adapting to the changes, In summary, Implementing changes take time to make all the following steps and providing the necessary training.

Mergers and acquisition plays an important role in survival/vitalization of a corporation in today’s market. It continues to be a breakthrough strategy for improving innovation of a company’s product or services, market share, share price etc.

Post-merger integration work is difficult, political, and often driven by teams that still have day jobs. Budgets are undefined, executive leadership is not clear beyond the C-level, no plans exist, and no one has done it before. Companies are willing to spend money on due diligence ahead of signing the papers, but do not always follow through to ensure that targets are met. In many cases, integration team members are plucked from the “operate and maintain” staff, and either cannot see or do not share the strategic vision of the “design and build” dealmakers. Companies that thrive from mergers do eight things (at least) correctly: Have a Plan, Communicate, and Measure Results, Dedicate the Team, Automate, Plan for Turnover, Focus on Business

For most, resistance to change inevitable, for some it is their personality and others it is fear of the unknown. Organizational structure may change through downsizing, outsourcing, acquisitions, or mergers. In this paper, I will be examining resistance to change during a merger and how to manage this type of stressful and many times unclear change in an organization. There are three key strategies for managing resistance to change; communication, participation, and empathy and support. Throughout this paper I will discuss the three strategies above as well as some other contributing factors to change in an organization.

According to the case study both companies are in the merger process. During the process there are significant changers applied to the both companies. In this report pre and post-merger processes ware analyzed mainly using following change management theories and models,