The M&A is a complicated process and requires the company to conduct research and planning before the actual application. Meanwhile, the preparation stage’s role cannot be underestimated, as it contributes to the understanding of potential threats and opportunities. It is critical to determine a relevant action plan, which will prepare Caracal Light Ammunition (CLA) to the actual process while proposing the matters, which have to be emphasized during the implementation stage.
Firstly, value creation and establishing the objectives and goals have to be prioritized since it helps CLA maintain its finance on a sufficient level (Chanmugam, Shill, Mann, Ficery, & Pursche, 2005). In this case, the acquisition’s primary goal is to enhance the flow of the processes within the organization, as the ownership of Expert Future Cargo will assist in the reduction of costs and improvement of the logistics. Consequently, the acquisition’s critical intention is to advance the production process and the financial performance, and it could be said that selecting the required personnel, training, and leadership to ensure the efficiency of the process has to be prioritized.
Meanwhile, the management of CLA has to evaluate to ensure the organization’s functioning at a sufficient level, as the information provides the company with the basis for the decision-making (GeorgePShenas, 2009a). In this instance, the company has to access various acquired firm matters, including its financial performance and liquidity (GeorgePShenas, 2012). Furthermore, this analytical process defines CLA’s subsequent actions while providing the rationale for its future actions. In the context of the presented case, the company has to expand knowledge about the potential firms for acquisitions such as Expert Future Cargo. This aspect will define the company’s success in the future while affecting financial performance dramatically.
Furthermore, the risk assessment can be regarded as one of the critical instruments for completing the acquisition due to the matters related to the presence of conflicts and inadequate actions of the integrated company after the procedure (Lynch & Lind, 2002). The existence of the transparency will ensure the relationships with the rationale behind the decision-making and improve the quality of the overall process (GeorgePShenas, 2009b). It could be said that the risk assessment will not only help understand the overall threats related to the acquiring firm but also determine the potential jeopardies related to the external environment. This approach will help assess the issue from dissimilar perspectives while depicting all internal and external issues.
In turn, the evaluation of the required time will have an advantageous influence on the company’s functioning as the acquisitions are beneficial while being implemented within 12-24 months (Chanmugam et al., 2005). In the context of the presented case, the overall process will be implemented within 12 months due to efficacious leadership and communication network. Nonetheless, the due diligence timeline will be maintained since this aspect is critical for monitoring the costs and incomes related to the operations of CLA.
In the end, a combination of these factors will contribute to the understanding of the risks and opportunities related to the decision-making while preparing the organization for the potential changes and fluctuations in the environment. Nonetheless, CLA has to prioritize the goal setting, and personnel selection as the subsequent matters are dependent on this aspect. In turn, the information analysis and risk assessment role cannot be underestimated, as they define the rationale and appropriateness of the acquisitions while defining the due diligence timeframe.
References
Chanmugam, R., Shill, W., Mann, D., Ficery, K., & Pursche, B. (2005). The intelligent, clean room: ensuring value capture in mergers and acquisitions. Journal of Business Strategy, 26(3), 43-49.
In 1995, Kimberley-Clark, a company that specializes in paper products merged with another company known as Scott Paper in order to expand its business operations. However, the company is faced by a major problem which is influenced by different background facts. The first background fact is that after many years since its establishment, Kimberley-Clark decided to branch out its business operations by introducing personal hygiene consumer products into the market.
There are many reputable companies such as Procter and Gamble that deal in the same products. The company is therefore experiencing tough competition from Procter and Gamble and other companies that have been in the industry.
The second background fact influencing the current problem Kimberley-Clark is experiencing is the decision by the company to merge with its competitor, Scott Paper. Although mergers are important in business organizations, sometimes they cause problems that are difficult to solve. The decision made by Kimberley-Clark to merge with Scott Paper has introduced a major problem in the company because it is difficult to manage the two companies effectively.
The third fact influencing the current problem being experienced by Kimberley-Clark is lack of growth in developed countries as a result of market saturation. By the late 1990s, the managers of the company had succeeded in addressing some of the merger challenges it was going through. However, failure to secure markets in developed countries has affected its growth negatively. In addition, it is losing its market share to P&G.
Constraints of the Situation
The first constraint Kimberlay-Clark is facing is tough competition in the disposable diapers industry. Attempts by the company to diversify its market by producing new products are not succeeding because of other companies which have the same products in the market. For instance, when it introduced disposable baby wipes, Johnson & Johnson launched its own line of baby wipes. Tough competition in the market is therefore a major constraint that has been preventing Kimberley-Clark from diversifying its market successfully.
The second constraint kimberley-Clark is experiencing is lack of enough support from shareholders since it highly depends on them. Once the company makes decisions, they must be presented to the shareholders for approval. Sometimes the shareholders disagree with the decisions made by the company, something that makes its operations difficult. For instance, when it decided to revise its forecasts, the shareholders reacted negatively. This prompted the executive to reconsider the decision. This is a major constraint for the company because it cannot make independent decisions.
Problem and Related Symptoms
The first problem in the case study is that Kimberley-Clark operates in a competitive business environment. This makes it important for the company to identify a structure that can deal with competition in the market (Vance, 2009). In a bid to handle the competition, the company decided to merge with its rival, Scott Paper. However, the merger did not succeed because it introduced new problems instead of increasing profits. Integrating the two companies became a major problem, something that caused some of its managers to leave. This prompted Kimberley-Clark to conduct a restructuring process.
The second problem highlighted in the case study is failure by Kimberley-Clark to market its products fast. This is because there are many rival companies in the market who sell similar products. When the company decided to come up with a new product, the rivals also developed new and superior products. Even after introducing the grow, sustain and fix strategy, the company registered losses due to tough competition. This prompted the managers to introduce reorganization in order to deal with the problem. However, the company realized that a merger was a difficult concept to deal with because of differences that defined individual companies (Brock, 2002).
Answers to Case Questions
The main reason why Kimberley-Clark decided to use grow, sustain and fix strategy in its restructuring was because the strategy seemed the most appropriate to deal with competition in the market. The idea behind growth was that by investing in products that sold faster in the market, it was possible to gain profits within a short period of time. Such profits were supposed to enable the company to compete well with its rivals.
The concept of sustenance implied that the company was likely to succeed by investing in products that could not be moved out of the market by competitors easily. The first disadvantage of this strategy is that it is not easy to implement it since it requires large financial investments and development of new products. Its second disadvantage is that it might take a long period of time to realize the intended goals, something that would give competitors an opportunity to expand their businesses (Alkhafaji, 2001).
The organizational structure announced by Kimberley-Clark in 2004 was better than that of 2003. This was because it focused on emerging markets in order to maximize the growth of the company’s products. In addition, the new structure focused on products that were selling faster in the market. It was a good structure since after its implementation, positive results were recorded.
The decision by the management to reshape the identity of Kimberley-Clark as a consumer product health care and Hygiene Company together with its cost reduction effort would improve its competitive position relative to P&G. This is because consumer products attract customers easily. This would enable the company to earn more profits and compete with P&G (Organizational Restructuring, 2002). In addition, reducing costs would increase the financial stability of the company, thus making it more competitive than P&G.
References
Alkhafaji, A. (2001). Corporate Transformation and Restructuring: A Strategic Approach. New York: Greenwood Publishing Group.
Brock, D. (2002). Restructuring the Professional Organization: Accounting, Health Care and Law. New York: Routledge.
Organizational Restructuring. (2002). Web.
Vance, D. (2009). Corporate Restructuring: From Cause Analysis to Execution. New Jersey: Springer.
Decision-making is a critical process that has to be undertaken by any leader in the management of an organization. A systematic approach is required to take charge of the business. In some cases, it is necessary to consult and reach a consensus. In the case of a highly valued venture, decisive action is appropriate. For effective leadership and management to take place, the process of making decisions should be systematic and procedural. There are several models that can be used by leaders to make decisions. One of them is the Vroom-Yetton framework. According to Vroom (1976), the model is preferred when consistency and order are necessary.
In this paper, the author will discuss the decision that should have been made by Masayoshi Son with regards to the merger between Sprint and T-Mobile. The Vroom-Yetton model will be used to analyze the decision-making process. In addition, the significance of the model to contemporary corporate executives will be highlighted.
The Decision-Making Style that is Appropriate to the Masayoshi Son’s Case
A company merger is an important decision in the business world. Companies like T-Mobile are highly valued and their acquisition, as a result, is important to the competitors, such as Sprint. If it succeeds, the merger will increase Sprint’s market value and its income base (Gelles & Merced, 2014). As Masayoshi’s son, I would need to respond to the questions posed in the Vroom-Yetton model to determine the best style to use in making decisions for the company. The questions and their responses are highlighted below:
The quality of the decision
In the case of Masayoshi, it is important to take into consideration the quality of the decision made. The reason is that the merger is a huge risk that involves a lot of money and input from the team led by Masayoshi (Yao, 2014). A venture like this will determine the future of the company in terms of its market share and profit margins.
The importance of team commitment to the decision
The commitment of the team is necessary. However, at times, a decision from one individual makes more sense. All the decisions made in the company are carried out by the team. As such, without the commitment of the team, the decisions made cannot be actualized (Merced, 2014).
Information required to make the decision
There is scanty information regarding the merger. The situation makes it hard to make some decisions, especially those involving a risky venture like this merger (Merced, 2014). Government regulations and the ability of the other firm to provide the necessary documentation are crucial to the success of the resolution made.
Structuring the problem
The structure of the problem involving the acquisition of such a big company is complex. In this case, the structure required to make the decision-making process easy is lacking (Gelles & Merced, 2014).
The likelihood of the team to support the decision
The involvement of the team in the decision-making process is important to the business. With regards to the merger between Sprint and T-Mobile, the support of the team is assured even if the resolution is made by one person. The single managerial decision highlighted by Vroom (1976) is needed in this case. Reliable and committed leaders will have the support of the team even in cases where decisions are made by one party.
The link between the organizational goals and the team
Organizational goals bring the team together. As such, they need to take part in the process. To meet the organizational goals and mission, the team should work together even when crises arise (Rigolosi, 2005).
Conflicts between the team members
Conflicts between the team members over the decision made are more likely. According to Merced (2014), there is a government regulation that is opposed to the merger. The regulation may lead to an uproar among the workmates.
The Decision-Making Style Recommended for Masayoshi’s Son
A merger is a technical process and it involves serious decisions. In the case of Masayoshi, the son should involve the team in discussions to get their suggestions. However, the final decision should be his (Vroom & Yetton, 1973). The answer to this question is not surprising. The reason is that a critical analysis of the questions posed in the Vroom-Yetton model reveals that the decision made regarding the merger was inevitable. The process needs a clear mind and the information required should include the input of the team and other relevant agencies interested in the merger (Rigolosi, 2005). The figure below was used to arrive at this decision:
Figure 1. Vroom-Yetton’s decision-making model. Source: Rigolosi (2005).Decision-making takes place on a daily basis on all organizations. The choices arrived at have significant impacts on the operations and growth of the business (Stanford, 2007). A leader should make sound decisions that take into account the quality of the suggestions made by the team (Stanford, 2007). According to the diagram above, the type of decision-making process undertaken by the leader as per the response to question 7 is consultative (Rigolosi, 2005). Based on the existing information and the evidence regarding the quality of the merger, it is advisable to recommend this type of decision-making model to Masayoshi’s son in relation to their negotiations involving the acquisition of T-Mobile. It is the most appropriate model given the situation (Rigolosi, 2005).
The Significance of the Vroom-Yetton Model to Corporate Executives
According to Stanford (2007), managing an enterprise requires leaders to have skills in all the decision-making models. Executives play an important role in decision-making. As such, their input is crucial to the success of the firm. The parameters that determine the success of leaders include the commitment of other members of staff and the resources used in making decisions (Vroom & Yetton, 1973). Leaders are expected to assess the work environment and take into consideration the interests of the team they are leading.
It is recommended that corporate executives should be trained on the Vroom-Yetton model. However, the framework can be improved by including parameters that factor in a time constraint and lack of resources in the process of making decisions. In its efforts to acquire T-Mobile, executives at Sprint took the time to analyze the deal. A lot of resources were used to come up with a suitable deal (Gelles & Merced, 2014). Progressive decisions are required to improve the relationship between the managers and the employees.
Conclusion
The success of most business organizations is entirely dependent on the ability of the managers and the team they lead. Leadership plays a critical role in decision-making and the management of resources. As indicated in the case study analyzed in this paper, the growth of enterprises is determined by the decisions made on a daily basis by the managers and the employees. As such, all managers should have the skills required to make decisions. The Vroom-Yetton model can help them to achieve this. Masayoshi’s son and the entire team at Sprint can use this framework to make a sound decision with regards to the acquisition of T-Mobile.
Rigolosi, E. (2005). Management and leadership in nursing and health care: An experiential approach (2nd ed.). New York, NY: Springer Publishing Company.
Stanford, N. (2007). Guide to organization design: Creating high-performing and adaptable enterprises. Mason, OH: Bloomberg Press.
Vroom, V. (1976). Can leaders learn to lead?. Organizational Dynamics, 4(3), 17-28.
Vroom, V., & Yetton, P. (1973). Leadership and decision-making. New York, NY: University of Pittsburgh Press.
Yao, D. (2014). Moody’s: Sprint/T-Mobile merger faces negative free cash flow until at least 2018. Web.
Competition in the business world has forced several companies to adopt various strategies. Such business strategies include mergers and acquisitions. The companies coming into a partnership should formulate policies in order for the partnership to be successful. Well-conducted mergers lead to market growth, build complementary strengths, and eliminate potential inefficiencies. Since this process involves human resources, it is impossible to anticipate its success based solely on balance sheets via tangible factors like headcounts, market shares, and infrastructure, among others. It is for this reason that meetings between both teams become a crucial element in the process because what eventually matters is what is in the hearts and minds of the people and the culture that they decide to build while making progress.
Strategy for conducting meetings in merger/acquisition
Bearing in mind that these are two distinct entities coming together as one, the recommended strategy should involve scheduling of separate meetings with each team and then bringing all teams together. Such meetings will formulate and look into the objectives of each partner. These meetings will produce a report of intent outlining each team’s position and desires with respect to the merger. The separate meetings have several advantages. First, it will provide the involved teams with the opportunity to discuss projected deliberations informally and in confidence before making any further progress. Secondly, the teams will have a chance to separately discuss the jurisdiction, legal and other issues such as the scope of information to be presented and competition considerations. They will also prepare teams for the forthcoming investigations by identifying crucial issues at an early stage. Further, these meetings will lay a better foundation for all teams meeting to be conducted next because there will be an excellent understanding of the pertinent issues resulting in more conversant discussions on the transaction rationale and function of the merger in question. However, the cons associated with these meetings is that they consume a lot of time, particularly in complex cases that require subsequent meetings, thus delaying transactions for the companies involved (DG Competition, 2004).
The next step is bringing all teams together in one meeting under this strategy. The aim of these meetings will be to enhance intelligibility in handling daily merger issues and particularly ensuring good communication between the merging companies. It will also provide ample opportunity for the involved companies to conduct frank and open discussions and ensure that their standpoints are known throughout the merging process.
The importance of these meetings is that they contribute to both efficiency and quality of the decision-making process since there are transparency and good communication. They also provide a round-table through which information is mutually exchanged by the merging companies. Further, it is in these meetings that a non disclosure agreement will be signed by both companies to maintain confidentiality should the deal fail and incomplete declarations are eliminated. Finally, teams get a chance to deliver additional comments, thus facilitating coordination. However, a third party is required to ensure that each company’s rights and all legal issues are observed, hence incurring additional costs.
With this strategy, both companies will be guided, co-operation and understanding on business and legal matters will be fostered and built upon, the efficiency of research will be enhanced, high level of transparency and certainty in the merger review process will be ensured and the available short time for merger procedures will be made efficient and productive as much as possible for the companies and parties involved.
Venues for the meetings
Internal meetings scheduled separately with each team should be held in places where strict confidence is upheld and, at the same time, where real-time feedback to members present and represented is ensured. Therefore, the appropriate venue for internal meetings should be on each team’s company premises. This is because each team member will be selected from involved companies, and they are expected to guide integration. When held at the company’s premises, consistent communication will take place while employees receive on-time feedback and problems handled as they arise. Also, the employees will feel connected to the process, and the course will be adjusted easily as needed. It will also favor teams that are stacked in a hierarchical approach according to areas or levels of responsibility like a senior team comprising of several teams broken into units (Knilans, 2009).
Meetings with all teams at the same time should on the other hand be conducted at commission’s premises where agreements are signed down or alternatively by videoconferencing or telephony if appropriate. This is because discussions in these meetings are voluntary part of merging process and should be conducted without prejudice to the investigation and handling of issues. In addition, mutual benefits for the companies involved can only materialize if discussions are conducted in a co-operative and open environment where all crucial issues are discussed in a constructive manner. Further, such venues will ensure that discussions proceed in accordance with each team’s areas of concern and as per agreed agenda, as well as accommodating information exchanges and discussions throughout the process as appropriate (DG Competition, 2004).
Information that members of each team should bring to the meetings
Members of each team should bring in fully and openly disclosed information that relate to all possible competition considerations and affected markets, even if they consider themselves not affected and take a specific view to issues like market definition. Such information will ensure early testing of alternatives or other team’s positions on the issue in question. It will also minimize surprise submissions and avoid requests for extra information at late stages of the process.
In addition, the team members should also bring internal documents like reports, studies, surveys and analysis evaluating the proposed merger, economic rationale for the merger, competition significance and market environment where each issue will take place. These documents will provide information that will lead to early and conversant merger views as well as its prospective competitive impact, thus allowing fruitful deliberations and finalizations. These should be brought as early as possible.
Further, where appropriate, members of the teams should forward in the meetings any elements showing that the merger will result in efficiency gains and feel that such elements should be considered for the purposes of merger competitive evaluation. Since such elements comprise of claims that are likely to initiate further and extended analysis, members should be encouraged to present them possibly early to ensure that both companies and any other involved party has adequate time to appropriately put those elements into account in relation to the proposed merger. Both companies should not omit any part of the specified information. Omission, if any, should be done following detailed discussion and agreement.
Questions to ask IT people
The crucial questions to ask IT people are: What information systems and technologies were they using? Can both companies’ information systems and technologies be integrated and if so, how? Does the merger require upgrading informational systems and technologies or new ones? What functionalities or added value shall be upgraded or new information systems and technologies bring to the merger? How will all owners understand the new systems? By answering these questions, cost and complexity of IT environment will be reduced, redundant software and hardware will be eliminated, services will be consolidated and IT corporate standards will be enforced.
Questions to ask manufacturing people
Among the key questions that manufacturing people should be asked are: How will they deliver on the value they promised their customers in terms of timely and quality products while simultaneously maintaining their wheels on the business? How will they successfully integrate manufacturing operations while keeping their focus on customers? This will help in determining if the manufacturing people will employ a rigorously integrated manufacturing process.
Questions to ask distribution people
For this group it will be good to ask: How shall they restructure their distribution channel after consolidation? How shall they distribute the increased stock, use bigger fleets like Lorries or vans? What strategy shall they employ to minimize distribution cost and increase earnings?
Questions to ask marketing people
Marketing people on the other hand should respond to: What new marketing strategies shall they adopt? What will be their new brand name? Shall target customers change and how shall they target additional customers? Is there a new market definition? Such questions will lead to informed regarding market size, marketing strategies to be adopted and brand name to market under.
Most crucial roles to the success of the consulting engagement requiring most time/effort
In relation to this particular project, information gathering and analyzing are the most crucial roles of consulting team members to the success of the consulting engagement and will require most time and efforts.
Information gathering facilitates development of suitable antitrust strategy for the merger. In this particular project, it will entail tremendous costs in terms of time and efforts. This is because broadly speaking there are two types of information gathering to be conducted here namely; market power effects and efficiencies. Good understanding of scope and nature of competitive interaction to be created is required. Further, more time is needed in order to ensure that the information provided is not destructive, forged or making invalid evidence. Information must also provide actual and possible overlaps and competitive effects. It therefore requires more time.
Information analyzing in this particular project must identify, prevent and provide a remedy to those factors that are likely to downturn the merger and acquisition significantly. The aim of merging is reduction of costs, production of higher quality products, increase investments on innovation and efficiency. To achieve this goal, detailed information analysis is required. It needs substantially more time and effort because exclusive focus on identifying, preventing and remedying anticompetitive factors is required. Economic and legal issues pertaining to this merger must be analyzed to uncover all potential threats, and thus extra effort is needed.
References
DG Competition, (2004). Best practices on the conduct of EC merger control proceedings. Web.
Knilans, G. (2009). Mergers and acquisitions: Best practices for successful integration. Web.
Considering the labor form as important stakeholders is central to success during merger processes. Indeed, there has been several cases of failed mergers because respective companies had failed to meet employees’ expectations. This paper shall use the ongoing negotiations between Delta Airlines and Northwest to illustrate the importance of using best practices of managing organizational change during the merger.
The paper is divided into five sections, each dealing with a specific issue. The first part will provide recommendations on how pilots unions could be encouraged to support the merger. the second sections highlights ways of winning over rest of stakeholder groups especially Northwest employees. The third part provides an advice on how both companies regarding processes to be followed in case of hub closures, whereas the last sections highlights factors to consider when developing the new organizational culture.
Obtaining Pilot Unions’ Support
Pilot unions from both airlines are proving to be the harshest critics of the merger, meaning that respective management should do an extra job of convincing the pilots to embark on supporting the merger. There are several measures that can be undertaken in improving this process. First, the management should consider including employee representatives in decision making processes. Most importantly, both companies let pilots take center stage in re-designing the new seniority charts that would be used once the merger plans are complete. This process should further be as transparent as possible, which would increase chances of being accepted by either parties.
Secondly, management in both airlines should embark on illustrating their seriousness in matters regarding to the 2.4 percent stake that pilots. Negating from this promise, or showing lack of commitment could lead to diminishing support from the pilots. The stake that pilots would be getting from the company would lead to them looking at the merger as part owners, not employees. In this regard, the pilots would embark on elaborative process of considering the long run effect of he merger as opposed to the short run view on how respective pay and job security could be affected. Further, these new group of part owners would consider the interests of fellow stakeholders.
Third, senior management in the merging companies should consider keeping all stakeholders informed about the progress being made on the talks (Zajac, 2006, p. 209). Indeed, keeping the pilots informed about the merger process would lead to increase in chances of support. Most importantly, the pilot unions would be in a better position to air their opinions regarding the merger process before discussions proceed to stages that will make it hard for them to express views. This will also allow management and rest of stakeholders to iron issues out in a more productive manner. The management of both companies should therefore feel obliged to support the process.
Fourth, the merger committee should consider pilots fears that some of them would be laid off. This should be done in most gentle manner possible, which begins by listening to the pilots concerns and consequently embarking of looking for suitable solutions. Among the most suitable solutions would include providing descent send off packages to the pilots that could be laid off. In addition, both managements should consider the laid off pilots when there are job opening in the coming days. This would ago a long way in showing concern in former-employees-to-be, and therefore boost support from the unions.
Fifth, the pilot unions and especially representatives should seen as companions in the merger process, not variants. This would help in controlling the tight tension between the two stakeholders, management and pilot unions. The worst case scenario would be fore both airlines’ management to forcefully push the merger without a consensus between the two parties. This could lead to continued tug of war between pilots and management of the new airline (Delta).
The end result of such stand off could include constant pilot strikes and therefore disruption of the entire companies’ operations. Current management of the two companies should thus understand the important place that pilots hold for the new company’s operations. Starting the new airline with good relationships with the pilots would go into great heights of improving efficiency and productivity of this important crew. This is mutually beneficial between the airline, which would improve profitability, and employees who get better remuneration for their services.
Meeting Stakeholder Needs
Management of both airlines and the merger committee should also consider other stakeholders’ interests. In fact, the goal should be to include all members of the labor into the merger process, none should be left out. The interests of Northwest employees, currently being seen as losers in the merger (Parks, 2008) should be first in line to be considered. the management of both airlines should embark on the process of helping Northwest employees to see the merger as a win-win situation. In fact, just because the new airline would be named Delta and would be headquartered in current Delta’s facilities in Dallas does not make Northwest and its stakeholders losers. This would be the hardest task for the merger committee to handle.
The management should embark helping respective employees (in both Delta and Northwest) to consider the long run effects of the merger. First, employees should be helped to understand that synergies developed in the merger would help increase company productivity, revenue, and therefore their salaries. In addition to considering the long run effects of the merger, the management should communicate to the labor force on how both companies would have fared without the merger.
Management should especially expound on the effects of the incoming reforms of US air transport policy on the industry (Bartle, 2006, p. 17 ). Such convincing would result to improved understanding that the merger is a readiness to aggressive competitiveness that will as dawn on the industry in the next few years, and lack of it would be tantamount to exposing respective companies to extinction.
Just like it advised with regard to pilots, current management in both companies should embark on the process of keeping all employees well informed on negotiations. Understanding the progress being made on merger talks will help the larger labor force to prepare for the outcome. Additionally, employees with deep concerns regarding the process would easily discuss among themselves and forward comments to the merger committee, which will promptly address the concerns. Though the process could be regarded as more tedious, it provides one of the best routes of securing the much needed employee support that will lay strong foundations for the new Delta Airlines.
The merger committee should also consider the interests of various stakeholders that do not necessarily work in the two airlines but are direct beneficiaries. Most importantly, the merger committee should consider the interests of communities near the two companies headquarters. The localities are direct beneficiaries of both airlines operations, especially with regard to respective corporate social responsibility programs.
Residents in these areas could have feeling that all the benefits accrued through the many years of collaboration would be ended by the merger. Management have got an important responsibility of assuring that the historical support is there to last and maybe get increased. Such assurance would be go into great lengths of restoring calm in the worried communities that would also offer their blessings on Delta-Northwest merger.
Another group of stakeholders to convince are the current suppliers of respective airlines. Though these are businesses that have risk to in current undertakings, they need to be assure that existing contracts would still be honored and they will also get a chance of applying for concurrent ones with the new Delta. Such assurance will help sustain business relationships that have been working smoothly. In addition, the assurance will aid in the process of assuring the new Delta of availability of reliable suppliers in various hubs around the country. The bottom line for considering all these stakeholders is to ensure support for the merger processes, and ensure that the new Airline will have the much needed goodwill and dedication from stakeholders.
On Closing Hubs
There is speculation that the new Delta will have to close some hubs around the country in the process of cutting cost and thus improve efficiency. While this could be the case, the new management should not just eradicate the hubs blindly; it should consider or undertake the following procedures before making any move. First, there should be a cost benefit analysis on each various operations that seem less efficient in the new company’s operations (Gotts, 2001, p. 169).
Results of these analysis should then get compared in the process of seeing whether closing made concrete business sense. A most important point to consider in the cost benefit analysis would be how much Delta would make in the long run compared with the cost of maintaining the hubs. It is possible that the political leaders around the hubs would express their concerns on economic impacts of closing Delta operations. the company should consider those concerns, but make the final decision depending on long run benefits to Delta.
Also to be considered during cost benefit analysis is the future of the American air transport industry. Indeed, the industry is posed face significant competition when foreign airlines are allowed to ply inter-city routes in the next few years.
Failing to consider the future competitiveness of various routes could lead to closure of hubs that would be important to counter competitors. In order to succeed in this assessment, management of the new airline should consider employing the services of professional consultants who will provide the best analysis and advice. Management would in the end be in a position to develop and implement effective long term strategies. Decisions to close respective hubs should be communicated to stakeholders that would be affected, most importantly the community and suppliers.
Merging and Strengthening Organizational Culture
Merging of two companies should be followed by joining of respective organizational cultures in order to create fresh identity (Black, 2003, p.54) for all to use. The Delta-Northwest merger team should therefore embark on the process of seeing how it could be improved. The first step in this process is to analyze the present organizational cultures and consequently develop ways and means of merging them. Present management in the two companies should thus start with establishing a team that will be tasked with responsibility of this important undertaking. The appointed team should ensure seeking follow employees views regarding the new culture.
Most importantly, employees should be asked on elements of present organizational culture that should be passed into the new airline. It should be understood that keeping employees involved in the process will leave them with an understanding that they are well appreciated by the management. Such encouragement leads to employees increasing their productivity in the new Delta. Getting employees’ views regarding organizational culture is helpful, because they are the ones who have been practicing it while working in the current Delta and Northwest.
Collecting employee views regarding organizational culture should be followed by searching for additional aspects that could be incorporated in the new Delta’s culture. This is best achieved through association with professional consultancy firms that had undertaken such a process before. These professionals should further be provided with the combination of the merging company’s organizational culture, which they should analyze and consequently provide critique.
All these should be done in conjunction with organizational culture development teams of the new Delta. The professionals’ report regarding organizational culture should be presented to the management, who would provide respective views. This should be followed by the actual implementation of the new organizational culture in the entire company.
The new organizational culture development team should ensure providing the labor force with documents containing explanations of the culture. This will help in improving understanding as well as asking for clarifications on unclear issues. In fact, the implementation team should encourage all employees or departmental representatives to express their comments before the actual implementation takes place. Members of staff should on their part feel obliged to express themselves fully lest they get themselves into corporate culture they do not agree with.
Implementing the new organizational culture after this elaborative process is most likely to be easy for the new Delta Airlines, main reason being that employees would be involved in various stages of implementation. Implementation should not mark the end of the team involved inn the process nor th use of professional consultants. Both groups should make a point of monitoring the progress of practicing culture in the organization. Such steps should be undertaken on regular basis through observation and and questionnaires to employees.
All the aspects of the new organizational culture, including its effects should be investigated. the involvement of employees in all these process would lead to higher collaboration during regular surveys, and therefore improve effectiveness. The collection of data should be followed by elaborative analysis that helps in making decisions on which aspects of culture to be retained and enhanced. Undertaking all these processes lead enhances the new company’s ability to achieve short term and long term goal. The process also helps in the process of motivating employees to improving productivity in their day to day operations in the new airline company.
References
Bartle, J. (2006). Developments if American Air Transport Sector. Management Process. 10 (3): 200-230.
Black, R. (2003). Organizational Culture. London: Universal.
Gotts, A. (2001). Merger Review Process. Chicago: ABA.
Parks, J. (2008). Northwest-Delta Anilines Merger. Web.
Zajac, E. (2006). Political Economy of Fairness. Cambridge: MIT.
In today’s rapidly developing world, companies should consistently change to meet customer requirements and remain competitive in the market. Mergers and acquisitions are often aimed to make a product or service more effective and useful for customers. In the given case study, Holiday Seekers Travel Agency and Small World Travel Agency are expected to merge, integrating the experience and strengths of both organizations.
The former is a large company with 50 branches, offering traditional travel services, and the latter is a small online company. This report discusses the impact of the merger and creation of the new Broaden Your Horizons company, including leadership, culture, communication, and sustainability issues to ensure that change will be implemented successfully.
Potential Impact of Change
To prepare the identified organizations for change, it is important to anticipate how the stakeholders will perceive this move, including investors, partners, employees, and customers. First, in analyzing the effectiveness of the companies’ merger, it is appropriate to evaluate the possible reaction of investors. Some may consider such a merger to be risky and unstable in the long term, which is likely to lead to reduced or a complete lack of cooperation (Cameron & Green 2015).
In this case, a detailed merger plan with a focus on the time frame and specific stages can be useful to convince investors to continue working together. Second, for partners—including hotels, airlines, transportation companies, and local tour organizations—the potential impact appears to be positive as they would have an opportunity to attract more customers. Because two companies will merge, their client base will increase, and profits are likely to grow significantly.
Employees comprise the most important category of stakeholders who will potentially be shocked, frustrated or even depressed by the upcoming change. The plan to decrease the number of branches implies that some employees will be affected by downsizing. Among the staff members in both companies, while some may have different reasons for not noticing the changes, a large number will experience professional dissatisfaction with the new working conditions.
The situation promises to be especially threatening to Holiday Seekers Travel Agency employees; the internal environment among personnel can be tense when people are waiting for rightsizing and dismissals. A high level of personal anxiety, generally affecting the psychological climate, can be expected. In their turn, the employees of Small World Travel Agency are likely to perceive the changes more calmly, taking them for granted or perhaps misunderstanding the reorganization. Therefore, the management and the personnel department should occupy a key position in developing the change plan.
Change stages are usually observed in the process of merging, including shock, defensive retreat, acknowledgment, and adaptation to change. Accordingly, a similar situation should be expected in this case: employees would follow stages illustrated by no risk-taking, anger, mourning, and finally, comfort with change (Cameron & Green 2015). The change managers assigned to implement the required merger should assist employees in passing through transitional stages.
The first stage, ending, should ensure that disidentification is expressed through letting the situation go. The second stage, the neutral zone, encourages considering the change from different perspectives and finding advantages as well as building energy for new conditions. The last stage, new beginnings, implies aligning a company’s vision with the opportunities that occur. Thus, change managers should accompany employees throughout the mentioned stages. Once the change has been planned, personnel evaluation should be conducted to identify talented and qualified employees.
Successfully applied in practice, staff assessment in terms of restructuration can create a favorable atmosphere in the creation of a new company. The purpose of staff assessment is to determine the current professional level along with personal and motivational characteristics as well as the potential of employees to perform tasks that will advance the company’s strategic development. Personnel assessment should be carried out at all stages, including planning, training, remuneration, and providing motivational incentives (Cameron & Green 2015).
Incurring minimal time and costs, this technique makes it possible to effectively assess the degree of an employee’s compliance with both individual goals and the overall nature of the company’s work. Such a strategy will allow making necessary dismissals and leaving only qualified employees who are committed to their work.
The customers who make up the target audience of the Broaden Your Horizons company are likely to perceive the merger in a positive light since they will be offered new options for booking, directions, and travel plans. Younger clients will definitely benefit from these opportunities, while people who do not use the Internet often may be confused to some extent. To clarify the situation and preserve customer loyalty, it is vital to explain to consumers that both traditional and online options will be available for their convenience.
Leadership Issues
Based on case study details specifying the need to retain only one of the CEOs, it seems rational to assign a leadership role to an outside change sponsor who will be able to make objective decisions by taking into account the new company’s goals and current issues (Hornstein 2015). This individual will not control the day-to-day processes but will focus on identifying change stages, monitoring progress, and making adjustments as necessary. Strategy, resources, and communications should be led by the selected change sponsor.
A change manager and several change agents should be chosen from among the senior and junior management of both companies to guide daily processes (Hornstein 2015). In addition, a change team should be created from employees having authority among both management and staff. These team members will act as role models; therefore, they should be selected properly and in a timely manner.
Considering that this case study presents a complicated situation, it is important to combine several leadership styles: in particular, transformational and visionary. A visionary leader pushes people toward a common vision since the point is not how to achieve the goal but to make the team understand the direction of the targeted change. According to Jick and Peiperl (2006), this style is best suited to seeking a new direction for a company’s development. In applying the role of a visionary leader, the change sponsor should vividly and vibrantly describe the goal of the project team or the entire organization to motivate and inspire employees.
I recommend that this individual should understand that new ideas and innovations can arise suddenly. Therefore, the leader should look for sources of new information, opportunities, and improvements, thus promoting this idea in both organizations. The main characteristic of one of these leaders is empathy, which implies that methods, steps, and processes of leadership are accomplished only through assistance and openness to people (Hornstein 2015).
Most great and successful leaders have aspects of a particular vision. However, many companies do not have a mission or, at least, clearly formulated goals, which leads to employees feeling unmotivated. The advantage of the visionary leadership style is that it allows employees to search for new ways to solve problems and experiment with new ideas. Because failures are acceptable, employees can feel comfortable trying new approaches without the fear of being dismissed for making mistakes.
The first stages of the merger should be performed accompanied by a close review of existing values and goals, which is most relevant in terms of visionary leadership. However, further stages are likely to require more activity on the part of employees as well as their greater engagement in the new company’s affairs. In this regard, Tyssen, Wald, and Spieth (2014, p. 5) state that “transformational leadership is especially effective in projects with a high degree of novelty.”
I agree with these authors because transformational leadership focuses on changes in organizations, groups, and even people themselves. Transformational leaders motivate others to do more than they originally intended and, sometimes, even more than they thought possible. They should form a high set of expectations and manage to achieve more impressive performance and efficiency.
Most importantly, transformational leadership is distinguished by more dedicated and satisfied employees because such leaders empower their subordinates to act as leaders. Accordingly, employees are to be given relative freedom so that they can independently control their activities within delineated boundaries. They should be involved in the problem-solving process and learn new ways of working, thus contributing to increased productivity. Transformational leadership translates the needs of employees from a lower physiological level such as safety and reliability to a higher level, focusing on self-esteem and realization of potential (Tyssen, Wald & Spieth, 2014).
An important point is that lower-level needs should be met by means of decent wages and good working conditions. However, the transformational leader should also provide opportunities for individual growth and development for every employee. In this case, the leader will be expected to distribute tasks in such a manner as to raise employees’ skills and relate them to corporate goals, involving the workers in the change process.
Culture
Organizational culture is one of the most important aspects of a company, primarily determining what makes it different from others. The culture is promoted to one of the first places in management as it allows achieving employee commitment and effective production (Hickman & Silva 2018). The paramount task in shaping and maintaining culture is to support changes that are occurring in the company. Culture defines the basic values, norms of behavior, ideas, and attitudes that are to be shared by all members of the organization. At the same time, culture manifests itself in the policies and rules that determine the functioning of the organization and behavior of its employees and management as well as their perception of both the internal and the external environment.
The merger of two companies requires paying attention to the culture of each to ensure that employees will feel comfortable. The best solution is to integrate the two cultures based on developmental needs and employee preferences (Hickman & Silva 2018).
Obviously, some values will be reinvented, while others will be rejected as outdated. Since the change is largely affected by the forces of globalization that are bringing people closer and promoting an increased speed of life, it will also be necessary for the consolidated culture to adjust to these aspects of the business. In particular, travel agencies are becoming more customer-focused in their attempts to meet and even anticipate their clients’ requirements. For example, online services can provide customers with the most comfortable conditions to book a hotel or purchase a tour to the Bahamas. These issues should be kept in mind while preparing the culture for change.
The new company’s management should take an interest in the perception and acceptance of organizational culture by all employees, who should be aware of and accept the business’s mission, goals, norms, and traditions. Maintaining organizational culture in the process of implementing basic management functions is essential (Hickman & Silva 2018). Support or suppression of the behavior of personnel under established management practice exerts a significant influence on the organizational culture. The extent to which leadership encourages autonomy and initiative on the part of employees also matters.
Culture preparation implies that a leader is sufficiently competent to communicate with employees and management, delegate tasks, and resolve conflicts. The concept of emotional intelligence (EQ) offers an important topic of discussion as a way to clarify how empathy determines culture change. According to Goleman, EQ is the ability to be aware of others’ emotions and of the self in order to motivate and manage emotions when interacting with others (cited in Batool 2013).
Several of the components of this characteristic include self-awareness, self-regulation, empathy, social skill, and motivation. All communications point to the need to work with emotions. Even though emotional intelligence can be difficult to pinpoint, five main areas are involved. The change sponsor responsible for the merger should be conscious of his or her emotions, able to manage them effectively, capable of motivating self and others, and have the capacity to recognize other people’s emotions and to maintain relationships.
Practical recommendations for change agents might include organizing training for employees with the purpose of increasing their ability to fulfill the mission of the organization. In addition, collaborative exercises will enhance team cohesion and develop a meaningful approach to the work of each participant. In particular, training will boost the level of communication skills of employees, develop a positive attitude to change, and resolve organizational challenges as required. Change champions may be rewarded based on their performance, showing other employees that a proactive position toward change is valued by the company and that it leads to opportunities for professional development.
Change Model Identification
Since the combination of visionary and transformational leadership styles has been proposed, I suggest using Kotter’s eight-step model. According to this model, the best way to impress people is a clear demonstration of the problem. It is necessary to evoke emotions and feelings in employees so that they want to change; only then will the transformation be qualitative and successful (Cameron & Green 2015).
The first step implies creating an atmosphere of prompt action by examining the market situation, the company’s competitive position, real and potential crises, and favorable opportunities. The merger requires considering these issues for both companies, resulting in a focus on their common future. The second step is to form influential teams of reformers by way of combining the efforts of authoritative employees and agents of change who will encourage the activities of others. This team should be proactive, competent, and respected by the majority of employees to allow maintenance and growth of trust.
The third step is to create a vision: an image of the desired future in order to increase employee engagement. The change sponsor and managers are responsible for developing a strategy for achieving the vision. In this case, I recommend selecting a normative re-educative strategy that allows redefining values and cultural norms and ensuring commitment to new ones (Cameron & Green 2015). The fourth step states that a new vision should be promoted, using the availability of presentation, analogies, and examples of models by the team of new reformers. Next, it is necessary to shape conditions for the implementation of a new vision in life.
This part of the process can be performed by eliminating obstacles blocking new behavior, changing structures and responsibilities contrary to the new vision, and encouraging creativity and willingness to take risks. In the sixth step, the leaders should achieve immediate results through planning the required first steps as well as rewarding and promoting initial successes.
Consolidation of achievements and expanded transformations are noted among the goals of the seventh step. An atmosphere of trust in the new approach is likely to contribute to spreading successful experiences throughout the organization. Ultimately, the institutionalization of a new approach should include formalization of the rules of behavior, building a relationship between results and rewards, and creating conditions for the development of new qualities in employees. It is important to emphasize that exactly following a specified sequence of steps is unlikely to lead to success because a merger is a complex process.
Instead, Cameron and Green (2015) state that the process of accomplishing a merger should be continuously assessed to implement necessary changes to the model. To consolidate changes in corporate culture, two issues are especially important. The first is a clear demonstration that changes in attitudes, behavior, and thinking have actually improved the company’s work. Given the opportunity to draw their own conclusions, employees may not see the right relationships and may come to erroneous conclusions. To properly evaluate the results achieved, employees need appropriate guidance.
Communication of Change
Change communication is one more area that is vital in implementing a merger. According to Hickman and Silva (2018), proper change communication leads to low resistance and more rapid achievement of change goals. In the course of the restructuring, the existing branches and departments will most likely be transformed; some will merge, others will repurpose or set other tasks before them, and new divisions will appear. To save people, it is important to offer them a way to fit into the new structure. For some employees, this will take a very specific meaning, such as moving to another department or another position. In order not to transfer anyone by force, one recommendation would be to invite employees to choose new positions, causing a merger to be less stressful.
In order to make changes in the company, management may choose to adjust the company’s corporate values. For example, values such as professional flexibility, the desire to comprehend new facets in the profession, the willingness to master an adjacent specialty, or the desire to learn and discover new areas in the profession may be assigned a top priority. As part of the introduction process, leaders and managers should describe desired values, make colorful brochures, and distribute them to employees. In other words, they should prepare related presentation material and convey a consistent message.
All the changes that are expected in the company should be clearly described with the use of diagrams, tables, and infographics. The material should be clear, descriptive, and accessible so that employees may easily draw a picture of what will happen during and after the merger.
Sustainability Issues
Innovation is the process of invading elements of a new culture into existing relationships, presenting a key reason for resistance to change in the implementation of a merger. The main factors in people’s resistance to change are a lack of understanding and trust, differences in the assessment of the situation, and low readiness for change (Hon, Bloom & Crant 2014). In the process of change, individuals often show resistance, which may have the following manifestations: direct sabotage of changes within the organization, delaying the beginning of changes, or the emergence of unforeseen difficulties. Such opposition leads to a slower process and an increase in costs compared to those anticipated in the change plan.
Resistance can be explicit, in the form of open criticism of projects and upcoming auctions, and hidden, accompanied by external agreement with changes. At the first stage, the main problem is to identify and overcome any initial resistance. It is vital to be able to make people adopt the new way of thinking necessary to effect change. Once a merger is implemented, it is critical to ensure that the change is permanent, making it formally and unofficially fixed and reflecting that employees embrace the change and that it has become part of the organization’s culture. The final stage of the change program involves evaluating consequences and effects. However, if goals are carefully defined and the ways to achieve them are clearly described, then assessment is possible.
The method of controlled resistance is an optimal variant that is acceptable in conditions of moderate urgency, but it also can bring a positive effect for a certain period of time. If the need for transformation increases, the method acquires a compulsory nature. Conversely, when management has a reserve of time, the method acquires adaptive features (Hon, Bloom & Crant 2014). When implementing this method, the processes of planning and implementing projects are to be carried out in parallel.
To reduce the level of resistance, top-level managers need to work on such issues as developing a sense of community in terms of goals among staff and create an atmosphere of trust in relations between managers and employees. If possible, a guarantee that change will not lead either to a reduction in staff or a decrease in wages can exert a significant positive influence. From the start, change agents should explain to and discuss with staff the reasons for upcoming changes and try to achieve universal recognition of the need for change. It is necessary to pay attention to the training of managers dealing with frequent negative reactions from employees.
While many managers and leaders may successfully identify and propose strategy implementation, when they encounter ineffective results, they are likely to conclude that a change attempt has failed. In order to remain successful, this merger should adopt the concept of perseverance elaborated by Kanter (cited in Tirmizi & Vogelsang 2017). The management and personnel department should hold regular meetings to resolve conflicts and problems as well as talk with staff about their experiences and any anxiety they may be feeling. In other words, these meetings should take into account negative emotions and experiences in order to solve problems.
It is beneficial to consult with employees on possible options for the implementation of changes, clearly demonstrating that their opinion can influence the course of upcoming events in many respects (Tirmizi & Vogelsang 2017). When forming a joint team, management should notify all staff about new openings in the company, which will facilitate identifying more capable managers interested in the success of the reorganization. Communicating compelling aspirations should be accompanied by building coalitions to engage employees.
Conclusion
In conclusion, this report provides recommendations for a merger between two organizations that will join to create the new Broaden Your Horizons company. As part of the process, leaders and managers should pay attention to the behavior of their subordinates in different situations and evaluate it within the framework of the corporate culture. The merger should be planned in advance, including resources, employee skills and knowledge, potential resistance, and other related issues. It is necessary to conduct additional personnel training to overcome all possible fears of transformation and encourage positive reactions.
It is proposed to develop a clear timetable for the whole process of change to convince stakeholders of the feasibility of the planned change. The integration of visionary and transformational leadership, as well as Kotter’s eight-step model, have been selected as the most appropriate for the given case. Ultimately, employee resistance and change maintenance issues are discussed, based on Kanter’s strategies, along with the need for enhanced communications throughout the new company.
Reference List
Batool, BF 2013, ‘Emotional intelligence and effective leadership’, Journal of Business Studies Quarterly, vol. 4, no. 3, pp. 84-94.
Cameron, E & Green, M 2015, Making sense of change management: a complete guide to the models, tools and techniques of organizational change, 4th edn, Kogan Page, Philadelphia, PA.
Hickman, CR & Silva, MA 2018, Creating excellence: managing corporate culture, strategy, and change in the new age, Routledge, New York, NY.
Hon, AH, Bloom, M & Crant, JM 2014, ‘Overcoming resistance to change and enhancing creative performance’, Journal of Management, vol. 40, no. 3, pp. 919-941.
Hornstein, HA 2015, ‘The integration of project management and organizational change management is now a necessity’, International Journal of Project Management, vol. 33, no. 2, pp. 291-298.
Jick, T & Peiperl, M 2006, Managing change: text and cases, 3rd edn, McGraw-Hill, New York, NY.
Tirmizi, SA & Vogelsang, JD 2017, Leading and managing in the social sector: strategies for advancing human dignity and social justice, Springer, New York, NY.
Tyssen, AK, Wald, A & Spieth, P 2014, ‘The challenge of transactional and transformational leadership in projects’, International Journal of Project Management, vol. 32, no. 3, pp. 365-375.
The head of the benefits team stated that it would take the firm more time to create a new benefits plan than merging the benefits plan of both the companies. Why would creating a new benefit plan take more time? What do you think is a better strategy and Why?
The head of the benefits team has confirmed that the company will take more time to design a new plan. This will happen because the company has many employees. The idea to create a new plan requires new experts and accountants from the two companies. This process might take longer because the team needs to address the needs of every employee. The team will also have to reconsider every new operation and activity at the company. The team should also make proper decisions depending on the new roles of every employee. The company has doubled its workforce. This explains why “the company will be handling more resources, finances, and employees” (Reddick & Coggburn, 2012, p. 75). The decision to create a new benefits plan will take more time. The decision might also affect the employees’ morale and satisfaction.
The decision to create a new plan might be a good strategy. This approach will ensure the new company identifies the weaknesses and strengths of the current plans. This approach might also affect the company’s performance because the employees might not receive their benefits in a timely manner. This explains why the benefits team should merge the existing two plans. This strategy will ensure the benefits team identifies the strengths of every company’s plan. The new benefits plan will also preserve the organization’s business culture. The benefits team should also “remove every negative aspect of the original plans used by the companies” (Reddick & Coggburn, 2012, p. 64). This decision will also ensure the company conducts its operations in a smooth manner. This situation explains why the head of the benefits team should merge the two plans.
The benefits team has to devise a benefits program that would satisfy the employees of both firms. Suggest some steps for the benefits team to function effectively? Create a sample benefit plan for the new organization.
The benefits team should devise the best benefits program in order to satisfy the expectations of every employee in the new company. The benefits team should also be aware of every legal requirement. This approach will ensure the company offers the best benefits to its employees. Some of the benefits will include “compensation, unemployment, and disability benefits” (Reddick & Coggburn, 2012, p. 85). The team should also provide more benefits in order to motivate the employees. Some of these benefits might include “dental insurance, vacation leave, sick leave, a retirement plan, and health insurance” (Reddick & Coggburn, 2012, p. 98). The benefits team should also work together with the HR department to understand the needs of every employee. The team should also collaborate with every department in order to make the best decisions. This practice will ensure the team addresses the expectations of every employee. The team should also consider every employee’s contributions to the success of the organization. These steps will ensure the benefits team functions effectively. The approach will also make the company a leading provider of quality services to its customers and stakeholders.
Sample Benefits Plan
Every employee will get “a competitive salary and remunerations” (Reddick & Coggburn, 2012, p. 83).
Education Savings Plan: Every employee’s child will get free education from the company.
Maternity Leave: 20 weeks off and regular pay.
Parental Leave: this benefit is for every secondary caregiver.
Employee Referral Program: Our organization will offer bonuses for referrals.
Back-Up Child Care
Adoption assistance: We will help our employees raise every adopted child ($5,000 for legal expenses).
Lunch and Dinner: Every employee will get healthy and delicious foods from the company.
On-Site Doctor: Every employee can see a doctor for immediate medical support and attention.
Reference
Reddick, C., & Coggburn, J. (2012). Handbook of Employee Benefits and Administration. New York: CRC Press.
Mubadala Investment Company is the UAE’s largest investment holding company operating as a sovereign wealth fund. It comprises of several state-owned enterprises, such as the Advanced Technology Investment Company (ATIC), Advanced Microdevices (AMD), and the International Petroleum Investment Company (IPIC) (US-UAE Business Council, 2017). The merger between the former and the latter occurred in January 2017, when the company became a public joint-stock company (PJSC), adopting the new name of Mubadala (US-UAE Business Council, 2017). The company is wholly owned by the government of Abu Dhabi and responds to the UAE’s overarching authority.
Although both ATIC and IPIC were created and operated under the Abu Dhabi government, they were fully independent organizations dedicated to different aspects of investments. The merger meant to unite their financial and operational capacity in order to compete in international markets. However, such a move presented a myriad of issues related to change management. The entire structure of the company had to be reinvented to encompass new employees, transform the decision-making apparatus, and enhance the capacity of the organization to handle larger amounts of finances necessary to operate in the investment markets outside of Abu Dhabi and the UAE.
Change management is a complex process that involves theoretical and practical expertise. An HR manager has to understand the routines and the underlying issues in the context of a large merger such as the one between APIC and Mubadala. A successful resolution to change can make the company stronger and more resilient in the long-term perspective. The purpose of this report is to identify the major changes for Mubadala Investment Company, highlight the purposes of these changes in relation to the significance of the problem, and propose a model for organizational change along with recommendations.
Identification of Change
Existing Situation
Before the merger occurred, the companies operated independently, while a joint committee was established with the purpose of creating a plan for merging and the corresponding changes that were to take place. Presently, both APIC and Mubadala have their separate command and control structures (US-UAE Business Council, 2017). This means there are two directorial boards, two middle manager cores, and two sets of employees, each focused on their respective duties.
The organizations, despite being owned by the same entity, do not maintain a connection and information exchange. A customer seeking investments in technology is not directed from APIC to Mubadala, just as one seeking to operate in oil exchanges is not referred by Mubadala to APIC in return. Likewise, a client wishing to deal in petroleum and technology at the same time will have to separately address both companies. This creates a discrepancy, which leads to a loss of money and business opportunities since many international players would rather deal with entities that provide the whole package.
Another issue that arises from separation is a different set of practices, standards, and documents, which may not always correlate well with one another (US-UAE Business Council, 2017). As a result, it is more difficult to cooperate between the companies even if they have the interests of a shared client in mind. Lastly, each individual company is having issues entering the international market and pursuing opportunities outside of their area of expertise. Mubadala does not have specialists, contacts, and the infrastructure to enter the petroleum investment market, whereas IPIC cannot venture towards the technological market without significant expenditures. The proposed change is meant to answer all of these issues and is further elaborated on in the section below.
Reasons for Change
There are numerous financial, organizational, and political reasons underlying the merger between APIC and Mubadala. The main shareholder for both companies is the Abu Dhabi government, meaning that both organizations, while separate, operate under the same owner (Emirates NBD, 2016). From this perspective, the integration of two entities has the potential to create greater economic value for the government.
This merger will help the companies realize their synergies while diversifying their products to encompass a great array of potential ventures, including energy, utilities, technology, aerospace, manufacturing, healthcare, real estate, and financial investment sectors (Emirates NBD, 2016). It will also encourage foreign companies to come to Abu Dhabi in order to establish offices and production facilities, which is in line with the country’s long-term economic development plan. An additional rationale for the merger is as follows (Emirates NBD, 2016):
Bondholder perspective. Since the commanding package of bonds is owned by the Abu Dhabi government, the decision will have little to no unintended and unperceived consequences for the majority of bondholders. The decision was planned a few years ahead, and the venture has explicit support from the UAE.
Credit rating. The merger will not have any negative consequences for the company’s credit rating, since both ATIC and Mubadala have approximately the same rating, being AA/Stable by Standards & Poor’s and Aa2/Negative from Moody’s. The credit quality of Mubadala is slightly better than that of IPIC (BB+ versus BB-), however, from a cash flow perspective, IPIC has been historically more successful in attracting larger investments and providing a more positive cashflow. Because of the merger, the final credit rating is likely to grow both by S&P’s and Moody’s standards.
Operating cash flow matters. Due to the high attractiveness of the oil sector in the Middle East, IPIC is known for generating large amounts of operating cash flow, that being of circa 3-5 billion USD per year, which exceeds its average capital expenditures by 1-2 billion. Mubadala, on the other hand, has been operating under a deficit budget for the past several years, generating a 1-2 billion cashflow with 3-5 billion in capital expenditures. The government had to deal with Mubadala by injecting additional capital in order to bail it out of debt. By merging two companies together, IPIC’s positive cashflow will counteract Mubadala’s funding needs.
Stock trading. As it stands, IPIC’s bonds and stocks trade slightly better than those of Mubadala’s. It is expected that the merger will spread the convergence to all bonds in equal measure.
Finally, there is a political reason for performing the merger, associated with Khadem Al-Qubaisi, the ex-managing director of IPIC. His name is connected to a major scandal over IPIC’s 1MDB offshore money laundering affair (Hope & Wright, 2019). Currently, he is arrested and pending trial, but the relation of IPIC funds to the Malaysian laundering scheme threatened to hurt IPIC’s good name and standing, which is critical for a company trying to compete in international markets. The merger, thus, is seen as a way for IPIC to avoid this risk and improve its overall reputation.
As it is possible to see, all of the reasons for merging companies are valid and have the potential to improve the standing of the company and its bondholders in medium to long-term perspectives. It will have a marginally positive effect on the merged organization’s credit rating, provide compensation for deficit cashflow in one of the branches, and offer a greater pool of resources and products to offer to the market.
Identification, Proposition and the Significance of the Change
The major change to occur between IPIC and Mubadala is identified as the merger of two large companies with multibillion assets and operating cash flows into a singular entity. It is a massive endeavor that will involve thousands of employees and large sums of money in order to succeed and create a united company capable of competing in international markets. A mere alliance between these companies while keeping their respective entities and existing command structures is impossible due to various financial and organizational difficulties.
The significance of the proposed changes cannot be overstated, as it would create the largest financial and investment company to exist in all of the UAE, with the potential to compete in the Middle Eastern and international markets. Mubadala Investment Company’s global footprint expanded twice since the merger by combining assets, thus reaching the petroleum and technological markets in North America, South America, Africa, Europe, Asia, and Australia, effectively making it a global entity (US-UAE Business Council, 2017). In addition, the amount of operating cash flow for Mubadala increased from 1-2 billion to nearly 5 billion, greatly expanding its capabilities to conduct profitable large-scale investments (Emirates NBD, 2016).
Applying Theoretical Concepts of Change
Dynamics and Barriers to Change
The merger analyzed in this paper is a significant organizational and financial event, during which two companies engaged in a negotiation that resulted in the process of merging both “companies with different values, cultures, and forces into one cohesive unit” (Kansal & Chandani, 2014, p. 209). The process of change during mergers is not easy due to the sheer scope of it. Kansal and Chandani (2014) identify numerous factors that affect the dynamics of a newly-formed organization, which are as follows:
System dynamics. The organizations in question have to face the prospect of merging not only their assets but also their technological, legal, and accounting systems, in order to facilitate the uniformity of transferred information.
Structure dynamics. Large organizations that are created as a result of mergers are notoriously more difficult to control. A standard hierarchical structure carried on from the previous individual hosts may not be applicable here. Some of the solutions to this problem include decentralization and downsizing.
HR dynamics. One of the purposes of change is to enhance employee performance and competencies. At the same time, changes often induce negative short-term dynamics due to the issues of redefining organization goals, vision, mission, and strategy, as well as recruitment and selection processes, employee training, benefits, and development.
Profitability dynamics. Changes invariantly result either in the increase or decrease of revenues, market share, productivity, and engagement processes as an effect of restructuring and reengineering the organizational setup.
Government policy dynamics. Depending on the country where the merger is registered, different policies may either enhance or hinder the performance of the organization.
These dynamics are closely related to various barriers to change, which are in one way or another related to human resource management. The performance of an organization is defined by the capability of the personnel to adjust, cope, and accept change. Resistance to modifications is the primary HR-related problem, as many employees may not understand the purposes and practicality of change in broad and particular perspectives (Appelbaum, Karelis, Le Henaff, & McLaughlin, 2017). Since mergers are often associated with significant changes in the command structure as well as layoffs, employees have every reason to be concerned about their future employment, which could result in resistance and sabotage (Appelbaum et al., 2017).
Force of habit and fear of the unknown also present a significant barrier to change, since individuals are more likely to fall back on their well-developed professional habits rather than operate using new systems, even if these systems are potentially more effective in the long run. Finally, there is an issue of a lack of competencies and proper support. Mergers and acquisitions typically involve some of employee functionality being either reduced or eliminated, while adding new duties and requirements at the same time (Appelbaum et al., 2017). The standards of quality of labor might be increased as well. Without proper training and support, individual productivity may fall dramatically, as employees will struggle to meet new demands to their labor.
In order to minimize the negative effect of these barriers and pay attention to various dynamics of change, an appropriate change framework is required. A lack of a systemic approach to a major event in the company’s history has the potential to significantly offset the goals and reasons for the change. The following section will propose a model for organizational change and provide recommendations in the scope of IPIC and Mubadala merger.
Kurt Levin’s Theory
Kurt Levin’s model of change acceptance involves three distinctive stages: unfreezing, transition, and refreezing. The unfreezing stage involves the gradual dismantling of the existing organizational practices, command structures, behaviors, and attitudes (Klev & Levin, 2016). Before any change is to occur, a place must be made for it, both figuratively and literally, in the minds of the employees that are to undergo such changes.
The transition stage, also referred to as the learning stage, involves the introduction of new practices, behaviors, and systems to take the place of the old ones. Desirable habits are formed at this stage, as it defines the future functionality of the organization (Klev & Levin, 2016). At this stage, alterations and changes from the initially planned model are possible, based on feedback and usability of systems in practice. Finally, there is the refreezing stage, which solidifies the practices developed and learned during the transition stage as new organizational standards (Klev & Levin, 2016).
There are several theories that operate within this framework, with different goals, effects, and results. Theory E, for example, is a change theory focused on maximizing shareholder value (Risberg, King, & Meglio, 2015).
It promotes the implementation of change through the top-down approach, with the construction of new systems and fitting employees into it. Such a system is transaction-based and seeks to minimize the potential costs of implementation by structuring and speeding up the process (Risberg et al., 2015). Due to its hierarchical nature, Theory E was popular in the late 20th century, with some of the examples of success including General Electric under J. Welch and IBM under L. Gerstner, who used this theory extensively during mergers and acquisitions.
The alternative to a centralized, top-down approach is Theory O, which focuses on developing organizational capabilities and places more inherent value in the human capital (Coccia, 2018). It is a bottom-up model that encourages employee participation, the creation of a new corporate culture, and the support of bottom-driven initiatives and solutions to problems (Coccia, 2018). Although this type of change requires more time to succeed, the result is more organic and committed. The examples of a bottom-up change process include Microsoft, Intel, and other creativity-based mergers.
Discussion and Recommendations
The purpose of the change is to enable two government-owned companies to form a new collective identity as a result of the merger. The reasons for the merger, as outlined in the sections above, include improving the financial standing of the new company and empower it to claim a greater market share while diversifying its portfolio of services and products. These goals must be kept in mind when devising a change program for the organization.
The government is the primary shareholder and beneficiary of the companies, meaning that its interests are prevalent when determining the model of change. Since both IPIC and Mubadala are hierarchical government-funded organizations, Theory E is an appropriate solution for merging. The recommended merger and acquisition change strategy is comprised of the following steps:
Forming an integration plan. The first step of any change venture should involve creating a special project team of senior executives from both organizations, who would be in charge of creating implementation and strategic plans (Van Dick, Ciampa, & Liang, 2018). At this stage, it is also recommended to inform the employees about the planned merger. This measure will help them prepare and internalize the upcoming process while eliminating the potential for disinformation and gossip. The inclusion of members from both organizations will help facilitate communication between IPIC and Mubadala since the executives would be the experts in the affairs of their respective companies.
Having a clear vision. Without understanding how the company is planning to position itself in the future, it is impossible to create a strategy to accommodate this goal. The vision step includes the company’s new goals, values, and policies that are to be communicated to employees.
Cultural differences. The executives must analyze the core cultural values and differences of IPIC and Mubadala in order to create a new corporate culture based on similarities of both systems, in lieu of the companies’ visions and goals (Hickman & Silva, 2018). Since changes in corporate culture will affect employees the most, it is paramount that some key components should be retained in order to ease the transition. In order to understand differences in culture, the executives must keep in constant touch with their employees. Specific studies and surveys might be necessary to understand the differences in cultures as well as ways that might be appropriate to create a new one.
Employee involvement. IPIC and Mubadala should encourage their employees to visit and learn the other organization prior to merging. This will create bonds between the organizations on an interpersonal level, will allow them to explore shared values, and facilitate an easier transition into a merged company. This part of change should focus on building trust and sharing the knowledge of systems, tools, finances, and budgeting (Hickman & Silva, 2018).
Customer focus. In IPIC and Mubadala’s cases, the companies must make certain that the quality and availability of their services and products go up as a result of the merger (Kansal & Chandani, 2014). It is expected that the increased variety of investment opportunities is going to improve customer experience, while the new corporate structure will address and eliminate the potential existing problems, such as Mubadala’s debts and IPIC’s proneness to corruption.
HR restructuring. The merger between Mubadala and IPIC is likely to eliminate certain positions while creating new ones. It will also bring about changes to the existing compensational packages and skill level requirements. Layoffs may be necessary to trim the organization and optimize its personnel, whereas certain employees will have to be retrained to include additional functional knowledge of either the technological or the petroleum spheres of influence (Kansal & Chandani, 2014).
Finalizing changes. The key goals in the HR change strategy include the retention of good employees, maintaining key functionality, and removing any elements that are refusing to accept the future of the company (Dirva & Radulescu, 2018). Once that is done, and the changes are complete, it is important to refreeze the system and allow new practices to become standardized and widely used throughout the organization.
Based on the information available about Mubadala Investment Company, the first step of the proposed framework is already underway, as the company formed a special commission in order to investigate the parameters and opportunities for change. This paper sustains that Theory E and Kurt Levin’s Theory are appropriate to be used in large mergers such as this one. The proposed solutions are subject to alterations in order to accommodate the company’s needs better and to address pertinent HR-related challenges, should they arise. Alternative change theories addressing the same issues as Kurt Levin’s theory might also be substituted to achieve the organizational goals outlined at the beginning. Overall, it could be concluded that the merger in question has considerable potential, and its realization depends mostly on the organization’s ability to handle change.
References
Appelbaum, S. H., Karelis, C., Le Henaff, A., & McLaughlin, B. (2017). Resistance to change in the case of mergers and acquisitions: Part 3. Industrial and Commercial Training, 49(3), 146-150.
Coccia, M. (2018). An introduction to the theories of institutional change. Journal of Economics Library, 5(4), 337-344.
Dirva, C., & Radulescu, A. S. (2018). Managing resilience to change in merger and acquisitions. Romanian Economic Journal, 20(68), 145-160.
Emirates NBD. (2016). Mubadala-IPIC merger. Web.
Hickman, C. R., & Silva, M. A. (2018). Creating excellence: Managing corporate culture, strategy, and change in the new age. New York, NY: Routledge.
Forty years of business cooperation unite the companies Lester electronics and Shang-Wa Electronics, who worked under a common agreement of one million-dollar minimum wholesale, leading to a lucrative relationship of the partners. As a result, the companies decided to join their forces for maximizing shareholder value.
The principal goal of Lester Electronics is aimed at merging with Shang-Wa Electronics, being the long-time supplier of the company. The paper will be focused on the key concepts helping in financial problem solutions. It should be noted that financial and defense aspects will be covered through the determination of basic strengths, risks and solutions to be followed.
Current Financial Situation of the Companies
Industrial electronics company Lester Electronics is considered to be a huge distributor of original equipment manufacturers in the USA and whole Europe. It is necessary to underline the fact that the company makes about $500 million annually. Nevertheless, the primary markets of the company are small, and cover regional consumers; so, the enterprise signed an agreement with Shang-Wa Electronics, being the manufacturer of electronic components.
Shang-Wa Electronics is considered to be a Korean producer of electric techniques; the company managed to build a well-respected business and became competitive manufacture in the country. The financial agreement, being annually renewed, appeared to be rather beneficial for both companies; nevertheless, the idea of merging can result in financial stabilization and expansion..
Strengths and Financial Alternative Solutions
The Lester electronics and Shang-Wa merging will lead to competitive advantage through relating value to the financial planning process, during the usage of optimal budgeting techniques for the purpose of closing the gap between implementing alignment and cash disbursements. The fact is that the balance between profitability and growth will be set up in the case of the company’s investment capital allocation to value-added planning. Appropriate financing methods development will allow Mr. Lester and Mr. Lin to produce wise investment decisions and expand the project’s wealth.
It is necessary to outline the principle challenges that will be faced by Lester Electronics in case of merging.
The selection of the most appropriate and optimal financing option leading to the highest NVR;
The quantification of the value added by the merger to Shang-Wa and Lester electronics;
The achievement of a ‘buy-in’ agreement from Shang-Wa Electronics.
Financial regulations of Lester Electronics will be reached through the company’s opportunity to make use of financial leverage as the basic growth tool; besides, there is a chance to determine the Capital Weighted Average Cost as the principle tool on the way of understanding options’ real NPV (Lester Electronics Inc. and Shang-Wa Financing Solution, 2008).
In order to make the most beneficial solution to a problem, it is necessary to identify key financing instruments resulting in the lowest average capital cost with the greatest NPV. The basic goals of financial planning of Lester Electronics will be concentrated on the following steps:
To acquire 100% of Shang-Wa in the running year period;
To make use of debt for the purpose of 20% NPV growth achievement.
One of the basic steps for the finalization of the merger is based on the agreement of the bid price; it is possible through Shang-Wa valuation, covering such aspects, as company assets, taxes, earnings, and the contributions of the shareholders. It should be stated that merging will be fulfilled by the companies’ representatives; besides, the investors will participate in the future dividends and merger propositions till Lester electronics can buy back the stock. Nevertheless, newly issued stocks will lead to the lowering of the current one; and despite this fact, Lester electronics’ failure to finance the required money will become the principal reason for new stocks creation.
In case of corporation’s merge, one of the companies is considered to be a surviving one; in business acquiring the surviving corporation remains functioning, and the acquired one never does. So, as a result, the surviving corporation gets all the interests to property and real estate, as well as the rights and title without impairment. This step is considered to be beneficial for Lester electronics. One of the problem solutions can be based on partnership formation where the losses and profits of business operations are shared between the owners. In the case of Lester Electronics and Shang-Wa, the silent partnership would be the most appropriate as it is uninvolved in the company management (Bassi, 2008).
One more beneficial step is focused on the idea of Shang-Wa’s reorganization of sales and financial personnel interest in order to include diversifying into capacitors distributing from the company without the involvement of Lester Electronics. Besides, there is a possibility of reverse merger direction with Shang-Wa acquiring Lester Electronics, though in this case, the firm would not get financial benefits as Shang-Wa can become the surviving company.
Lester Electronics can reorganize the internal structure of the company to include internet exclusive commerce lowering duality need and profit ratio on the basis of strong capital budgeting. It is necessary to underline the fact that global business creation without multi-facilities will considerably contribute to maximizing shareholder wealth. Such aspects, as additional stock issuing, personnel training, and specialized data systems acquiring should be compulsorily reached for the problem regulation.
The analyzed financial ways out of the problem allow seeing the methods of maximizing the shareholder wealth, making the company competitive, and manufacturing new products for distribution. The usage of diversifying techniques and reorganization of the company’s internal structure will contribute to the financial expansion of Lester Electronics. In order to succeed in the industrial capacitor market and global consumer, Lester Electronics is to develop an appropriate implementation plan focusing on Shang-Wa Electronics merging and maximizing the shareholder wealth.
End-state Vision
The company will accomplish several goals merging with Shang-Wa Electronics; one of the steps to be reached is to preserve the longevity and competitiveness of the firm. The operations will force Lester Electronics to finance the acquisition through a number of strategies, keeping fixed stock prices; besides, it can defend the company from going into debt causing it to struggle financially. Shang-Wa acquisition will contribute to the required supply of capacitors stimulating for further production; this step will lead to newly manufactured products and high demand (Kimmel, P., Weygandt, J. Kieso, & Donald E., 2007).
Following the steps of the implementation plan will result in the fulfillment of the company’s principal financial aims. It is necessary to underline the fact that reached goals will bring longevity, competitiveness, and profit increase to Lester electronics; the maximization of shareholder wealth will be provided through financial stability and international competitiveness of the company.
References
Bassi, S. (2008). Lester electronics – Maximizing Shareholder Wealth. Business and Finance.
Kimmel, P., Weygandt, J. Kieso, & Donald E. (2007). Financial Accounting: Tools for Business Decision Making. 4th edition. John Wiley and sons. New Jersey.
Lester Electronics Inc and Shang-Wa Financing Solution. (2008). University of Phoenix. MBA-540 material.
As you all know, our company is in the process of acquiring Enviro Tech as a strategy to attain a high competitive advantage in the market. This will enable our firm to be able to compete effectively in the global market because the cleaning industry has become very competitive in the recent past. Through the merger, there will be the creation of a synergistic effect in the course of the firm’s operation. In addition, our company will be able to increase its customer base. This is due to the fact that the firm will be able to venture into new markets. In addition, the employees’ level of knowledge will be improved. The effect is that there will be an increase in the productivity of the firms’ employees.
As managers, we need to appreciate the changes that are occurring in the global business environment and integrate them into our operations. This means that we are supposed to play a significant role in managing the intended change within the organization. It is our responsibility to assure the employees that the merger will not have negative impacts on the organization and hence they should not be afraid of anything. It should be understood that the position we hold as managers is that of a role model. This means that the employees will be looking at us to identify our perception of the intended merger. All supervisory managers should ensure that they guide the operational level employees in understanding the merger effectively. This is due to the fact that the employees will demand a comprehensive knowledge of the direction that the organization is taking. Communicating to the employees will enable the employees to perceive that they are considered in the merger. To achieve this, it is important that all the supervisory managers adapt to the changes in time. This will ensure that they are efficient in making the employees understand the change.
Considering the fact that there is a direct interaction between the first-level managers and the employees, there is a high probability of them affecting the employees’ productivity. All the first-level managers must demonstrate fairness in relating with the employees of the two firms. This will enable them to have an effective transition into the new firm. This is due to the fact that the employees will be under enormous pressure during the transition phase. The effect is that the firm will be able to minimize the rate of employee turnover due to poor relations with the first-level managers. In addition, all the supervisors should ensure that the employees have an opportunity to learn new sales techniques within the new firm. Supervisors should continue encouraging positive employee behavior in the workplace. This will help in keeping the morale of the employees high. If we promote negative employee behavior, the overall productivity of the organization will be negatively affected. In addition, it can also result in increased employee turnover since the employees will not feel satisfied in the organization. As supervisors, we should ensure that there is open communication and honesty between the management and the employees. I request all the supervisors to encourage the employees during the process of the merger, be good role models by leading as examples. This will help in the creation of a positive and fruitful work environment.
It is also required that the first-level managers give rewards to the employees for accomplishments attained. The reward system should be in accordance with the organization’s guidelines which are in line with the employment law. A comprehensive staff review should be conducted by the managers to determine the level of productivity and efficiency amongst the employees. Rewarding employees should be free from any form of discrimination be it based on origin, religion, ethnicity, age, gender, or seniority in the work environment. Discrimination in the process of rewarding employees will not be tolerated. The supervisor should ensure that the process of assessing employees is based on facts and not hearsay. This is in line with employment law which demands that employee appraisal should be based on his or her job performance.
In the process of the merger, it is evident that the firm will be involved in a working environment that is characterized by diverse needs. As the leaders of the organization, we are prepared to face challenges. This is evident from the fact that the organization will be composed of individuals with diverse beliefs, personalities, and cultures. To ensure that there is harmony in the working environment, we should respect one another and treat everyone with sincerity. The supervisors are required to inculcate a culture of positive relationships amongst the employees. This will enable the employees to appreciate the importance of diversity in attaining long-term organizational goals.
In closing, we expect to integrate the best working practices between InterClean’s and EnviroTech’s human resources. During the entire process of the merger, we must motivate the various teams to embrace the change. In addition, we should ensure that we create an environment that will enable the merger to be successful.
Sales Manager
Reference
Cary, C.L. (1995) Managing mergers, acquisitions and strategic alliances: integrating people and cultures. London, UK: Butterworth Heinemann. Web.
Michael, A & Helen, M.(2007). Reward management: a handbook of remuneration strategy and practice. London: Kogan Page Limited. Web.
Wayne C. (2005). Managing human resources. New York: McGraw-Hill Companies. Web.
