Managing Human Resources In Mergers And Acquisitions
One of the adaptions taken in Human Resource Management is the aftermath of both ‘Merger and Acquisition’ aiming to coincide in harmony within the company. It includes various types of financial transactions that are often dealt between one company and the other, during any merger or acquisition activity. I say ‘or’ because both terms are not synonymous. A merger requires both separate organizations to combine and create a newly formed entity. For example, if Costa Coffee were to merge with Coffee Bean, it would be defined as a newly found company, possibly named Costa Bean; however, both partners have an equal say concerning any business ventures, protocols, platform, etc. An acquisition on the other hand, is more defined as a full takeover of the other company. Therefore, all assets cease to exist once the company passes ownership to the next.
Thus, with any change there needs to be plans to readjust and adapt accurately towards the transformation. Reduce any indecisiveness that may occur and set a clear path that underway potential merger or acquisition. As the company alternates, errors may arise. Such include: “ending up paying too much, lack of strategic clarity, slow decision making, poor integration planning/execution, and culture clash. ”1 The main reason any M&A goes into account is because their main goal is growth. Through taking in new products, customers, and even paving way to new market chain. If done successfully, there can be an increased profit. Based on the points stated above, they are more common due to lack of strategic development. Such stated as lack of clarity, needing to acquire the company based on wrong or unclear reasoning. If companies overpay due to being scared of competition, that also does not settle in a well finalized contracting agreement in the long run.
A different management style is taken within human resources management that upholds a strategic impact when mergers and acquisition is involved. Having to introduce different sets of style and techniques are a struggle in itself, especially if communicative barriers are to come in contact. That is why it is defined as one of the most crucial and key critical factors to face any company that is to undergo either process of merging one company to another or having to ‘swallow’ and conform to the other company. Hence, HRM should invest and apply an efficient approach to recalculate leadership post turnover or developed change.
Once M&A occurs, the company through HRM needs to assure the trust between employee’s and top managers is stable throughout the transitioning phase. This is where a compensation tool comes in play, helping adjust fair structure. The main common stated conceptual tools are: resources: includes staffing and retention issues, processes: where firms convert the resources into valuable goods/services, and values: these are what shape an employee’s priority and decision making, i. e. think about what they do and why they do it. 2HRM should assure there are more motivators than de-motivators, following the transition phase, to its employees. As it is the most sensitive state of diversion across M&A practices. Because when two organizations collide as one, there will be a ‘team a’ versus ‘team b’ dispute. Team a being the company bought or having merged by Team b. It’s then the responsibility of the human resources department to encourage hostility in the workforce. Ideally, HRM would need to best set up the ‘what-ifs’ and ‘what-haves’ beforehand. Having it planned out in advance will help HRM realize what to expect on both ends, and to successfully deal with any difficulties or plausible failures. The common advise within any business challenge or change is to question the company’s SWOT analysis. Consider laying out the complications and analyze if a harmonious alliance would result from this. The answers to this would help set the company’s HRM some guidelines to follow by and to take in the strengths pushed by an M&A, and use it as a means to influence employees to keep moving forward. As with any success, there comes failure. An example of failures through mergers and acquisition can be linked to eBay and Skype. As eBay miscalculated the potential profit that would in actuality decline and their unwillingness to take the time to deliberate their customers demand and calculate whether fully apprehended and long term, which undoubtedly was not, forcing eBay to sell Skype to a higher bidder.
The example above did not fully organize nor evaluate diligently. With any company if it were projected in a more successful manner that would include internal changes by assessing and executing a positive leading impact. In comparison, a more successful take on a company’s M&A is when Time Warner Company bought out America Online (AOL). By having to go in through with great management impact and implementing momentum. They took in communication engagement and attitude relations to a higher degree. Because the buy out was such a large sum of money, they realized a detailed and integrated launch should align accordingly with employee expectation. Setting newer HR policies that practice unbiased sets of productivity within the workforce. This aims by placing the best liable strategic decisions in action. As well as formalizing the principles and if it is in-check as a top performing company should be. In conclusion, regardless of merger or acquisition, there needs to be a form of synergy taken into account. The revenue needs to enhance, save cost, and continue adding as much beneficial aspects as possible. When M&A occurs, a growth occurs, that often take an essential load of time to recover. Reevaluate if competition is worth warding off. Consider the aftermath of M&A undergoing either process if it will drastically improve and attract newer incomers. Question any financial stability that will likely occur once staff is reduced. If cost increase by having a large number of workers having to do extra work hour, then that will increase their pay wage, which will double previous salary. Thus, it’s economically advisable to introduce newer technology. To stay on the edge aside top organizations while trying to maintain cost effective standing value.
