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
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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
The most important resource, and the one in least supply, is additional time for those involved in restructuring. When implementing change, you must be creative with time, all the plans be perfect however if there is no time for the people involved to come together the perfect plans cannot be executed. Guideline five, acknowledge the emotional reaction to change. When implementing change, you should anticipate emotional reactions to change. The stages of emotions are; uninformed optimism, informed pessimism, hopeful realism, informed optimism, and a sense of rewarding completion. Guideline six, anticipate restructuring problems and identify problem-solving skills. Attitude and emotional issues; process factors such as lack of coordination, planning, or communication; and lack of resources are a few problems that should be anticipated whenever change is being facilitated. Other predictable problems are unanticipated crises, competing demands, limiting physical environments and perceived low or minimal control among those involved in the change effort. Effective problem solving approaches
Fourth, both health care organization are anticipated that during our organizational restructuring on the Care Select Health System would most likely affect job satisfaction levels and potentially compromise the quality of services provided, yet evidence on the impact of hospital mergers on staff satisfaction is surprisingly scarce. Therefore, Care Select Health System staff might perceive mergers as a breach of the psychological contract (implicit commitments and expectations between employers and employees) when they feel they are not listened to, when they have to ‘suffer’ from delays in service development and job uncertainties. For instance, cultures of merging organizations might also clash when they have opposing attitudes towards
Organizational change is a very critical and yet very inevitable process ofan organization’s structure. It can create a lot of pressure from the workers as well as management as a result of fear of the unknown.
Choosing the right leadership, not only for the merger integrations, but also for the new combined company is important in terms of vision, mission, culture, and expectations. A leader should focus on the larger design of the new corporation. A leader has to resist the temptation to take the easy way out. It is not pleasant to deliver bad news or to be a naysayer, but it is necessary at times. It is also important for a leader to promote and ensure good morale. This starts with treating people with respect and listening to their opinions, rather than telling them what to do. “Leaders set the tone for the culture and for how relationships are going to unfold in the combined organization” (DiGeorgio, 2003, p.260).
The board and administrative staff can calm the fears of the staff before and after the consolidation by first reframing using dividing terms such as the word “us” The two organizations will be merging therefore the boards will have to come together to avoid sides. Human resource managers will also need to step in and help manage employees. To help human resource managers can create employee suggestion programs. This will encourage employees to create and identify improvements, process, and outcomes for the
6. Organization development consultant David Nadler was interested in developing a model of how large companies cope with restructuring in a competitive business environment. With a team of consultants, he followed the restructuring process of Xerox Corporation for two years. He interviewed the CEO and the top managers at Xerox. He observed the behavior and analyzed the speeches of the CEO and the top managers. Nadler and his team collated and interpreted the information they had collected, and wrote up a detailed account of Xerox’ restructuring process,
Organizational change has many concepts from wide changes to small changes that can affect a company. Introducing a new person into the company, changing mission statement, restructuring, and even adding stock options are examples of organizational changes. According to Spector it is important to understand, analyze the dynamic of change, and requirements of effective change implementation. Successful changes requires management to explore many drivers of change. Strategic responsiveness occurs when external factors affects the company for example, government regulation, new competition, and economic changes. In response to these events an organizational change is necessary to create and
Very often, changes in strategy can lead to changes in the way the organisation is structured.
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.
People are the key to business success. However nowadays of business this is often neglected and people are seen to be a necessary expense. A successful business does not just rely on a person’s power instead it involves continuous effective teamwork and communication. Storey (1995) defines that human resource management is an individual approach to employment management which seeks to achieve competitive advantage through the strategic deployment of a highly committed and capable workforce, using an integrated array of cultural, structural and personnel techniques.
Human Resources constitute as one of the most imperative components of any organization, be it small scale business or a large conglomerate. Some of the key functions of the Human
The author currently consults in employee relations, organization change, and development. His clients include both private and public sector organizations.
Today in the global business world we know that strategic changes are fundamental in order to
The purpose of this report was to examine organization restructuring. Research for the report included literature based on organizational restructuring and the various processes involved in restructuring. The major findings indicate that the two methods commonly used for organizational restructuring to be downsizing and reengineering of business processes(Cummings & Worley, 2008). Downsizing assist the company to reduce its workforce, and this saves cost in terms of payroll reduction. Reengineering allows a company to change and adapt to the way it
Also, employees can be made redundant as the acquiring company can shut shown under-performing departments (eFinanceManagement, 2015).