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Impacts of integration models on XYZ employees

Describe about the Impacts of integration models on XYZ employees, Increase in stress due to change in organizational environment and Developing communication strategy of XYZ energy?

Bissell, (2012) stated that merging and acquisition between two companies often creates conflicts between   two group of employees. According to Bruce et al., (2010) employees face difficulty to adjust with new culture during integration of two separate companies. However DePamphilis (2015) opines that the impacts of these   difficulties become more prominent as managements neither shows interest to get employees’ view on the decision, nor involves them directly with the process. Conflicts among can be occurred even organizational structure and culture of both mergers are same.

Analysis of the current case study reflects the presence of cultural conflict among employees due to merging of Big Energy and XYZ energy. However, the case study also reflects that the employees of XYZ energy are facing more difficulties to adopt the culture of working. Although both of the organizations belong to same industry, management of Big Energy ate showing reluctance to increase communication with XYZ employees. As management of Big Energy is not interested to keep all XYZ employees within their organization, most of XYZ staffs already lost their jobs. Lack of communication between Big Energy management and XYZ employees is also increasing the conflicts among employee and management. According to McShane et al., (2012) similarity in organizational structures enables employees to adopt new environment after merging. However, the current case study reflects that Big Energy managed failed to maintaining integrity among staffs after merging and it lead to change in attitude of staffs. The essay deals with identification of impacts of integrating two separate organizations on behavior, value and attitude of employees. Recommendations are also made for Big Energy management to minimize the effects of change in employee nature.

Attitude, value and behavior of employees  are changed  during integration of two  companies  due to presence of  stress, chances of losing job and change in competition (Park, 2012).However,    difference in culture and values also  impact  significantly  on the behavior of employees. The cultures of public and private organizations are different (Ybema et al., 2011).  In this case also, XYZ being a public organization provides employees with freedom to communicate with management. In XYZ, employees from each department are selected as representatives in management. On other hand, Big Energy is a private organization. Although both of the organizations operate in same industry, managements of these organizations provide different working environment to employees. Acquisition of XYZ   increases those chances of being dominated in new integrated environment. Apart from this, the difference in cultural can also increase complexity of the situation.

Generally the mergers do not take opinion from lower level employees before implementing the decision. However Xenikou and Furnham (2013) states that the negative impacts of merging are mostly seen among employees of lower level.  On other hand, Sarris and Kirby (2013) also opined that the employees of lower level in organizational hierarchy are the most affected due to any merging or acquisition process. Integration of two companies often leads to significant change in organizational culture (people.stern.nyu.edu, 2015).  As stated by Alvesson, (2013) sudden change in working environment increases stress among staffs. As staffs of low level   have the  maximum chance  of  losing job  after  integration  among two companies,  amount  of stress caused by change in  working nature is also maximum for these employees (Roberts et al.,2015). Bojica and Fuentes (2012) stated that stress on employees can be reduced by increasing interaction with management. However, Creed (2012) opined that regular communication between employees and management is not only beneficial for reducing stress over employees, but it also enhances loyalty of staffs towards new company.

Increase in stress due to change in organizational environment

According to Lee and Pennings, (2015) management of an organization needs to take proper measure to reduce stress on employees as high stress reduces their productivity. Epstein et al., (2014) also stated that high stress can   not only result degradation in performance of employees, but it also increases the problems like absenteeism and high employee turnover rate. The current analysis regarding effects of stress on employee behavior indicates that lack of stress management strategies can affect long term sustainability of an organization.

According to the present case, XYZ energy is completely acquired by Big Energy. Discussion on the performance of XYZ energy indicates that its employees possess sufficient competency to ensure growth of the organization.  Although structures of both organizations are almost similar, XYZ management provided the employees with more chances of taking part in managerial activities. Although Big Energy management completely bought XYZ energy, the organization is not interested to include employees of the acquired company. From the given case, it is evident that most of the XYZ employees already lost their job although they were equally competent with Big Energy (BE) employees. Information provided on management of BE is not interested to communicate with the existing employees of XYZ. Analysis on the nature of BE management indicates that   the future of existing XYZ employees are also not secured. The current condition of integrated organization is not only creating high stress on employees, the situation is also reducing their loyalty. It is evident that XYZ employees are highly skilled. Increased stress on them can cause poor performance and also this it can reduce their productivity. However, the stress can increases anxiety among employees. Thus the incidents of conflict may arise.

As the BE management is not showing interest to enhance integrity among employees,    dissatisfaction among employees is increasing.  On other hand, activities of management   are clearly reflecting that they are not willing to keep staffs of XYZ.As the chances of losing job is increasing among  existing  XYZ  employees  their loyalty to the new organization is reducing. According to Murphy (2013) avoiding cultural conflict is impossible when two organizations are merged together.  However, the incidents of conflicts can be reduced if employees of both organizations get the opportunity of knowing each other (Park, 2012).   The case study states that managers of Big Energy are not showing interest to visit remote offices of XYZ. Apart from this, XYZ employees are not being provided with the opportunity of knowing BE staffs. As none of the parties are communicating with each other, XYZ staffs are being detached from management. DePamphilis, (2015) stated that commitment of staffs toward the work depends on their level of loyalty to management. However, lack of communication is reducing the commitment of XYZ staffs.  Apart from this, with reduction in job security, anxiety among staffs is increasing and it is resulting different physical and psychological problems.

In spite of being highly skilled, XYZ employees are losing their jobs. As a result, the activities of BE management may seem partial to those employees.  It is evident that the employees of XYZ are not being judged by their   skills only. According to Lee and Pennings, (2015) impartial nature of management encourages employees to improve their moral values. In the current case, security of job is not determined by performance only. Maximum degradation in moral values arisen when job security is hampered (DePamphilis, 2015). Analysis of current scenario in XYZ energy is indicating that the existing employees may get involved with immoral practices to for personal benefit. As the integrity among employees is reducing, conflicts among them can increase. Degradation in moral values among employees can lead to poor performance, increased tendency of being absent, decreased loyalty to the organization as well as several physical problems related to hypertension and cardiovascular activities.

Increase in fear of losing job due to management policies

Discussion on problems caused by wrong integration model adaption indicates that impacts of this integration model are currently affecting XYZ employees. However the long term growth of Big Energy can also be hampered by implementation of ineffective integration strategies by Big Energy management. If the management fails to use skilled employees, the primary objective of merger will not be satisfied.  The adverse effects of wrong integration strategies can be minimized by taking some immediate actions. In this essay some recommendations are made for Big Energy management to solve the problems.

BE management should focus on increasing communication. Increase in communication between both parties will also lead to increase in integrity among them. However, the management should focus more enhancing the level of understanding between two organizations instead of conducting formal communication programs. Management of Big Energy should engage the leaders of XYZ energy with the process of communication strategy development.  Apart from   this the management should also focus on development of proper schedule of communication programs. Management if BE should also ensure that the employees of both organizations are getting sufficient chances to interact among themselves.  Increased interaction among the employees will lead to enhanced productivity of the organization. As the XYZ was a public organization, employees of this   company got more chances to communicate with management.  Although, BE is privately owned organizations, the new employees should be encouraged to   communicate within the management whenever required. It will enable the management to increase participation of XYZ employees in organizational activities. Currently the management of BE is not dealing with XYZ leaders with equal importance. The management should ensure that XYZ leaders are being allowed to take part in managerial activities to utilize their capabilities.

Discussion on the current scenario is indicating that the level of dissatisfaction is high among XYZ employees. Management of the organization should monitor the attitude of new employees to get information regarding view on integrated company. As the cultures of both organizations are different, employees of XYZ can face difficulty in adapting new culture. Management of Big Energy should arrange training sessions so that the new employees can adopt organizational culture without creating any effect on   their performance. BE management should ensure that the effective practices of both XYZ and BE couture are combined together to form a new integrated culture. Managers f BE should arrange for face to face interviews of XYZ employees to assessing the impacts of new culture on them. Apart from this, the employees of XYZ should be encouraged to provide feedback on existing culture of BE for making a common integrated culture.

 Recent activities of BE management can create feelings of discrimination among the employees of XYZ Energy. However, the management should ensure that their activities are impartial. Clarity should be maintained   in every decision. Before implementing a strategy, all employees should be informed earlier. Apart from informing employees, BE management should allow XYZ managers to take part in decision making process. Thus the expertise of XYZ managers will be utilized for attaining business goals. It will also enhance the level of integrity in BE.

Degradation in moral values

Conclusion:  

The current analysis on given case study indicates the management of Big Energy adopted   wrong integration model for executing the tasks related to complete acquisition of XYZ energy. Although some problems related  with cultural  conflict  is inevitable  in case of  such  acquisitions,   improper strategies of  BE management made the problems more evident  in  current  merging. According to the case study, performance of XYZ energy was better than most of the organizations of its category. As two well performing organizations were merging in this case, the new integrated company was expected to one of the best organizations in industry. However, BE management failed to use highly skilled employees of XYZ energy as a result of wrong integration model implementation. As the management is not maintaining communication with   new employees, these employees care becoming less loyal As a result the chances of high turnover among existing XYZ employees can increase. It can hamper long term growth of Big Energy. However, analysis on the recommendations indicates that the management requires taking some actions immediately to avoid further losses.  From the analysis made on existing problems with integration model of Big Energy indicates that the management needs to increase communication with XYZ employees by visiting their office regularly. Apart from this, actions like arranging communication programs among employees of two organizations and  allowing  XYZ employees to participate more  in organizational activities can be effective to the enhance  effectiveness  of the integration.

References

Alvesson, M. (2013). Understanding organizational culture. Los Angeles: SAGE.

Bissell, G. (2012). Organisational behaviour for social work. Bristol, UK: Policy.

Bojica, A. and Fuentes, M. (2012). Knowledge acquisition and corporate entrepreneurship: Insights from Spanish SMEs in the ICT sector. Journal of World Business, 47(3), pp.397-408.

Bruce, M., Collins, S., Langdon, P., Powlitch, S. and Reynolds, S. (2010). Does training improve understanding of core concepts in cognitive behaviour therapy by people with intellectual disabilities? A randomized experiment. British Journal of Clinical Psychology, 49(1), pp.1-13.

Creed, A. (2012). Organisational behaviour. Oxford: Oxford University Press.

DePamphilis, D. (2015). Mergers and Acquisitions Basics. [online] www.univie.ac.at. Available at: https://www.univie.ac.at/aicher/dateien/M&A%20Int%202013-2014%20-%20documents/Mergers_and_Acquisitions_Basics__All_You_Need_To_Know%20-%20Donald%20DePamphilis.pdf [Accessed 4 Mar. 2015].

Epstein, M., Davila, A. and Manzoni, J. (2014). Performance Measurement and Management Control. Bradford: Emerald Group Publishing Limited.

Lee, K. and Pennings, J. (2015). MERGERS AND ACQUISITIONS: STRATEGIC - ORGANIZATIONAL FIT AND OUTCOMES. [online] Available at: https://www-management.wharton.upenn.edu/pennings/documents/Mergers_Acquisitions.pdf [Accessed 4 Mar. 2015].

McShane, S., Travaglione, A. and Olekalns, M. (2012). Organisational behaviour. North Ryde, N.S.W.: McGraw Hill Australia.

Murphy, B. (2013). Organisational Behaviour for Social Work. Practice, 25(2), pp.143-145.

Park, B. (2012). What changes the rules of the game in wholly owned subsidiaries? Determinants of knowledge acquisition from parent firms. International Business Review, 21(4), pp.547-557.

people.stern.nyu.edu, (2015). ACQUISITIONS AND TAKEOVERS. [online] Available at: https://people.stern.nyu.edu/adamodar/pdfiles/papers/acquisitions.pdf [Accessed 4 Mar. 2015].

Roberts, A., Wallace, W. and Moles, P. (2015). Mergers and Acquisitions. [online] Available at: https://www.ebsglobal.net/documents/course-tasters/english/pdf/h17mq-bk-taster.pdf [Accessed 4 Mar. 2015].

Sarris, A. and Kirby, N. (2013). Organisational psychology. Prahran, Vic.: Tilde Publishing and Distribution.

Xenikou, A. and Furnham, A. (2013). Group dynamics and organizational culture. Basingstoke: Palgrave Macmillan.

Ybema, S., Yanow, D. and Sabelis, I. (2011). Organizational culture. Cheltenham: Edward Elgar.

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