Hr Issues in Merger & Acquisition

Pikula (1999) observes that in merging two or more entities, the management of the companies must adhere to the Sherman Anti-trust Act which was established in 1890. This act was specifically established to prevent mergers from creating monopolies and cartels with an aim to exploit the consumers through determining prevailing market prices. If the merger results in a monopoly, it won’t be approved by the government. Employee contractual agreements must be considered before, during and after mergers. For the merger to go on seamlessly there should be shareholder approval. Initial approval by shareholders for the companies to consolidate their operations helps prevent conflicts from shareholders after the merger. Lastly, regulatory approval should be considered. The management must register the newly formed company. In addition, managers from the merging parties must consider agreements and contracts that the parties are engaging in as these will be transferred to the new company upon the merger.

When companies combine/merge the whole objective is to gain new opportunities, gain market share, grow the business, to become more innovative and to improve product offerings, utilizing/sharing the existing resources and data. From the case

Organizational culture comprises the fundamental values, assumptions, and beliefs held in common by members of an organization (O’Hagan, & Persaud, 2009). What is known is that employees often impart the organizational culture to their colleagues whereupon the culture effects how employees relate to one another and their work environment. What can be said is that the development of an organization’s culture is dependent on elements such as structure, change and policies (Urrabazo, 2006). Furthermore, according to Griffin, Moorhead and Gregory (2009), it is recognized that employee’s behaviours and attitudes can be influenced in a

The employees have not easily merged. Changes brought about by the merger have resulted in 10% of the workforce choosing to leave the company. Unfortunately, some of the most reliable and productive workers have left, and others are expressing their dissatisfaction with the new working

Work-related cross-cultural interactions are very often failed costing organisations large amounts of money and significant effort. In addition, according to EEOC reports for 2011, nearly 100,000 filings for workplace discrimination had took place in the private sector, representing an all-time high. Workplace adjustment is another significant reason associated with organisation’s turnover and costs. According to Oberg (1954), people have the tendency to suffer from culture shock when they moved between different types of cultures. The phenomenon of culture shock is crucially important on the grounds that it results into both psychological and physiological effects such as depression and insomnia.

The American population spends a large percentage of time at their place of business. The culture of the work environment plays a major role in an employee’s happiness, in addition company culture affects employee retention rates and the quality of work the organization produces. Issues such as conflict resolution is a major facet in employee satisfaction

With the ever changing economy many companies today must evaluate strategies and practices to allow for optimum diversification and financial success. With the changing the marketplace organizations may turn to mergers and acquisitions to further diversify their business portfolio and expand their reach within the community. As organizations merge there are many variables that need to be considered, namely the employees which are the most important asset of both entities.

An organization’s culture governs day to day behavior. This type of power may be seen as a control mechanism, which businesses use to manipulate internal and external perception. Every organization has a set of assumed understandings that must be adopted and implemented by new employees in order for them to be accepted. Conformity to the culture becomes the primary basis for reward by the organization. “The role of culture in influencing employee behavior appears to be increasingly important in today’s workplace, as organizations have widened spans of control, flattened structures, introduced teams, reduced

One way to get the answers to these questions is to have an outside agency speak with senior leaders, one at a time — or, if that is not possible, to have them circulate a brief confidential survey and present the results at a facilitated meeting. Difficult questions, for example whether there are alternatives to a merger, should be raised as early as possible.

In the environment of a strategic restructuring process the management of employee relations becomes more critical and more difficult. The stakes are raised during the merger because you have injected and element of change into the employment relationship. Employment relationships are, at their best, found in trust. Trust can quickly be replaced by suspicion in times of great organizational change (Wells, 2004).

Another kind of merger is when the buyer takes on the assets and liabilities of the merged company (Romanek, Krus, 2002). According to Romanek and Krus (2002), this kind of business transaction is referred to as statutory merger. On the other hand, a subsidiary merger is when the target company becomes a subsidiary of the parent or acquiring company, wrote Romanek and Krus (2010). Although, the target company ceases to exist in both types of mergers, in a statutory merger, the target company maybe operated as a subsidiary, using its brand name, but is controlled and owned by the acquiring company.

In recent years, human resource managers have been activated to play a more strategic role in their organizations, especially in making strategic decisions and going through radical organizational changes such as merging process. Nowadays this requirement is even more urgent and act due to the fact that the past decade has been characterized by enormous growth in mergers. HR Management should establish a deliberate plan and procedures within strict implementing to reach the organization objectives.

Managers were concerned about knowing and understanding each and every perspective of their employee’s cultures. As they know that without studying or knowing the culture, coordination cannot be built between the employees. It is the existing perspective of managers dealing with cross-cultural management (Sultana, 2013).

The shared characteristics and, in some cases, perception of employees create what is known as organizational culture. A strong culture constructs a unified employee atmosphere, whereas a weak culture lacks a shared sense of distinction between employees. An employee’s heritage or individual culture, although different than, affects the overall organizational culture of companies. Like society, sub-cultures exist within organizations. Formed by departmental function, geographical location, and/or the personalities of employees, sub-cultures include employees who continue to adhere to the organizations’ overall culture, but have additional independent characteristics. Employees’ individual heritage, along with the culture and

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