It is advisable they communicate employees early, immediately. They can do it using webcast, intranet or group meetings. Informing all the employees at the same time will minimize the potential for gossip and spread of misinformation. They should make employees realize the benefits of this marriage. After the announcement of merger, Cisco always has its executive owner present and involved. Senior executive in both the organization should create goals, values, vision and policies of the new company. It should be clearly communicated to the organization.
She received the award of excellence in Non profit Leadership Award on 10 th May, and in the interview she said that her mantra of success was clear vision and the communication of this vision to the employees. Culture difference was largely responsible for the downfall of merger between Chrysler and Daimler.
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Daimler and Chrysler employees have different views on important things like travel expenses and pay scale; even they have a different approach towards life; Daimler favoured a more formal and structured style while Chrysler favoured a more relaxed and freewheeling style. This cultural conflict played a big role in the failure of merger of Daimler and Chrysler. So Leaders should be able to inspire people to come out from their comfort zone and accustomed norms and accept the new ones.
And to achieve this, leader must be in constant touch of the employees. Spending time with them, knowing more about them, what irritates them, what excites them will help leader in making people accept the new culture. Building trust is integral to building knowledge. Until the two sides trust each other, they will not reveal details.
This will make customer safe about its purchase order. And if required, the merged unit can create helpdesk also. This will reduce the number of unsatisfied customers and thus increases customer base and profitability. Cisco does that. Whenever Cisco acquires company, it immediately shares the product roadmap which keeps the customer goal in align. Employees are always concerned about the carrier opportunities, new roles they will be assigned or will they be transferred to new location post merger. It is very important that HR discuss the aforementioned issues with the employees properly.
Effective Management Of Change During Merger And Acquisition
This might involve HR conducting management training, individual counselling, and providing other professional help to employees. They need to clearly communicate for what reasons these changes are taking place and why these changes are vital. Retaining good employees from both the companies is always crucial. A team can be build with human resource representative from both the organizations, whose main task is to identify valuable resources only.
This will create loyalty and commitment to the new company and it will also give employees of the acquired company a feeling of equality. It should be considered the last option.
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In downsizing, severe stress can be prevented by developing the proper plan. We can use any of the below mentioned technique depending on case:. Even BoM was also looking for private bank which can increase shareholder value, growth opportunities for its employees, and provide latest technology based services to its customers. Let us see how the leaders of the organization manage change during this merger. ICIC concentrated on individual unit as profit centres.
While BoM concentrated on the profitability of the overall bank as a whole. There were large differences in profiles, grades, designations and salaries of personnel. Because of these differences, BoM employees feared that their positions would come in for a closer scrutiny. When the merger took place in , it was hailed as a triumph. Both the companies lost revenue and split in Few of the reasons are mentioned below The challenge before both the companies was to bridge corporate culture differences. It was required that the leaders of both the organization create proper vision and integration plan and make the employees accept the new reality of the business.
They were no proper communication from the senior executives. In the absence of this, there was chaos in both the organisation and the employees were not sure as to which culture should they adopt and continue with. The AOL was centrally managed while Time Warner was more or less decentralised where manager has the decision making power.
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There was remarkable difference in the official dress code for the both the firms and there was no proper understanding among the employees as to what would be the formal dress code after the merger. All these factor lead to a situation where one can say that there was lack to manage the change.
Both the organization employees should have demonstrated respect for each other culture; this would have encouraged collaboration. It is human nature to resist change as it is as good as to unsettle the settled one.
The change management is very important for any organisation be it a change in the place or be it change in the system. The changes management becomes more vital in the case of merger and acquisitions as it does not affect one or few employees rather it has the widespread reach and effect. It is very important for the organisation going for mergers and acquisition to understand the importance of managing changes and plan suitably to have a smooth changes management.
There are many instances where the change, if not managed properly, lead to the situation where the situation is reversed. It can be concluded that companies should have a proper change management system in place during mergers and acquisition. Companies involved should understand each other culture and understand the importance of change. At the same time leaders from both sides should understand the complexities and keep employees from both side involved during the integration.
They should be very clear and honest in what they communicate to the employees otherwise risk of resistance and sabotage will proliferate. Providing clear, consistent and honest communication also helps companies to retain customers and loyal employees and thus increases the efficiency of the merged unit. Thus, communication seems to be the most important factor to make the marriage successful.
Your Name required. Your Email required. Your Message. Register Login 0 Items. Abstract The on-going dance of merger and acquisition happening every week is hard to miss. Introduction In mergers, two or more companies engage in some negotiation which ultimately leads to transaction. Europe There is not much emphasis on domestic acquisition, as companies from these regions continue to show an increase in desire to drive growth through a cross border acquisition. Objective To study the factors which lead to resistance to change To suggest ways in to overcome their resistance during merger and acquisition.
Factors affecting the equilibrium of merged unit Each organisation which is merging brings a culture with itself, when merged with another, is bound to affect each other. Factors such as internal politics, technology, legal system, IT system and accounting system often affect the alignment and relationships thereby demanding change in related business units and employees of that unit.
Structure-focused change: When two organizations decide to marry each other, changes like downsizing and decentralizing are bound to happen to reduce costs and increase the productivity and efficiency. Person-focused change: This change is concerned with the human resource planning and enhancing employee competence and performance. In order to induce such change human resource management needs to tackle issues of redefining organization goals and strategy, recruitment and selection policies, stress management, employee training and development, benefits etc.
Profitability issues: It includes issues such as loss of revenue, market share, low productivity, engagement with processes of restructuring and reengineering lead to major changes in the organizational setup. Resistance to Change During merger and acquisition, organisation faces the most abstruse and recalcitrant problem: resistance to change. Lack of Communication The manager has not communicated well the detailed aspects of the change.
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