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I.Communication>
During mergers and acquisitions, employees are often kept in the dark about the sale of the corporation. They often hear about the acquisition through the press or through the corporate grapevine. This can lead to a distorted or misrepresented picture of the acquisition's ramifications and to counterproductive activities by employees, who may be anxious about possible job losses. Therefore, Communication is of utmost importance in every stage of a merger or acquisition process, and is the key to its success.
It is very important for management to communicate clearly and regularly to all employees the implications of the merger, including the planned changes to working practices and organizational processes. Management should share as much information as it can with employees before, during, and after the acquisition. To be effective, the communication process has to be carried out in such a way as to avoid confusion and mixed messages. The communication process should also encourage two-way feedback between management and employees to make employees feel that they are contributing to the solution. By involving people at all levels of the organization, the merging companies are encouraging widespread acceptance of the merger process and reducing feelings of insecurity.
II. Retaining Key People
The retention of a talented workforce, which is often a major reason behind the decision to merge, should take priority during the merger process, and management needs to adopt measures to improve the retention rate of the best people in the merging companies. Truthful and thorough communication with employees can play a significant part in management's retention strategy. If the communication process is performed effectively, it can reduce employees' sense of insecurity and give them a better picture of what the future holds for them.
Pay and reward strategies can also play an important role in management's retention strategy but they need to be addressed early on in the merger process and should not only focus on senior executive pay, but also on the remuneration of employees at all levels of the organization.
III. Try to Establish a Common Culture
Successfully integrating the two cultures of the merging companies is an essential step towards achieving a successful partnership. Both organizations, the acquiring and the acquired, will have unique and beneficial cultural elements. Rather than imposing one organization's cultural elements on the other, 'the best of both companies can be integrated into a common culture for the new organization' (Hunsaker and Coombs 1988, 62). This can create a win-win situation for both organizations, since it will result in a corporate culture with which both sides can identify.
Defining and promoting the new corporate culture will enable employees to work together toward achieving the business goals of the new organization. Conducting a cultural audit is a useful way of obtaining useful information about the two companies' differing cultures and helps to evaluate differences and similarities in work standards and practices. That information can raise awareness of potential difficulties and issues in the merging process, and allows the merging company to take steps to minimise culture clashes by building an effective communication structure.
IV. Training and Development
Training and development should be provided to senior and middle management and should focus on all aspects of the merger process. Training should focus on the implications of the merger for the company, its effects on employees at all levels of the organization and its impact on working practices and organizational structures. Training should also educate managers on what each stage of the merger process entails for them and for the company as a whole. Such interventions will facilitate more effective leadership on the part of managers, who will have a better understanding of the key issues that arise during the course of a merger.
V. Try to Eliminate the Them-Us Syndrome
Acquiring organizations should try to eradicate any arrogance on the part of their personnel to ensure that acquired employees do not feel inferior and 'conquered.' A post-acquisition atmosphere fostering mutual respect among management groups will facilitate a better understanding of the others' perspective and make a smoother transition.
VI. Provide Individual Counseling
Individual counselling on personal adjustment and stress coping strategies can assist the employees to 'solve the problems associated with merger stress; recommend, demonstrate and initiate coping with merger stress strategies; or improve the employee's mastery'. In addition, a counsellor can unveil new career paths and job opportunities within the newly acquired organization, which can provide incentives for employees to remain with the organization.
CONCLUSION
Mergers & Acquisitions (M&A) has become the most important strategic element driving business growth and excellence. Mergers and acquisitions will continue to be an ever-present characteristic of the modern corporate landscape. Merger and acquisition (M&A) bring together different sets of people, processes and technologies with the common objective of creating a larger, unified organization. The organization aims to benefit from the synergies of merging organisations by consolidation, rationalization and integration of the people, processes and technologies of both organizations. Human Resources (HR) has the potential to play an important role during all stages of M&A. However, these issues are rarely considered until serious difficulties arise. The Human Resource dimension of M&A should be accorded the same emphasis and attention given financial, legal, operational and strategic concerns. HR no longer plays a dormant role and is emerging as a strategic business partner where key initiatives undertaken such as communication, training, counseling, career planning, support workshops, building trust, coaching and compensation planning, have significant business impact. |
