I. Introduction
Merger and Acquisition happen all the time. But many companies unable to stimulate growth post mergers due to conflicting corporate cultures. Managing human resources means managing the people and cultures. In merger and acquisition (M&A), it is not merely as easy as putting two cultures into one bowl. Instead, it challenges the management to consider any possible culture clash, address employees concern due to management change, and the need to define the new company’s directions. Although managing cultures can ensure the smooth transitions in M&A, many executives regard managing culture is a low priority compare to the financial deals and strategic aspects (Marks & Mirvis, 2011).
In an article “A framework for the human resources role in managing culture in mergers and acquisitions, Mitchell Marks and Philip Mirvis shows the importance of “cultural endstate” as a framework to guide the company’s transition. They highlight four types of distinct cultural endstates—Pluralism, Integration, Assimilation and Transformation (Marks & Mirvis, 2011). What they mean by “cultural endstate” is the company’s new direction post the merger. Using the framework, this essay attempts to analyze the strategy to address issue of resistance to change due to merger and acquisition.
II. Merger & Acquisition and the cultural change
Merger and Acquisition indicates the change in management and corporate culture. Culture implies the way groups of people perform to align with the company’s value. In other words, “Culture encompasses the way things get done in an organization” (Marks & Mirvis, 2011). It also means that corporate culture; which exhibits shared values, roles, norms and ideologies, will highly influence behaviors and att...
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... Jad Mouawad explains, “Delta scored a major point by getting its pilot unions to agree to a common contract by the time the merger closed. Many analysts said this gave the airline a critical advantage by getting a crucial labor group on board from the start” (New York Times, 2011).
Establishing accountability
Review, revise, refocus
Works Cited
Jackson, S. E., Schuler, R. S., & Werner, S. (2012). Managing Human Resources (11th ed.). Mason, OH: South-Western.
Marks, M. L., & Mirvis, P. H. (2011, November). A framework for the human resources role in managing culture in mergers and acquisitions. Human resources management, 50(6), 859-877. doi:10.1002/hrm.20445
Mouawad, J. (2011, May 18). Delta-Northwest Merger’s Long and Complex Path. The New York Times. Retrieved March 16, 2014, from http://www.nytimes.com/2011/05/19/business/19air.html?pagewanted=all&_r=0
fail (Cheng, 2012). Mergers and acquisitions are much common in these days and only a few of them are end up in successes. Even though mergers and acquisitions are not result much successes rate, many organizations are still preferring it because, it is used as a cooperative strategy but nowadays it is used for cooperative development. The cultural differences and merger integration can be considered as an important factor for the failure rate but this study mainly focused
...been. The merger was facing antitrust review and on top of that the Northwest unionized pilots could not reach an agreement. In Oct 2008, an agreement was reached and all pilots from both sides received pay raises and Delta acquired Northwest Airlines for 2.8 billion dollars. This was considered one of the largest deals in the industry and made Delta number one in the world in terms of destinations (Anonymous, 2009).
The merger was the crowning achievement of Marcus Loew, a self-made business tycoon (Hay 10). Marcus Loew, born Max Loew, was born in New York to Australian-Jewish Immigrants. Loew grew up in poverty and had dropped out of school at the age of 9 to help support his family (Edwards para 1). He was a very ambitious child. He was uneducated but he worked his way up from meaningless jobs to high paid business man through real estate investments (Edwards para 2). He started at a meager job at a fur busi...
Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2014). Fundamentals of human resource management (5th ed.). New York, NY: McGraw-Hill Education.
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate clinical and managerial interventions.
Mathis, R. L., & Jackson, J. H. (2010). Human resource management (13th ed.). Mason, OH: Thomas/South-western
The soft factors can make or break a successful change process, since new structures and strategies are difficult to build upon inappropriate cultures and values. These problems often come up in the dissatisfying results of spectacular mega-mergers. The lack of success and synergies in such mergers is often based in a clash of completely different cultures, values, and styles, which make it difficult to establish effective common systems and structuresBased on the case study, extensive research and annual reports of AT&T the writer has mapped AT&T in the different domains. AT&T should strive to attain a perfect circle as close to the centre as possible, which indicates total synergy, order and equilibrium. Where the circle is skewed drastic change is needed as it moves closer to the outer ring of chaos:
Organizational cultural is the system of shared beliefs and values that develops within an organization and guides the behavior of its members, while organizational structure is an expression of social and economic principles of hierarchy and specialization (Kinicki, 2015). Both the culture and the structure of an organization are important things for management to understand in order to successfully set and achieve an organization’s goals. Companies who excel in highly competitive fields can attribute their successful economic performance to a cohesive corporate culture that increases competiveness and profitability. This culture is best utilized in an organization that has the necessary structure to allow its employees to coordinate their
Triandis, H., & Wasti, S. (2008). Culture. In D. Stone, & E. Stone-Romeo, The influence of culture on human resource management processes and practices (pp. 1-24). Psychology Press
Delta Airlines has been a vibrant company in the airline industry, with great success over the years. Delta airlines started as a crops dusting company to serving more than 572 destinations, in 65 countries on six continents (Allan, H., David. H. ,2012). Delta airline moved its headquarters from Monroe, Louisiana to the city of Atlanta, Georgia. The great management strategies have portrayed from time to time to be fruitful even in the verge of a recession. With these consistency in delivery of services, it is clear that the company is out to outdo its competitors and turn out to be the greatest airline in the world.
This was a sad day for everyone in both the immediate and extended “Delta family,” a day perhaps as sad in its own way as the death of Mr. Woolman almost 40 years before. The sadness mixes with fear by employees and retirees, their families, stockholders, customers, vendors, taxpayers, governments and all others among the tens of thousands impacted by the bankruptcy. Leadership decisions by Delta’s Board and CEO’s over a long period of years laid the foundation for Delta to be in a position where the factors would have a large enough impact to result in bankruptcy. By promoting Ron Allen to CEO, primarily because he had moved up the chairs in the company through Beeb’s efforts, the Board showed their lack of awareness of the need for a strategist to deal with the fundamental changes taking place in the airline industry. Then the Board brought in Leo Mullin and gave him free rein for 6 ½ years to turn a cash rich company into one in such poor shape financially that his successor had to turn to expensive sources of money to keep the company
Conflict seems inevitable when trying to merge two companies. Conflict is described as the “Process which begins when one party perceives that the other has frustrated or is about to frustrate, some concern of his” (Kumar, 2009). Synergon’s CEO uses a “take no prisoners” approach and would fire most of the management team within 12 months of taking over a company using an approach they call neutron bombing. In cases where both companies are successful, like in the case of Synergon Capital and Beauchamp, you add even more conflict. The managers of Beauchamp are used to operating in a positive way that has produced profits for the company and you add Nick Cunningham a manager of Synergon who is used to restructure management in newly acquired poorly run companies; something has to give to make it successful.
However you define the activities of management, and whatever the organisational processes are, an essential part of the process of management is that proper attention be given to the Human Resource function. The human element provides a major part in the overall success of the organisation. Therefore there must be an effective human resource function. In the past, most organisations viewed Human Resource Management (HRM) as an element function, that is an activity that is supportive of the task functions and does not normally have any accountability for the performance of a specific end task. Because of the emphasis on analysis and precision there is a tendency for strategists to concentrate on economic data and ignore the way in which human elements and values can influence the implementation of a strategy. 'Economic analysis of strategy fails to recognise the complex role which people play in the evolution of strategy - strategy is also a product of what people want an organisation to do or what they feel the organisation should be like.?(1).
I have assisted Dr. Whitsett of the University of Northern Iowa psychology department in the writing of his book on merging companies with different organizational cultures. For Dr. Whitsett, I selected and condensed pertinent information from audio-taped organizational interviews. Dr. Whitsett's book has not yet been submitted for publication. My research experience will be expanded during the spring, when I will be assisting Dr. Whitsett with a research endeavor on Vroom's Expectancy Theory. I will also be a teaching assistant for Dr. Whitsett's psychology research methods class.
It brought organisational culture to the performance of a company, which has become a critical topic in management department. In addition to organisational culture, organisations need to be aware and prepared for changes in the expanding workforce as business grows. Companies are faced with maximizing benefits as well as profits while minimizing negative factors that come from those changes. There is no one answer to the issue, but some of the guidelines are clear. Awareness of organisational culture, teamwork, individual performance, external environment adaptation, leadership, and measurement of organisational culture are key factors that lead a company to perform better.