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Human Due Diligence

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Human Due Diligence

“The success of most acquisitions hinges not on dollars but on people” (Harding, Rouse, 2007). It is often said that people are the most significant and important resource of any organization, yet due diligence sometimes focuses on the corporate, financial, and legal dimensions of the deal while ignoring the people issues. Financial motivation are only a small part of the picture in most mergers, while success and failure of consolidations are profoundly connected to people involved-so human due diligence is critical.
In any business, the people in the organization are its primary asset. Human due diligence is an in-depth analysis of the management team, staff, structure, issues, and managerial capacity of a …show more content…

How replaceable or irreplaceable are the skills of the potential partner? Organizational Capacity: Is the organization geared for growth? Do they have the resources, capacity, and flexibility to survive a major organizational transition? Succession planning: The existence of a succession plan is a good indicator of how well the organization thinks about the future. Has there been any thing about succession planning on the senior staff or board level? (Thornton, Ruskin, 2004) 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). The process of strategic restructuring involves uncertainty, and a realignment of the structure and management of the organization. As noted these individuals who are most at home with the necessary activities of one developmental phase of an organization are most likely to experience the next stage as a loss. As a result, the reaction to even the potential of change is resistance. There are steps to help negotiate and transition your employees. Do not harm. As with a doctor who takes the Hippocratic oath, you

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