Conflicting Values At Stake
Discuss About The Discriminant And Criterion Related Validity.
The topic of Merger and Acquisition holds mixed emotions among the employees. Some of the employees might not entertain the motive of merging an organisation with the other organisation mainly because of the fear of losing out on the prospect of their career as well as the opportunities in rising higher in life. The issues are addressed by the senior leadership in collaboration with the Human Resource Management Team. The Human Resource Management Team must address a number of issues such as determining the organizational goals and explaining it to the employees to address their concerns regarding the merger and acquisition. The report discusses about the topic of merger and acquisition and how it affects the employees. The concerns of the employees are enumerated in the report as also the strategies to improve the conditions after the merger and acquisition.
Mergers and Acquisition of a company is not an easy decision for the top leadership to make in any organization. The situation if it becomes inevitable leads to the leadership accepting to issue equity or shares for the other companies to buy the ownership share of the company or the organization (Marks & Mirvis, 2015). The Pecking Order Theory clearly explain the situation of Mergers and Acquisition of a company. The Pecking order theory states that the leaders of a company know best about the financial details of a company. The leaders, when they realise that the company is running low on the finances, follow three procedures to bail out a company. First, they manage the internal funds (Dunlap et al., 2016). When the funds are not available then they follow the procedure of debt by taking loans. When they are in no more position to incur further debts, then they issue equity. Pecking order theory states the leaders are the best person to know about the running of the company and that they will opt for issuing equity as the last option. There are many values which conflict with each other when the company is merged. The employees face a challenge of communication after the merger as they fear that the merger will affect their work and there is a rise of insecurity regarding the job (Field & Mkrtchyan, 2017). There is a constant challenge of retaining the job for the employees as the new merger can be detrimental for the employees’ career. The employees become unsure about the future of their tenure in the company and it can result in the high turnover in the company. The culture which is the shared values and beliefs present in a company becomes diluted after the company merges with another company. After the merger, the changes in the management process and styles affect the working of the employees as the previous work culture was different than the present culture (Graebner et al., 2017).
Critical Analysis Of The Process Of Merger And Acquisition
The process that follows the merging and acquisition of a company can prove risky as there are numerous challenges which can arise after the process. There is a risk of integration. The process of integration involves the incorporating all the workers, both old and new, into the work culture so that the work is not affected, and the employees feel at ease while doing the job. The issue of integration is crucial as the workers who have been merged into the new company feel reluctant about the prospects and the future outcomes of their work and whether they will be treated fairly by the new managing boards of the company (Davis et al., 2015). The changes happening in the System Dynamics also affects the working of the employees. The changes made in the factors of internal politics, technology and the accounting methods are not easy to adapt to for the employees of the company who have been merged. The merging of the two companies also means changes in the downsizing and the decentralizing procedures to decrease the costs and accelerate the productivity as well as the efficiency of the employees. To do this, the organizational goals and strategy changes altogether. The employees of the former might be working under different organizational goals and strategy. It, therefore, becomes difficult for them to adapt and change to the new organizational framework and follow the new strategies which has been formulated by the present company. The other changes in the organizational establishment also results in the lowering of revenues, low productivity and costs incurred due to restructuring and redesigning of the organizational establishment (Durand, 2016). When two companies from two different countries merge together, then the Government policies of the respective countries also become important in deciding their outcomes. The companies need to be careful while Analysing the legislations and laws which determine the process of doing business. The tariffs imposed on the foreign companies might levy more taxes and the revenues are greatly affected by such laws (Chiu, Chung & Yang, 2016). Therefore, the companies which have a global presence and are merging with international companies need to be fully aware regarding the laws and rules which are in existence in the respective countries. The companies need to be proactive regarding the changes in the laws and rules. The change in the policies of the human resource planning also affects the performance of the employees (Agarwal & Kwan, 2017). The human resource management has the crucial task of redefining the organizational goals and strategy as well as recruiting and selecting new employees. The stress management is also resolved by the human resource management. Similarly, the training of the employees is also looked after by the human resource management team. Often, the problem arises that the employees of the company who have been merged were comfortable with the human resource management team of the previous company and find it difficult to adjust with the new human resource management team. This results in the lowering of the performance as well as the demotivation of the employees which eventually leads to the high turnover ratios (Selçuk, Köksal&Y?lmaz, 2016). The lack of support becomes crucial in the employees quitting the job and looking for brighter avenues. It therefore becomes extremely crucial to resolve their issues by the new human resource management team and help them in addressing the doubts and the queries. The fear of the insecurity of the employees is natural and bound to happen when two companies merge with each other, but it should not be allowed to escalate further. The employees of the previous company have a lack of confidence in the new management team because of their newly becoming accustomed to the working conditions of the new team. Kurt Lewin has given a Change Management Model to describe the Process of Merger and Acquisition (Lee et al., 2014). The first stage involves preparation of the company to the changes which will occur because of the merger. This stage is known as Unfreeze. The next stage is the Change wherein the people get their uncertainty clarified and start adjusting in the new company’s work culture. The final stage is the refreeze, wherein the workers have fully become accustomed to the new working environment of the company and the company decides to refreeze.
Resolving Conflicting Values
The conflicting values can be resolved by following an integration plan to facilitate the workers on becoming more comfortable in doing the business. The senior executives of both the organisations should work together to address the issues concerning the employees and help them resolve those issues. It should be done before undertaking any project or assignment and this will help in the employees becoming more comfortable and relaxed in the new environment. The senior executives of both the organisations must have a clear vision regarding the trajectory that they are going to follow and the procedure that they are going to adopt. The vision and the policies of the company must be aligned properly, and the goals should be clearly mentioned to the employees so that there be no ambiguity regarding the work which the employees are doing. The senior executives of both the organisations must realise that the work cultures of both the organisations are different and culture becomes the deciding factor which sets out the success or the failure of the company. The senior executives must narrate the organizational goals and the changes in the accustomed norms to the employees of the former company, which has merged into the other company (Auguets, Martinez-Blasco & Garcia-Blandon, 2017). It might be also possible that the employees of the former company were following a more relaxed style of work culture, therefore, getting accustomed in the new work culture which is robust and work centric is difficult for them. It is then the duty of the senior executives to resolve the issues. The involvement of the employees must be increased to increase their knowledge about the operations of the organisation. This requires the efforts of the management as well as the senior leadership to engage the employees so that the organizational goals become aligned with the personal goals. After the merger, the employees as well as the customer are not aware as to what will be the new organizational goals of the company and how the company will achieve them (Devi, 2016). It is therefore important for the organisation to keep the customer aware about the future roadmap which they are going to follow (Bhagwat, Dam& Harford, 2016). The customer base of both the companies are the support of the organisation and addressing the concerns of the people becomes the prime focus of the organisation. Therefore, like the sharing of information with the employees of the organisation, the sharing of information with the workers also becomes very essential. The downsizing of the organisation should be the last option. In downsizing, the company reduces the costs and extra work force by motivating the employees with commitment issues and low performance levels to leave the company (Schweizer, 2016).The employees who are not so productive can be outplaced to the other companies and employees with better performance levels from other organisations can be transferred to the company by the transfer window. These are some of the ways through which the conflicting values can be resolved.
The important role played by the people in the Human Resource Management is immense. They are the backbone of the organisation and they are the first group who gets to resolve the issues whichever is affecting the company. The concerns of the employees are address by the Human Resource Management Team. The concerns of the employees such as the career options, the change in the organizational roles allotted to them as well as the transferring of the employees to the new location or place are framed by the Human Resource Management team in collaboration with the top leadership of the organisation. The senior executives in collaboration with the Human Resource Management team must address the issue of integration from a very general perspective. The employees must be welcomed into the new work environment. It is a known fact that the employees are concerned and worried about the new merger and acquisitions which have taken place. Therefore, the senior executives and the Human Resource Management Team have the added responsibilities of managing both the concerns of the employees as well as getting them accustomed to the new organizational setup (Brueller, Carmelli& Markman, 2018). This can be done by enumerating the organizational goals which the organisation is going to follow as well as the trajectory which the organisation is going to tread. The roles which the employees are going to be assigned should be clearly mentioned to them as well the organizational chart representing the hierarchy in the organisation should be distributed to the employees. This will make them comfortable in the new work environment and neutralize the impact of merger and acquisition. The employees must be motivated by the Human Resource Management Team and should be allowed to perform to the best of their potential and abilities. The new organizational setup and the hierarchy must be clearly established to enable the workers to fully understand as to which leader the employee is expected to report to. The new organisation guidelines must be clearly mentioned to avoid any discrepancy and disruption. The new organizational work ethics must be clearly explained by the Human Resource Management Team so that the employees become accustomed to the new work ethics in the organizational setup (Palley, 2016). The issues and problems as and when they occur must be resolved immediately by the senior executives and the Human Resource Management Team. The initial concern must be to address the concerns and worries of the employees rather than distributing organizational goals in the initial period after the merger. The employees perform much better when they work in a relaxed environment and their organizational expectations as well as the roles which they will be playing are clearly mentioned to them.
The Bureaucracy theory as propounded by Max Weber holds crucial to the Merger and Acquisition procedure. In the Bureaucracy theory, Weber stated that the top-level leadership are best suited to take the decision regarding the welfare of the organisation. He was against the feedbacks or opinions of the workers and the employees. Similarly, the merger and acquisition decision are taken by the top-level leadership without involving the suggestions or feedback from the employees. This plays a crucial role in their ability to take a strong decision without the backing of the employees or the workers. The employees are also not made signatories in deciding the course of the merger and the acquisition. From the Scientific Theory Perspective, the Merger and Acquisition hold good as the expert and proficient employees from both the organisations can collaborate with each other to speed up delivering the desired outcomes or services for the organization (Holburn & Bergh, 2014). The organizational goals once explained to the employees, becomes the guiding principal through which they are going to be made to work. The employees also share their expertise in the work which they are allotted. The work requiring the specialists are allotted to the specialists who have been obtained from both the organisation. The application of both the theories- Bureaucracy theory of Max Weber as well as the Scientific Management Theory of Henry Fayol holds significance for Analysing the case of Merger and Acquisition. These theories help us to understand the value of the management process and how management organisations are based on the behavioral aspect of human beings.
From the above analysis, it can be concluded that mergers and acquisition are difficult decisions for the human resource management team to make. There are many concerns which are present in the minds of the employees and these concerns if not addressed properly can accelerate further into serious problematic situations. The Senior Level Management as well as the Human Resource Management team perform the crucial duty of helping the employees to understand and get used to the new setting of the organisation. The organizational goals are detailed and explained to them. The employees are also explained about the roles which they will be performing in the team. This enables the employees to be motivated and perform to the best of their potential.
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