Case Study of Mergers Between Companies

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Recommended: Affect of mergers on employees

A merger is the combination of two or more companies into one new company or corporation (REF). Mergers can occur for several reasons, however, most of the time there is a strategic rationale to it. Just like the companies which shall be discussed throughout this report. When a merger is taking place between two organizations, normally there are certain complications that arise during that merger. Such as uncertainty, anxiety, fear and turnovers among the working staff. This report seeks to give a summarised example of companies that have gone through mergers and the issues that they have faced. Moreover, identify the issues presented in the case study and give recommendations for those issues.
Summary of article
The “communications with employees following a merger: a longitudinal field experiment” article illustrates that there are a few dysfunctions that occur during the process of a merger and acquisition – pertaining to both new and current employees. The dysfunctions mentioned are global stress, poor performance, absenteeism, turnovers, poor job satisfaction, poor organisational commitment and a poor perception of the company’s trustworthiness, honesty and caring. In attempts to remedy the dysfunction, research was conducted in two light manufacturing plants owned by one of two merging fortune 500 companies. The experiment involved two independent mechanisms, the first was implemented at the experimental plant while the other at the control plant. The first is called; realistic merger preview and the latter is the traditional way of handling mergers and acquisitions. Managers within the experimental plant provided honest information to their employees about the mergers, they handled employees fairly and they answered all qu...

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...iduals he will place in the new team and the actions he will take against the old team, it leaves workers in an unstable state; for they know not where they stand. Moreover, as Bob is trying to convince the Key members in the CRL gold division that the bushwhacker way is the way to go, rumours are bound to start circulating, causing uncertainty, anxiety, and disappointment among the worker. Managers and employees lose 15% of effectiveness as a result of rumours, moreover, turnovers and absenteeism increase (Gitelson and Laroche 2009, par 5). It would be advised for bob to apply the realistic preview model; for the realistic preview model serves as a rectifier in such situations. According to the article, it stabilises the dysfunction and uncertainty by providing honest information to the employees about the mergers and answering all the questions that trouble them.

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