country
$20 Bonus + 25% OFF
Securing Higher Grades Costing Your Pocket? Book Your Assignment at The Lowest Price Now!

Strategic Role Of HR In Mergers & Acquisitions

tag 335 Downloads9 Pages / 2,203 Words tag Add in library Click this icon and make it bookmark in your library to refer it later. GOT IT

Executive Summary

In a merger & acquisition, role of an HR has emerged as a very critical function. At each stage of merger and acquisition process, HR plays a strategic role. The importance of role of HR part in integration of the merged companies should not be taken lightly and should be handled very carefully and with due planning. At pre acquisition stage, due diligence should be taken before the start of the process and HR must carve out its role in this due diligence stage. Cultural compatibility should also be considered before taking any decision regarding integration of the two companies. HR should analyze the cultural similarities and differences between the two companies. Communication also plays an important role in the integration process. If HR does not give due diligence while deciding the strategy for integration of the merged companies then it might sabotage the entire merger and might result in failure of the merger.

Getting Tired of Never-Ending Assignments?

Hire an Expert from MyAssignmenthelp and Get the Necessary Assignment Help at a Reasonable Rate.

Title Page

The report focuses on the strategic role played by HR in a merger and acquisition. In past it has been seen that role of HR has not been given due importance while taking decisions regarding integration of merged companies. This report highlights the strategic role that HR should play in framing strategy for integration of the merged companies.
 

Introduction

In the new global economy, as the rules of business are changing, the rate of growth of Merger and Acquisition has acquired a new pace. According to Mergerstat.com for year-to-date of 2002, there have been 4,363 mergers and acquisitions worth over $291.7 billion. The industry breakdown of the top five is as follows (Mergerstat, 2002)
 
  • Internet – 659 deals worth $ 26.06 billion;
  • Healthcare – 319 deals worth $75.25 billion;
  • Telecommunications – 187 deals worth $11.53 billion;
  • Banking – 146 deals worth $11.04 billion; and
  • Semiconductors – 47 deals worth $2.4 billion.
 
However the growth in mergers and acquisitions and activity around the world, the volume of capital at stake, and the frequency of merger and acquisitions stand in stand in sharp contrast to the failure rate which is being observed.
 

Literature Review

According to study done by KPMG international on mergers and acquisition found that around 75 percent to 83 percent of the mergers fail (PR Newswire, 1999). Here we mean failure as lowered productivity, labour unrest, higher absenteeism, and the l oss of shareholder value. And in some of the cases, it could also be inferred as the well publicized dissolution of combination of the above mentioned factors. As evident from above, human resources could be easily identified as one of the potential factor in M&A failure (A & Shin, 2004) (Sthal & Mendenhall, 2004) (Weber, Shenkar, & Raveh, 1996).With the focus towards integration of human capital during merger and acquisitions, human resource (HR) managers are coming more into the picture, and organisations expect them to play a more strategic role, especially so in the case of extensive organisational changes (Bjorkman & Soderberg, 2003). Today this requirement becomes more important in the terms that the past decade has been characterized by the enormous growth in M&A. The role of HR becomes more and more complex, as HR needs to integrate its own practices and also provide for two more roles i.e. a strategic role for companywide integration and a support role for business unit transaction (Galpin & Herndon, 2000)
 
Every merger and acquisition can be classified into different categories and the issues which become relevant to it are quite dependent on the organisations which are going through the process, and their synergic dependence. According to one of the studies conducted by Mercer Consulting group, some of the key issues which came out to relevance have been explained in the Figure 1 (Harrison). This study analyzed the process of integration on the basis of degree of difficulty and level of importance. Based on this study, the key point which emerges is that addressing the key employee issues become very important, especially so when the mergers are quite large and are strategically very important for maintaining the competitive advantage.
 
A look at the above figure would definitely show the importance and the onus which lies on the HR Department to take the merger and acquisition to a next level of completion.
 

Discussion

Every merger and acquisition leads to the integration of the acquired firm to the culture of the new firm, which basically could be divided in the following four stages:
 
  • Pre Acquisition
  • Foundation Building
  • Rapid Integration
  • Assimilation
 
Every stage of the integration process is the new way forward for HR department to make the acquisition successful. We would take each stage individually and relate it with the strategy to be followed by the HR department.
 

Pre Acquisition

In this stage, HR needs to take due diligence before starting of the activity. Beginning at the start of the process, HR must carve out its role in the due diligence process. The concept to be understood is that due diligence is much more than a financial tool. It’s a tool for assessing the value of human assets, which are not shown on balance sheet, so as to determine the true value of the deal and its likelihood of the success.
 
First step which needs to be taken is to identify the key peoples and to take immediate steps to keep them engaged with the organisation, even after the deal has been finalized. This means that each business unit needs to be understood, be it the field organisation of stores or be it the process for sales people. It’s very important to keep in mind the importance of the field, which is often overlooked during the integration process. Each key individual should be assessed against a set of clearly defined competencies, which would be based on the needs of the new group.
 
The key areas which emerge for due diligence by HR could be as follows:

  • Culture
  • Employee demographics and Competency Analysis (Based on requirements of new group)
  • Key Talent Analysis
  • Compensation and Benefit structure to be adopted, its measure with the existing company and how does it aligns with the parent company
  • Any legal issues such union contracts, pending employee litigation or worker’s compensation etc.

 

Methodology

Apart from the above mentioned areas, it’s also important to identify and determine the roles needed and identifying the best people who are most suited for them. Most of the times, pivotal people in the organisation, get lost because staffing decisions are made without any plan, without giving thought to equitable process of assessment, and without taking the future needs of business into consideration.

 

Culture Compatibility

 
An important aspect of the pre acquisition strategy is to understand the similarities and differences between the two companies at the outset, so as to compatibility could be determined at the initial stage itself, and relevant decision regarding merger and acquisition could be taken.

A 2006 white paper from the Economist Intelligence Unit revealed that 67 percent of survey respondents pointed to cultural integration as both the most important people issue and the most critical success factor in an M&A deal (Bundy & Hukins, 2009). More recently, a report from the Economist Intelligence Unit titled M&A Beyond Borders: Opportunities and Risk, in conjunction with Mercer, found that organisational culture differences and human capital integration issues ranked as the two most significant challenges faced by respondents in recent transactions.

HR could play vital role in this aspect, as it’s the only function which is equipped enough for determining the compatibility. Some of the key areas which need to be focused during this stage could be as follows:
 
  • History of the company, its reputation in industry, and its product and services
  • Where does the authority lies within the company, is it bureaucratic or freewheeling etc
  • Emotional element involved i.e. what does the employees think about company, management and future? What employee behaviors are the norm and what values and beliefs are behind those norms?
It’s imperative to identify the cultural areas of dissonance, so that people can dispel misconceptions and begin creating a culture that’s right for the new organisation. If this step is not taken at the onset of the process itself, then it’s quite possible that it could become major point of conflict at the later stage.

 

Integration Planning

Any merger and acquisition would not be able to reach to its goal, unless and until a clear plan and timetable is not assigned to it. The plan needs to be broken down by the different functions:
  • What needs to be done?
  • Who’s going to do it?
  • When it will be complete?
This means that integration efforts need to be undertaken by a full time dedicated team. There should be fixation of responsibility on an integration project manager, who would be free from all the routine responsibilities. The integration project manager would be requiring a special set of competencies such as program management, broad experience in parent company business, and specific functional expertise relevant to the new business. Hence the primary responsibilities which need to be taken care by HR during this phase would be to:
  • Developing the strategies for retaining people
  • Examining compensation and benefit programs
  • Identifying the barriers to a merged culture
  • Creating and implementing a plan for establishing the communication with the newly merged organisation

 

Findings

Based on the above responsibilities, following strategy needs to be adopted by the HR Team during the whole process:
  • The HR team that is in charge of the culture integration must start by building a clear view of the context of change and the rationale behind the M&A. It must ensure that all parties have a full and comprehensive understanding of the context of the deal and the outcomes that need to be achieved.
  • Next they need to determine the degree of integration in two parts. First, translate the understanding of the deal in terms of the target operational integration. Second, determine the extent of cultural integration required to achieve that operational integration.
  • Then clarify the specific behaviors required to run the combined business and include a behavioral assessment of each organization and an assessment of their combined future state. Follow this by proposing the culture change hypothesis – specifically, what changes in behaviors must take place to successfully run the post-deal business.
  • Next identify the drivers needed to influence those behaviors, design the drivers (initiatives) and then implement those drivers through an effective change management process. Finally set up an appropriate measurement system and reinforce the cultural changes.

 

Communication

According to a recent Mercer Transatlantic Study, 75 percent of executives surveyed said that communicating with employees and harmonizing corporate culture were the most important factors for post merger integration. Business leaders recognize that they often fall short in this area (Peterson & Voules, 2007).

The need to communicate is not only required in the later stages, but must be integrated in the whole process from the outset itself. Most of the times, communication efforts from the companies are fragmented with different information and messages going out to investors, employees, managers and customers. Hence, it becomes must that message to all stakeholders must be well planned and consistent in its approach.

One of the communication strategies which could be used during the whole process has been provided by the Mercer Consulting Group, which has been given below:
During the whole process of communication, the objective of communication should be not only to inform, but also should be to engage the employees hearts and minds. By envisaging the clear vision of the future and gaining commitment to it, the new company would be able to build the loyalty which is critical for the company.
 

Synergies

Usually with the help of mergers and acquisitions, companies try to find two synergies:
 

Growth

In this phase, role of HR is to identify the key human resources in the acquired company, setting up retention strategies to retain the critical talent, and to create the development plans for the people to prepare them to achieve the required corporate growth. Other issues which would need consideration would be reward and recognition programs, team development, and integration of compensation and benefit programs, so as to ensure the competitiveness to attract and retain the desirable employee.
 

Economies of Scale

Most of the times, it has been linked to firing of people. However, for us, achieving synergy, analyses must be done to understand that what the end-game organisation would look like and which positions are truly needed. Once this stage is completed, assessments must be done to decide who would remain and who would leave the organisation.

 

Conclusion & Recommendations

With the increase in the mergers and acquisitions with improving of world economy, a whole plethora of opportunity lies before HR function to get properly involved in the activity and earn its long terms dues back from the companies. And to attain it, HR function always need to be proactive, and should take initiative on its own to attain this result.
Download Sample

Get 100% money back after download, simply upload your unique content* of similar no. of pages or more. We verify your content and once successfully verified 100% value credited to your wallet within 7 days.

Upload Unique Document

Document Under Evaluation

Get Credits into Your Wallet

*The content must not be available online or in our existing Database to qualify as unique.

Cite This Work

To export a reference to this article please select a referencing stye below:

My Assignment Help. (2015). Strategic Role Of HR In Mergers & Acquisitions. Retrieved from https://myassignmenthelp.com/free-samples/strategic-role-of-hr-in-mergers-acquisitions.

"Strategic Role Of HR In Mergers & Acquisitions." My Assignment Help, 2015, https://myassignmenthelp.com/free-samples/strategic-role-of-hr-in-mergers-acquisitions.

My Assignment Help (2015) Strategic Role Of HR In Mergers & Acquisitions [Online]. Available from: https://myassignmenthelp.com/free-samples/strategic-role-of-hr-in-mergers-acquisitions
[Accessed 15 August 2020].

My Assignment Help. 'Strategic Role Of HR In Mergers & Acquisitions' (My Assignment Help, 2015) <https://myassignmenthelp.com/free-samples/strategic-role-of-hr-in-mergers-acquisitions> accessed 15 August 2020.

My Assignment Help. Strategic Role Of HR In Mergers & Acquisitions [Internet]. My Assignment Help. 2015 [cited 15 August 2020]. Available from: https://myassignmenthelp.com/free-samples/strategic-role-of-hr-in-mergers-acquisitions.


MyAssignmenthelp.com boasts a pool of 3000+ experts from different backgrounds, who are solely dedicated to providing premier quality assignment help. Due to the diversity in our expert team, we are capable of providing academic assistance in more than 100 subjects. Some of our popular services include math assignment help, economic assignment help, accounting assignment help, statistics assignment help, law assignment help and more at a reasonable price.

Latest Management Samples

PPTCH04 Business Law

Download : 0 | Pages : 3
  • Course Code: PPTCH04
  • University: Hong Kong University Of Science And Technology
  • Country: Hong Kong

Answer: Introduction Alternative dispute resolution is a process to addresses conflict between parties out of court. There are various processes through which ADR can be carried out. These processes come with their own features, advantages and disadvantages. The paper discusses the various alternatives which are available to the parties in a dispute when it comes to solution. The three primary kind of ADR which are available to the parties to...

Read More arrow Tags: United States Boston Management health finance management  University of Boston 

F-601-0556 Marketing Principles For Micro And Macro Environmental Factors

Download : 0 | Pages : 15
  • Course Code: F-601-0556
  • University: UK College Of Business And Computing
  • Country: United Arab Emirates

Answer: Introduction  Marketing principles are the widely used strategies used by organizations for optimizing the market performance of existing products and successfully launching new products (Sok, O’Cass and Sok 2013). The study is provides a complete understanding about the marketing principles adopted by Toyota for getting success in the market. In task 1, the study will discuss various marketing elements and evaluate the mar...

Read More arrow

AS1 Individual Report

Download : 0 | Pages : 12
  • Course Code: AS1
  • University: University Of Northampton
  • Country: United Kingdom

Question: Introduction The following report is based on the incorporation of digital marketing strategies into JCW’s business. JCW is a supplier of risk management, audit professionals and regulatory compliance to the clients across the industry. The purpose of the report is to develop a digital marketing strategy besides the existing offline communication strategies for JCW. The report also provides suitable e-marketing theory that hel...

Read More arrow

AS1 Individual Report

Download : 0 | Pages : 12
  • Course Code: AS1
  • University: University Of Northampton
  • Country: United Kingdom

Question: Introduction The following report is based on the incorporation of digital marketing strategies into JCW’s business. JCW is a supplier of risk management, audit professionals and regulatory compliance to the clients across the industry. The purpose of the report is to develop a digital marketing strategy besides the existing offline communication strategies for JCW. The report also provides suitable e-marketing theory that hel...

Read More arrow

AS1 Individual Report

Download : 0 | Pages : 12
  • Course Code: AS1
  • University: University Of Northampton
  • Country: United Kingdom

Question: Introduction The following report is based on the incorporation of digital marketing strategies into JCW’s business. JCW is a supplier of risk management, audit professionals and regulatory compliance to the clients across the industry. The purpose of the report is to develop a digital marketing strategy besides the existing offline communication strategies for JCW. The report also provides suitable e-marketing theory that hel...

Read More arrow
Next
watch

Save Time & improve Grade

Just share Requriment and get customize Solution.

question
We will use e-mail only for:

arrow Communication regarding your orders

arrow To send you invoices, and other billing info

arrow To provide you with information of offers and other benefits

1,386,698

Orders

4.9/5

Overall Rating

5,086

Experts

Our Amazing Features

delivery

On Time Delivery

Our writers make sure that all orders are submitted, prior to the deadline.

work

Plagiarism Free Work

Using reliable plagiarism detection software, Turnitin.com.We only provide customized 100 percent original papers.

time

24 X 7 Live Help

Feel free to contact our assignment writing services any time via phone, email or live chat.

subject

Services For All Subjects

Our writers can provide you professional writing assistance on any subject at any level.

price

Best Price Guarantee

Our best price guarantee ensures that the features we offer cannot be matched by any of the competitors.

Our Experts

Assignment writing guide
student rating student rating student rating student rating student rating 5/5

752 Order Completed

100% Response Time

Hugh Cleave

Masters in Human Resource Management (MMgt, HRM)

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

2279 Order Completed

97% Response Time

Zachary Perez

PhD in Computer Science and Information System

Washington, United States

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1692 Order Completed

98% Response Time

Alfred Dodd

PhD in Computer and Information Science with specialization in Database

Wellington, New Zealand

Hire Me
Assignment writing guide
student rating student rating student rating student rating student rating 5/5

1896 Order Completed

95% Response Time

Herman Berens

MSc in Psychology

London, United Kingdom

Hire Me

FREE Tools

plagiarism

Plagiarism Checker

Get all your documents checked for plagiarism or duplicacy with us.

essay

Essay Typer

Get different kinds of essays typed in minutes with clicks.

edit

GPA Calculator

Calculate your semester grades and cumulative GPa with our GPA Calculator.

referencing

Chemical Equation Balancer

Balance any chemical equation in minutes just by entering the formula.

calculator

Word Counter & Page Calculator

Calculate the number of words and number of pages of all your academic documents.

Refer Just 5 Friends to Earn More than $2000

Check your estimated earning as per your ability

1

1

1

Your Approx Earning

Live Review

Our Mission Client Satisfaction

Awesome work. Awesome response time. Very thorough & clear. Love the results I get with MAH!

flag

User Id: 383727 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

Work was done in a timely manner took it through grammarly checked for plagiarism very well satisfied

flag

User Id: 463334 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

Great work for the short notice given. Thank you for never disappointing and helping out.

flag

User Id: 194216 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating

I received a full point on the assignment. Thank you for all the help with the assignment.

flag

User Id: 411395 - 31 Jul 2020

Australia

student rating student rating student rating student rating student rating
callback request mobile
Have any Query?