Inefficient Management Theory And HR Integration In Merged Company: An Essay.

Conflicting values and Inefficient Management Theory

Discuss about the Concept Of Inefficient Management Theory.

From the case scenario, it has been observed that one of the union officials of the company are not satisfied with the outline of the proposal where it is clearly mentioned that employees would be given modest payment. They will receive flexi-work timing, better accommodation and they will get travel arrangement. This is an instance of conflicting values. The rejection of this proposal showcases the fact that managers are facing problems to integrate the values of union officials with that of the union officials. As per the concept of Inefficient Management theory, it has been observed that the managers are not at all competent. In other words, it can be stated that the business firm is not giving their best performance.

According to the concept of Schermerhorn et al., (2014), some business firm functions below the potentiality thereby lowering their efficiency (McNeil, Frey & Embrechts, 2015). These companies become more vulnerable when it comes to merger and acquisition. From the case study, it has been noticed that managers are facing issues in maintaining equity when it comes to hire and pay the top-performer thereby violating the company’s values.  In according to James et al., (2014) culture is considered as a dominant factor, which prevents fruitful integration. On the other hand, Hill, Jones, & Schilling (2014)) asserted that taking timely decisions as well as operating fruitfully becomes difficult for the managers after the implementation of merger and acquisition within the working process.

From the perspective of Bartlett & Beamish (2018), workforce retention might be a challenge for the  management after implication of mergers and acquisitions.  From the case scenario, employees are feeling confused because they do not know who is the charge of the company after the companies namely Dewaal Pharmaceuticals and Biohealth Labs. It has been observed that sometimes employees become disappointed towards the company’s management after merger and acquisition takes place. These employees are disappointed because they are scared of losing their job. They are not sure about the future of business firm’s direction and they are also confused due to absence of communication. On the other hand, Walker & Walker (2016) they often feel that they might not be treated fairly by the company after merger and acquisition takes place within the working process of the respective merger and acquisition. It is seen when merger and acquisition takes place within the working procedures of the companies, skilled as well as managerial section are usually left in dark (Laudon & Laudon, 2016). Fear as well as absence of answers deters the top-level managers of the company from offering information that workforce requires to redirect activities after merger and acquisition takes place.

Challenges of Workforce Retention after Mergers and Acquisitions

From the case scenario, it has been observed that Steve, Bruce, Kaspar and Christian wanted to recruit some potential candidates for their merged company. It has been observed that it was Steve’s plan to shut down the DeWaal plant in Indonesia. This plant was redundant. Steve wanted to keep the BioHealth plant in Shanghai. Besides, Steve wanted to offer a position of CFO to Sandy Allen but she had left the organization before he had offered her the CFO position. It has been noticed that Kaspar wanted his HR team to carry out operations in Europe. On the other hand, Steve wanted to recruit COO, CFO and head of R & D (Bartlett & Beamish, 2018). Albert Schenk, an employee of DeWaal Pharmaceuticals will become the new director of Sales and Marketing. Kasper wanted Christian Meyer to become the new head of HR and Steve has accepted this offer. In this context, it can be stated that Bruce is going to take over the position of Director of Corporate Training. All these information reflects the fact that Kasper is more influential than that of Steve.

As per the concept of Agency Theory, relationship between people as well as self-interest in companies are explained in this theoretical concept. It explains relationship between agents as well as delegation of control (Bartlett & Beamish, 2018).  From the case study, it has been observed that both of the owners wants to gain complete control and authority in the decision-making process. The wants to be the sole decision-maker of this business firm. From the case scenario, it has been observed that hierarchical structure is being followed in this merged company. According to Carroll & Buchholtz (2014), in a hierarchical structure, employees acts as per the instructions given to them by the top-level management . Steve expresses his willingness to hire Vijay Naipaul, to be the man in-charge of operations at the Bombay plant. After this, he wanted Peter Krug and Vijay Naipaul to handle the operations of Bombay plant. From the case scenario, it is clear that Steve had taken important decisions very haphazardly when it comes to HR integration.  In other words, It should be noted that the HR decisions that he had taken was not at all organized (Christopher, 2016). From the case scenario, it has been noticed that no planning was made by Steve for the key executives.

Lack of communication plan has made this HR integration very ineffective (Kerzner & Kerzner, 2017). No assessment and selection process for hiring top-level executives was there in HR plan of Steve. In this regard, it can be stated that an absence of assessment and selection process might result in hiring some incompetent top-level executive and managers. As a result, company’s productivity will get lowered in the due process. Lack of compensation plans has made the process of HR integration quite ineffective (Haugen et al., 2016). In accordance with the opinion of Inzucchi et al., (2015), lack of any sort of compensation plans will not motivate the employees of this merged company to perform better thereby increasing the organisational productivity.

Role of Agency Theory in Decision-Making

As opined by Zouros (2018), lack of coordination among Steve and his team members has resulted to this ineffective HR integration plan. It has been noticed that transparency is not maintained through the process of integration. It has been noticed that both Kasper and Steve had shown biasness when they had expressed his viewpoint of recruiting some of the top-level executives. Apart from this, Steve’s ineffective HR integration has costed him to lose some of the talented skilled professionals. There was no incentive structure in HR integration planning that could have prevented losing of some staffs. In this context, it can be stated that HR integration process did not meet up to the expectations. It could be more effective if the plans included proper assessment plans along with selection process. It could have been more effective if it consists of communication plans. Absence of communication plans has increased the ineffectiveness of HR integration process. The entire process of HR integration has been conducted verbally between Steve, Bruce, Kaspar and Christian. No written format was followed at the time of conducting HR integration process, thereby increasing the ineffectiveness of the entire HR integration procedure.

There are certain ways by which values of can be resolved. It has been observed that it is possible for the person to solve the conflicts by addressing them in a proper way. Hill, Jones, & Schilling, 2014). From the case scenario, by listening to the viewpoints shared by others in a calm and stable way, it is possible for them to solve the conflicting values. In order to resolve the conflicting issues, the person have to show respect and listen to what other individuals are saying (Roffi et al., 2016). This is one of the best solutions of resolving the conflict. It is very important for the parties to have a meaningful as well as respectful discussion. This is applicable for Steve and Kasper also.

In accordance with the opinion of Schwalbe (2015), staying focused on the issue is considered as one of the effective techniques for resolving the conflicting values. It is very important for the parties to work collaboratively towards the conflicting values so that it is possible to resolve them. In other words, negotiation must be done between the parties in order to resolve the conflicting values (Fayol, 2016)). From the case scenario, it has been noticed one of the union officials had rejected the proposal of the company. In this case, the management and the union officials should work together for resolving conflicts. In this regard, it can be stated that negotiation need to be done between manager and union officials. From the perspective of Bratton & Gold (2017), by taking help of a mediator, it is possible to solve the conflicting values. In this context, it can be stated that active listening would help the mediator to understand the root causes of conflict.  After this, thoughtful questions should be asked by the mediator to the parties. It is the responsibility of the mediator to influence other individuals for coming to a solution. In other words, it is the role of the mediator to put an end to the conflicting values.

Ways to Resolve Conflicting Values

From the case scenario, it has been observed that the mediator should learn carefully what the parties are saying. After this, the mediator would start asking thoughtful questions to the manager who prepared the proposal and the union officials who rejected it. In other words, active listening of the mediator enables the person to get a clear idea about what the individuals are saying based on which he or she would exert influence on other individuals. In the opinion of Brewster (2017) active listening also help the mediator to solve conflicting values.  In accordance with the opinion of Negotiation aids the person to resolve the values of conflicts. It is important for the mediator to be calm and stable while people are opening up and sharing their viewpoints (Stadtler, 2015). These are some of the effective techniqies by which it is possible for a person to find out solutions that will resolve the values of conflicts.

It has been observed that there are certain steps that should be followed at the time of integrating HR systems. A meeting should be fixed between two senior executives and his HR people. A written format should be followed at the time of HR integration processes.  It is a suggestion for the two senior executives to include a communication plan and evaluation as well as selection processes in the written format.

It is a suggestion for the two senior executives to include compensation plan in order to make this integration process more effective by nature. It is recommended for them to include appraisals and rewards and recognition in their HR plan. It is recommended for the managers to submit salaries to the review committee. After the submission of payments to the review committee, the review committee should return the over-budget amount to the managers for making adjustments as well as re-submission. It should be noted that top-down-approach should be followed throughout the HR integration system. In this particular approach, all the information should be communicated to the low-level employees by the top-level employees. For this purpose, face-to-face meetings should be organized by senior executives and other members of the Human Resource team. The two senior executives and his HR team should communicate all the necessary information to its employees via emails. It should be ensured that no exceeding of the budget can be done by the low-level skilled professionals without taking approval of head of Review Committee. The senior executives in conjunction with IT team can successfully formulate the data map.  

Inefficiencies in HR Integration

It should be noted that cross-checking as well as validating the process mapping will be done by data mapping. It is a suggestion for the two senior executives as well as HR people to store all the details of employees in the company’s database. It is recommended for the senior executives to provide on-job training to its low-level skilled employees in order to educate them about their job profile, job responsibilities, organizational policies. In order to make the employees aware of the incentives, compensation benefits and bonuses, the two senior executives including his HR team members should incorporate training in the workflow of the respective organization.

The HR team and the senior executives should keep all the details of HR planning in a written format. The senior executives and the other members of the HR team should enter into the terms and conditions of contractual agreement. It should be mentioned in the contractual agreement that what will be their job responsibilities, whether these employees are full-time or part-time employees, what will be their pay structure, what kind of compensation benefits will they receive. The contractual will also cover what will be their incentive structure if they perform well in the respective business firm. It is a suggestion for the two  senior executives and rest HR people  to maintain transparency throughout the processes of  HR integration. It is  a suggestion for the two executives to work collaboratively with review committee for preparing a communication plan and budget plan in order to recruit and select potential candidates for their company.

Relation between principals as well as agents are described in agency theory. According to the concept of this particular theory, it solves the existing issues related to agency relationship as goals are not properly aligned.

From the case scenario it can be stated that the issues that exists in HR integration can be resolved through the proper implication of agency theory. It has been observed that if this theory is applied properly within the working procedures of the organization, then HR team will follow the instructions of senior executives and they will act accordingly. It is seen that it becomes easier for the top-level executives to implement their strategic decisions effectively. According to Inefficient Management theory, the managers are so incompetent that they are unable to fruitfully manage the assets thereby reducing the overall productivity of the business firm. In this context, it can be stated that merger with another business organization might increase its core competencies.

From the case scenario, it can be stated that the proper application of this theoretical concept will help the top-level management to identify the incompetent managers. The main purpose is to give them adequate training sessions so they can increase their professional skills. In other words, the appropriate implication of this particular theory will help the incompetent managers to manage the assets in an effective manner. In this context, it can be stated that this theoretical concept has aided the company to identify the managers who are facng issues to manage the assets fruitfully. The main objective is to merge the company with another business so that the productivity of the vulnerable firms can be increased to a great extent. In this regard, it can be stated that proper application of Insufficient Management theory will enhance the productivity of the firm. Not only this, it aids the firm to increase its overall profitability. Therefore, it can be stated that Insufficient Management Theory as well as the Agency theory will increase the firm’s overall productivity as well as profitability thereby retaining its competitive advantage in the market.

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