Change Management In Travel Agency Merger - A Consultant's Essay.

This assignment based onn Two large Travel Agencies are about to merge together. Holiday Seekers Travel Agency and Small World Travel Agency are both public companies (shares listed on the stock exchange).

The Holiday Seekers Travel Agency was established in 1960 and it is a traditional agency with 50 physical branches in the Middle East and 301 employees. Bookings for hotels, air tickets, tours, etc. are all done ‘physically’ by welcoming the customer in the travel agency branch and dealing with his / her holiday needs.

The Small World Travel Agency was established in 2001 and it is an online ‘virtual’ high tech travel agency with no physical location or branches. Their headquarter is based in Downtown Dubai …. 65 employees work for this travel agency.

The CEO’s of both companies are extremely anxious (they know at least one of them has to go).

The news of the merger is not public yet. Only members of the Board of Directors know about the merger. No one else knows. It is a fact, however, that restructuring is essential and ‘rightsizing’ is inevitable.

It has been decided that the new company (the result of the merger) will still have physical branches (20 branches), which is much less than the number of branches the Holiday Seekers Travel Agency currently has, giving customers the choice to use a traditional way to book their holidays or to do it fully online.

Here is what you are supposed to do:

You have been approached by a regulatory body (acting in the interest of all shareholders) to be a Consultant to offer advice on how to handle this ‘Change’. You will be paid 200,000 AED for your report. You are, therefore, required to write a report of Maximum 15 pages offering your advice on how they should implement the change.

About the Companies

The report helps in the overall analysis of the two travel agencies which are about to merge with one another. Baumgartner and Rauter (2017), has commented that change management is one of the systematic approaches which helps the organizations in dealing with the transformation or the transition of the goals, technologies or the processes which will be adopted by the companies. Furthermore, Lozano, Ceulemans and Seatter (2015), has opined that the main goal of change management process is to improving the different tasks performed by the organization and this will impact the structure of the organization or the different job roles or system which will be beneficial for the success of the organization.

In the respective report, the two organizations which have been taken into consideration in the respective report are Holiday Seekers Travel Agency and Small World Travel Agency which are the public companies. The main aim and purpose of the report is that I have been appointed as the consultant by the regulatory bodies of both the organizations in order to offer the proper kind of advice in handling the change which is required to be adopted by the organizations as this will be increasing the overall efficiency of the organization in an effective manner.

Pugh (2016), has hypothesised that change management helps in incorporating the different organizational tools which can be used by the organization in making the transitions which will be resulting in adaption along with realization of the change which will be beneficial for the organization in an effective manner. On the other hand, Schmidt, Groeneveld and Van de Walle (2017), has commented that there can be different positive impacts of the change management on the different tasks which are being performed in the organization. The ability of the change management can help the organization in gaining competitive advantage in the entire marketplace.

On the contrary, Singla, Ahuja and Sethi (2018), have opined and hypothesised that there are different negative impacts of the change management on the organization along with on the morale of the employees working in the organization. This can be analysed that the change can be costly in nature and this will lower the morale of the employees working in the organization. There can be huge drop in the retention level of the employees and this will create negative impact on the productivity of the entire organization.

Stead and Stead (2017), has opined that while implementing the change in the organization, this is essential in analysing the steps which is essential to ensure that the initiative for the change is successful and this will help the organization in gaining competitive advantage. Firstly, the identification of the change is required to be identified which can be improved and present solid case to the different stakeholders which will be beneficial for the success of the firm after the change process which is being conducted. Proper planning is essential in nature which will be beneficial for implementing the change in a positive manner. The different resources are required to be provided along with usage of the data is essential for the evaluation of the data (Henri, Journeault and Brousseau 2017).

Present Scenario

The two companies which have decided to merge together are travel agencies named Holiday Seekers Travel Agency and the Small World Travel Agency. These companies are both public companies and have been in the business for a long period of time. The first company, The Holiday Seekers Travel Agency was established in the year 1960 and operates as a traditional travel agency whereby it has 50 physical branches in the Middle East with around 301 employees. The agency takes in bookings for the different hotels, tours, air tickets as well as other travel concerns. The different customers are dealt with physically and the customers by taking them at the office and then dealing with their specific needs.

On the other hand, the Small World Travel Agency is a new type of Travel agency and was established in the year 2001. The travel agency can be stated to be an online virtual high technology travel agency whereby it does not have any physical branches. The headquarters of this agency is based in Downtown Dubai and there are around 65 employees working for the particular agency at large. The agencies are totally opposite in nature whereby one uses the traditional means and the latter makes use of all the modern means of conducting business.

At present the situation is that both these companies have decided to get into a merger in order to ensure that they can take advantage of the synergy and in lieu of that they will be sharing all their knowledge as well as resources in order to ensure that they are successfully able to capture a larger audience. However, the news of the merger has not been made public and just the Board of Directors are aware of the situation. The main characteristic on which this merger is based is that there will exist a profound restructuring along with rightsizing of the number of employees. A merger can be stated to be a voluntary amalgamation which takes place between two firms who have and equal terms into one legal entity (Todnem 2005). In case the different companies are public companies then the merger is largely impacted by the exchange of the pre-merger stock and the formation of one single stock base for the new organization.

Although the owners of the merger entity remain the same, the managing head often has to be chosen as one (Bailey 2014). The resources of each of the companies are generally merged together in order to ensure that maximum benefits can be gained throughout (Amis et al. 2017). In case the merged entities are competitors, the merger is known as a horizontal integration which is the case for the travel agent firms whereas, when the merger takes place between the supplier of a firm and the customer of the firm then it is known as a vertical integration.

The different characteristics of the mergers are as follows:

• Transparency:There must exist considerable transparency between the different companies when a merger is about to take place.
• Communication:There needs to exist a considerable form of communication between the different companies with respect to the terms as well as the conditions of the specific merger (Kotter 2008).
• Change management:As the merger is often taken as a transition, there needs to exist a sense of change which needs to be transited well.

For these companies, it is has been decided that, the resultant company will be termed as J and that it will have a considerable amount of physical branches which is much less than the number of branches the former company has which will then lead to the rightsizing of the employees. In this manner, the firm aims to give both a traditional as well as a modern approach to their new merged company which will be called J.

Possible Impacts of the Change on Stakeholders and Dealing with Such Issues 

Steigenberger (2015), has commented that the different stakeholders of the organizations are affected by the different changes which are being adopted by the higher-level employees working in the organization. The different stakeholders of the travel agencies are inclusive of the national governments, different tourism institutions, customers. The different tourism establishments along with institutions which are engaged in financing the different kinds of projects related tourism are the major stakeholders who will be affected from the changes which will be implemented by the two tourism organizations namely Holiday Seekers Travel Agency and Small World Travel Agency.

Tukker et al. (2017), have hypothesized that all the stakeholders are affected in an indirect or direct manner by the merger or the takeover which is being done by the organizations or the travel agencies which are taken into consideration in the respective report. On the other hand, Verhulst and Lambrechts (2016), have opined that there are different negative kinds of impacts on the stakeholders of the different businesses as they are the major part of the business and this affects their morale in performing the different kinds of tasks. Webb (2017), has opined that the major and key issue is the analysis of the actual extent to which the employees will be affected by the transition or the transformation which have been taken place in the entire organization in a negative or positive manner.

According to Tukker et al. (2017), the stakeholders are the ones who have a total interest on the success of the organization. As per the stakeholder model, this helps in analyzing that the all the different parties are affected in a huge manner by the decisions which are taken place in the management of the travel agencies. In regards to the travel agencies which are being taken into consideration in the respective report is related to the both positive and negative impacts as there are few cases wherein the customers, employees, suppliers along with the local government authorities are mostly affected in a negative manner due to the transition which takes place in the travel agencies.

Takeover or Merger Decisions	Supported By?	Opposed by?
Reduce the costs	Shareholders	Employees and Local Government Authorities
Increase in the Selling Price by 10% in order to improve the profit margins of the customers	Shareholders and Management	Customers

From the above table, this can be analyzed and identified that there are different kinds of oppositions and the support which are gained by the organizations along with the different stakeholders who will be affected by the changes which are being taken place in the travel agencies. When there will be increase in the selling price by 10%, this will be beneficial for the organization, however this will affect the customers in a negative manner which will be ineffective in nature (Hornstein 2015). Furthermore, there can be different negative impacts of the mergers of the two travel agencies on the different stakeholders which have been mentioned above which is inclusive of the following factors:

Firstly, there can be risk of job loss among the different employees working in the both the travel agencies namely Holiday Seekers Travel Agency and Small World Travel Agency and this will create and knock the effect on the local economy. The fear of job loss can be seen among the different employees which will cause clash in the culture as rarely the two organizations have the same culture. Due to this, this can create negative impact on the employees which will be impacting the entire productivity and they can lose the different opportunities for the growth in the organization as well (Brones et al. 2017).

Secondly, there can be uncertainty along with insecurity of the job among the different employees working in both the organizations. As due to the transition and the transformation of the organizations, as the transition in the organizational structure and the systems are integrated in an effective manner which will be beneficial for the organization, however there will be negative impact on the employees as they will lose their morale in performing the tasks in a positive manner (Van der Voet 2014).

Lastly, the mergers of Holiday Seekers Travel Agency and Small World Travel Agency can impact the confidence of the different employees in the different organizations. The mergers tend to have negative impact on how the employers in the organization treat the employees while implementing the change in the organization. Carley and Christie (2017), has suggested that the different employees are likely to quit wherein the new team do not provide the clear vision and future for the different organizations in a negative manner.

For instance- There are different kinds of examples which can be taken into consideration which can be helpful in analysis of the reaction of the stakeholders pre and post mergers and acquisitions. When Coca-Cola tried to merge with Innocent, there was huge widespread of the criticism of the customers in the market and this affected the ethically and eco-friendly business of Coca-Cola as well.

Secondly, the other example is relating to the L’Oréal and Body Shop in which there was hostile reaction from the different pressure groups and media along with the different customers and there was no such successful implementation of the same kinds of strategies in the success of the organization.

Whenever, a merger takes place, it is very important for the business to ensure that they have adequate leadership capabilities which will then allow them to carry the transition easily. The business needs to ensure that there exists a considerable program for these leaders which will then cause a big difference (Kotter 2012). As the mergers can be stated to be quite high profile and high risk events, the goals are required to be aligned carefully to the performance and the risks need to be mitigated.  According to Salman et al. (2017), it often becomes a possibility that the leadership is poor and that the different leaders are unable to build an integrating experience which will then allow them to perform well. Hence, it needs to be the main objective of the senior management to see to it that this merger of these travel agencies form a platform to foster both technical as well as leadership skills. The technical skills are sills like capturing value, integration planning and transforming of the business support functions.

The leadership skills are skills like steering the teams, managing integrated teams, navigating a complex matrix among others. It is advised to the J travel agency that the change needs to be managed by three different layers of leadership, where each layer seeks to ensure that all the aspects of the organization are adequately covered in the particular change procedure and that the change is successful to carry out (Small et al. 2016). The following roles of the leaders and the hierarchy of their leadership procedure has been suggested for the J Company to carry out:

1. The top management- For the J company, the top team of leaders who will be the CEO and the other direct reporters will be required to understand the terms and conditions of the entire change procedure, push the different team members to perform well and to ensure that define the new company`s strategy at large.
2. The integration leaders:The second layer of managers will be the integration leaders who will be provided with the opportunity to ensure that they will be successfully able to manage the mobilization of the teams and combine the two different companies easily so that all of them are able to find adequate departments and that the rightsizing of employees takes place (Salman and Broten 2017). As this merger will lead to a restoring of the organization, it will be useful to ensure the teams and the departments are allocated suitably.
3. The broader New Company leadership team:Lastly, the leadership company in the new company also needs to be formed who will be involved in carrying out the change and ensuring that they engage themselves in fostering a unique culture in the J agency which will then ensure higher performance levels.

The leadership style which has to be used by the different members of the leadership can be stated to be the Transformational Leadership style (Rosenbaum, More and Steane 2018). In this kind of a leadership style, the team leaders work along with the entire team and plan to ensure that they are successfully able to manage the change and integrate the two different working styles which are the traditional and the online.

Fusch and Ness (2015), has commented that there is proper creation of culture is essential in nature which will be helpful in accepting the change in an effective manner. From the above case scenario, this can be analysed that Holiday Seekers Travel Agency was established and this is the traditional kind of agency which has more than 50 physical branches. There is proper physical presence of the organization in a positive manner.

 On the other hand, this can be seen that Small World Travel Agency which have virtual kind of presence in the entire market and this will be beneficial for the present generation. From the above, this can be seen that both the organizations have various kinds of culture which differ from one another.

The company which will be newly formed after the merger of the two companies which is inclusive of Holiday Seekers Travel Agency and Small World Travel Agency named J will be having an organizational culture which will be beneficial for the welfare of the employees working in the organization. Furthermore, such kind of culture of the new organization will be beneficial for the overall merger of the organization in an effective manner and this is successful in managing the different kinds of operations.  Doppelt (2017), has hypothesised that culture of the organization helps in providing framework which is inclusive of the behaviour of the different employees in the workplace.

The Adhocracy Culture can be adopted by the J Company after the merger of Holiday Seekers Travel Agency and Small World Travel Agency which will be beneficial for the overall success of the firm in an effective manner. The culture of the organization helps in determining the performance of the different employees which will be beneficial for managing the different aspects in an efficient manner. The respective culture is based on creativity and energy which will be beneficial after the merger of both the organizations Holiday Seekers Travel Agency and Small World Travel Agency (Carley and Christie 2017).

With the respective culture, this enables the different employees in taking risks in managing the different activities effectively. The adhocracy culture employees are being considered as the innovators wherein this will be helpful in achieving the corporate results in an efficient manner as well. With the help of the culture, this will be helpful for Holiday Seekers Travel Agency and Small World Travel Agency in analysing and accepting the culture of one another and gaining competitive advantage in the market effectively as well (van Rossum et al. 2016).

The major value drivers of the respective culture are the different innovative kinds of outputs, agility along with transformation. The quality improvement strategy in this respective adhocracy kind of culture will be inclusive of the delight along with surprises which will be adoptable by the organizations by creating different kinds of new standards and anticipation of the needs. This will be inclusion of the continuous improvement along with finding creative solutions for the new team which will be performed by both the organizations namely Holiday Seekers Travel Agency and Small World Travel Agency.

The formation of the new team J will be unique and more competitive in nature as there will be mixture of the different cultures and this will be helpful for the merger to complete the same in a successful manner. Moreover, the respective organizational culture will be beneficial for the overall success of the companies and this will be effective in nature in fostering creative and positive kind of work environment as this will enhance the positive work environment in an appropriate manner. In mergers, this can be seen and identified that there can be different kinds of risks which are being managed by the adhocracy clan culture of the organization and this will create positive impact on the organization as well (van Rossum et al. 2016).  

Managing change can be quite difficult and with respect to this, as a consultant I recommend the J organizations to use the Kotter`s 8 step model of change whereby they will successfully able to manage the change of the merger. These eight steps come in the form of success factors and these steps can be adopted for the benefit. The explanation of the manner in which these 8 steps can be implemented has been given as follows:

1. Creating urgency: In the given step, it is important to create a sense of urgency in the business. This goes a long way in ensuring that the different organizational members understand why the merger is crucial and why the different members of the firm would be required to abide by the particular change which shall take place in the business environment at large.
2. Forming a guiding Coalition: The next step is forming a guiding coalition. In this procedure, when a group of people who are able to drive the particular change come together and are able to communicate their activities towards the particular change which is to take place (Rani, Yadav and Jain 2016). This is important to ensure that change is clearly accepted by all the members of the organization which shall then ensure a successful transition towards the particular merger
3. Forming a strategy and a related vision: The third step in the Kotter`s Model is to form a specific strategy with respect to the merger and seeing to it that the organization is successfully able to ensure that the change procedure is managed well (Kramer and Magee 1990). This procedure also aims to ensure that the future of the firm is different from the past and that the present of the merger is linked to reality.
4. Enlisting a group of voluntary leaders: As carried out in the step earlier, the coalition needs to be set effectively and a group of voluntary leaders need to be formed effectively which shall help in ensuring that the merger transition and the amalgamation of the two organizations can be carried out successfully (Kotter 1995).
5. Enabling action by removal of barriers: The main step is to enable action. In this procedure the barriers of the organization such as the limited structure of the firm along with the hierarchy needs to be altered adequately in order to ensure that action can take place and that the merger of the J firm can be carried out successfully.
6. Generation of short term wins: The short term wins need to be celebrated, For instance, if the firm is able to meet its short term objectives of the establishment of a few branches successfully then the firm can celebrate the win which will ensure successful implementation of the different goals of the firm at large and increase the motivational level of the different employees who are present in the workplace at large (Kotter and Cohen 2012).
7. Sustaining acceleration: In this step, the organization tends to speed up the gained momentum.
8. Enabling the change permanently:The last step of the given model suggests that the change which takes place in the organization needs to be made permanent in nature. The entire merger procedure needs to be carried out successfully and the firm needs to ensure that the different members of the new company along with the rightsizing aspect is carried out successfully.

With the implementation of the Kotter’s Change Management Model, this will be beneficial for the success of the organization along with there will be increase in the productivity of the organization in an efficient manner. The 8-step change model of Kotter’s Change Management Model will be beneficial for the overall change management of the organization and this will be helpful for the employees to be aware of the same in an efficient manner.

With the same, there will be sustainable development, long-lasting change which will be important for the improvements in the business. In case of merger of the two travel agencies, the change management model can be helpful in focusing on the different employees who are the major part of the company as this will assist in creating sense of urgency. The Kotter’s Change Management Model is essential in nature which can help the organization in managing the overall effectiveness of the organization along with maintaining the morale of the morale of the employees in a positive manner as well.

Firstly, to create urgency is the first aspect in the change management model wherein the board members of both the travel agencies need to let the employees know about the different kinds of changes which are going to take place along with reasons for the respective changes as well. Moreover, the proper identification of the different threats along with opportunities needs to be identified which will be helpful for travel agencies to examine the competitive realities.

Secondly, forming powerful guiding coalition is the other aspect which will be essential for the travel agencies to let the employees know about the respective change which will be taking place. This is a good idea which helps in establishing project team which can include the different kinds of constructive approach and the cooperation of the different employees will be helpful in handling the situation in an effective manner (van Rossum et al. 2016).

Thirdly, creating proper vision for the change is the other aspect which is required to be implemented by the travel agencies as this will be aiding in making the organization achieve the overall profitability effectively. The involvement of the different employees in the process of the change management will be making the change more concrete along with creating support to implement the same. The proper linkage with the adopted vision to the different strategies which will help the employees in managing and achieving the goals effectively.

Fourthly, communicating the vision is essential in nature which will make the employees feel that they are important for the organization and this will be helpful in managing the change process effectively. The acceptance among the different employees is essential in nature which will be effective in nature in reducing the resistance to the change and gain more competitiveness in the organization effectively (van Rossum et al. 2016).

Fifthly, the removing of the different obstacles is essential which is required to be taken into consideration by making the employees a part of the conversation. This is important for both the travel agencies to encourage the different ideas of the different employees working in the organization and the ideas can be incorporated and this will make the entire process of the change management successful in nature as well (Epstein 2018).

Sixthly, the creation of the short-term wins is the other aspect by motivating the employees and engaging them in different other activities in the organization. This can be seen and analysed that the restructuring is essential in nature along with rightsizing of the employees is inevitable in nature. So, in this process this can be seen that the company needs to employ them in different other activities which will make them feel motivated and gain competitive advantage (Epstein 2018).

Seventhly, consolidating the different improvements is essential wherein the long-term change can be improved and gained by the company effectively. The employees who are involved with the change process of the organization are required to take into consideration the various types of aspects which is inclusive of the rewarding and acknowledging the different employees who are important in the process.

Lastly, anchoring the changes is essential in nature which is essential for the change management process as this will help in creation of the corporate culture and gain more competitiveness in the organization in an effective manner as well.

Although carrying out the change procedure is often considered to be an easy aspect and often not taken very successfully by the firm at large, just bringing about the transition is not any easy aspect but it needs to be seen to it that the change is maintained well within the realm of the firm (Hayes 2018). However, as this is a merger, there will take place a large amount of resistance from the employees as their numbers would be required to be rightsized and the company with its new 20 offices will be able to function successfully. As a consultant, according to me, the following steps need to be taken to maintain the change:

• Using momentum to maintain the change: As the change procedure is considered to be a difficult one, the momentum is generally built in the first phase of the change and thus, this momentum is important to be maintain throughout the operations so that the success can be effectively achieved.
• Rewarding the different employees: The employees undergo a considerable change factor when they are involved in a merger or an acquisition (Ivancevich, Matteson and Konopaske 1990). Hence, for this purpose, their contribution needs to be valued and they are required to be rewarded and praised continuously to see to it that the different employees are able to successfully ensure that they continue giving their efforts for the welfare of the firm.
• Making the change the part of the organizational structure: Restructuring has a key role to play in an organization and in order to be successful in the long run and ensure that the merger is successful in the long run, the firm needs to see to it that the organizational structure is changed according to the requirements of the merger (Carnall 2018). The main motive must always be to ensure considerable success and to see to it that the revenues of the firm increase considerably.

Although the given steps have been given for maintaining the given level of change, there are certain sustainability issues which may take place in the organization and they have been given as follows:

1. Resistance from employees:As the company may be required to right-size its employees and see to it that the correct number of employees are present for the specific branch, there may be several resistance issues from the employees which may act as a barrier for the firm at large (Cummings, Bridgman and Brown 2016).
2. Societal pressure:Moreover, this rightsizing phase may also prove to be a negative aspect for the firm in the eyes of the different members of the society and the various institutions as well as the unions may also force the company not to right size and carryout the change, once the information of the merger is out (Burns and Vaivio 2001).
3. Functionality issues: In the case of J, there may be several issues as faced by the firm in managing the operations of the different departments because on one hand one company was virtual and the other one was an absolute traditional.
4. The Leadership tension: There exists a certain level of uncertainty with respect to the fact that who would be leading the specific organizational change and which CEO would continue to operate. Hence, it becomes considerably difficult for the firm to handle its operations when such a tension prevails.

Hence, from the above analysis, it can be mentioned that the J company will be undergoing a considerable amount of change and for this reason, in order to manage the transition of the company, the following recommendations are being provided:

1. Choosing the correct change agents: The right kind of change agents are required to be chosen by the firm in order to ensure that the transition of the change so that there exists no issues with respect to the transition process.
2. Communication is the Key: The change needs to be communicated effectively at all levels of the change because the employees always need to be aware of the fact whether their position is in danger or not.
3. Recruiting help to manage the change: According to Cameron and Green (2015), it is believed that a company is required to attain outside help in order to be able to manage the entire change procedure. This practice will ensure that the firm is successfully able to ensure that there exists no biasness in the given transition process towards the merger and the right employees are transferred to the new venture.
4. Giving it time: The change procedure does not happen automatically. It takes time and efforts. Hence, a company is required to ensure that the firm is successfully able to give time to the change and then witness the success of the venture (Cartwright and Cooper 2014).

Conclusion 

Therefore, from the above case study, this can be analyzed and identified that there are different kinds of negative and positive impacts of the change management on the stakeholders. The main aspects are mainly negative in nature which affects the overall productivity of the firm and this has decreased the morale of the employees in a negative manner as well. Furthermore, this can be seen that only the Board Members of the organizations are aware about the merger which will be done and the employees are not being aware of the same in an inefficient manner. However, the restructuring is essential in nature and the rightsizing is unavoidable.

As a consultant, the implementation of the proper change management model is essential and the Kotter’s Change Management Model can be helpful for the respective two travel agencies in managing the effectiveness of the firms and this will be beneficial for the productivity of the organization along with the employees working in the organization as well. As a consultant, I feel there can be different negative impacts of the change management on the employees as they are not aware about the change which is being caused in both the travel agencies.

As rightsizing is essential and inevitable in nature, this is essential for the companies to make the employees aware about the change as this will be helpful in managing the change appropriately and there will be no such problems which can occur in managing the change. With the proposition of the change model, this can help the higher officials and board members in the organization to maintain the change in a sustainable manner and there will be less sustainable issues which can be faced by the organization as well.

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