Market-driven reforms and mergers

Discuss about the Linking Merger and Acquisition Strategies.

The present research is focused towards understanding the challenges in employee satisfaction in merger and acquisition. The changes in the operations of department impact the productivity and performance of the employees. There are several market-driven reforms or changes, which increases mergers between the business organizations (Schuler and Jackson, 2001). However, if the employees remain dissatisfied after the merger, it hampers the negativity of the firms. The background of the research is the merger between Germany Company WMF and Groupe SEB. The German Group WMF is a popular company in professional coffee machines and cookware. Groupe SEB is a French consortium, specializes in small business appliances. Groupe SEB will significantly benefit from these decisions, such as it can enter the attractive market of professional coffee machines, strengthen its position in cookware and enter new markets. Although it is huge opportunity for both the organizations, they have to create significant synergy between different organizations

In the present competitive market, acquisition can be an attractive growth strategy for the business organizations as it reduces overhead cost, attain synergy in organization’s operations and assist in gathering top talent. These factors result in lack of productivity in the organization. The employees struggle to adopt the corporate culture of the acquiring company, which hampers the productivity of the organization. The workforce integration is a significant challenge for the employees. The integration of the workforce is highly challenging as bridging two workforces means identifying different approaches for long-term operations and working style of the organization.

• To analyze the extent to which the employee satisfaction in merger-environment impacts their productivity
• To analyze the impact of human resource issues in overall profitability of the organization
• To analyze the impact of cultural difference in the performance of the merger and acquisition

Mergers and acquisition have become extremely popular strategy in achieving corporate growth and diversification. However, the performance of merger and acquisition is declines, if the management fails to integrate the culture of different workforce (Rao-Nicholson, Khan and Stokes, 2016). The organization culture of the companies is dependent on the organization culture, HR system and managerial viewpoints.

In the perspective of Björkman and Søderberg (2006) in the present, several business organizations are adopting different strategies to become profitable, flexible, and have a dominant market position. As a consequence, merger and acquisition have become increasingly popular. They are the popular market approach to enter a new market. However, most of the business organizations forget to manage the human resources, which are the most important element of the business organizations. According to the literature, there ae several determining factors of the merger and acquisition deals. It includes legal, financial and operational elements of the deal; however, now the management executives realize that human resources are the key factors, which determines the success or failure of the deal. There are several reasons, which results in the neglect of the human resources issues of the organization. Firstly, he top management assumes that the human resources are soft and difficult to manage, there is lack of awareness regarding the importance of people issue, and the focus of merger and acquisition activities is on the finance, accounting, and manufacturing rather than the human resource management.

Acquisitions: an attractive growth strategy

In the views of Regis (2008) in the merger and acquisition, there are several stages or phases, in which the human resource issues can occur, such as retention of the talent, communication, retention of the senior managers and integration of the corporate culture. These are main stages, and from this, several serious people issues occur, such as evaluation and selection of the manager talent. While integrating the corporate culture of different companies, it is important to evaluate the human resource policies and practices of different countries revise and replace them.

According to Antila & Kakkonen (2008) the first stage of merger and acquisition is the pre-combination stage. In this stage, there are several human resource activities which can impact the success of merger and acquisition of the companies. A significant issue is the first stage is the identifying the reasons to initiate the activity. The acquisition and the retention of the key talent is a major concern during merger activities. Another important issue in merger and acquisition process is developing a completely dedicated team, which can head all the aspects of the human resource activities. In the merger and acquisition activities, the leaders have to consider several different aspects of the management of the integration process. The company should identify the potential companies, which are the most beneficial in the acquisition process. There should be discussion regarding the impact of potential mergers with respect to the company. The selection of the merger and the acquisition company is a critical step, as it will impact the overall success and failure of the organization. The merger and acquisition manager has several different responsibilities, namely, negotiating deals with the talented employees of the company, offering retention bonuses and writing agreements for the employment (Stokes, Liu, Smith, Leidner, Moore, and Rowland, 2016).

According to Brueller, Carmeli and Markman, (2018) in the cross-cultural merger and acquisition ventures, there are several issues related to the corporate growth and diversification. Although it is a convenient and popular strategy, the performance of most of the merger and acquisition strategy has not been successful. The primary reason of the failure of the merger and acquisition is challenge in integrating the different cultures and workforces of different firms. The sociocultural integration between the workforces of different cultures is a significant challenge in the merger and acquisition of the companies.

The research questions of the present research can be formed as:

• What are the human resource issues in the merger and acquisition of the business organizations?
• What are the solutions to address the human resource issues in the business organizations?

The importance of HR in mergers and acquisitions

The research design is an integral part of the research methodology. There are two types of research design, namely, inductive research design and deductive research design. The inductive research design is used when the researcher tries to explore new information related to the research area. In this research design, the aim of the researcher is to explore novel information related to research. On the other hand, in inductive research design, the researcher validates the confirmed facts or provides evidence for a hypothesis. It does not explore any new information; however, provides evidence for previous information. The deductive approach is used with quantitative research methods whereas inductive research approach is used with qualitative research methods. In the present, inductive research approach is used to analyze the HR issues in merger and acquisition (Betley & Noble, 2017). An interview will be conducted with the research participants. The interview will comprise of a combination of close-ended and open-ended questions.

The target population is determined as 10. The research participants will be the HR managers in multinational organizations. The HR managers will have thorough knowledge of the HR strategies adopted during the merger and acquisition of the organization.

The sampling method of random sampling will be used in the research. The random sampling is a sampling technique, in which each research participant has equal chance of being selected in the research. It represents the population in an unbiased manner. It is the simplest form of collecting information from the total population.

In the present, the data collection method of interview will be used in the research. In the interview, several open ended questions will be asked to identify the views of the researcher. It is a qualitative research method. The qualitative research focuses on gathering data and using computational techniques to explain a particular phenomenon (Mackey & Gass, 2015). 

In the present, the data analysis technique of content analysis will be used. The researchers will use themes to analyze the data collected through primary data collection method.

The research data should be reliable and valid, if it should possess any value. The reliability refers to the repeatability of the findings and the validity refers to the credibility of the research. There are two types of validity, namely, internal validity and external validity. The internal validity analyzes whether the research instruments are measuring the exact variables, they were supposed to measure (Neuman, 2014). The external validity examines whether the research results can be generalized beyond the study.

HR issues in mergers and acquisitions

The interview is used as the primary data collection method. In order to assure validity and reliability of the research, the researcher will create an inclusion and exclusion criteria for including the research participants in the team. Further, the research will use the latest information and published sources in the research area. It will assure that the researcher will have access to the latest information in the research subject.

In research, ethical consideration is essential as they assist the research to distinguish between right and wrong actions. The ethical consideration is essential in the research as prevents falsification and fabrication of the data. They create a collaborative environment, which is developed through trust, accountability, and mutual respect. There are several ethical challenges in research as it requires issues related to data sharing, co-authorship, copyright and confidentiality. In research, there are several ethical guidelines such as honesty, objectivity, respect for intellectual property and social responsibility. The biggest ethical challenge is the respect for the human participants. The most common example of ethical consideration in the research involving human subjects is voluntary participants and informed consent. The participants should analyze that all the human subjects are chosen to participate with a free will and the research should not harm the human participants at any cost.

Research ethics assures that the research outcomes are accepted by the society as a whole. It builds trustworthiness of the research. The researcher will abide by ethical considerations, while completing the research. The research will ensure that the confidential information of the research participants is protected. The researcher will also assure that the information used from the work of other authors will be cited and referenced in a proper manner (Marczyk, DeMatteo, and Festinger, 2017). The researcher will present the research outcomes as it is, without any manipulation.

There are certain limitations of the research. The researcher will face time and financial constraints while completing the research. The researcher will face limitations in forming research aims and objectives, implementing data collection method and determining the appropriate sample size.

References

Antila, E. M., & Kakkonen, A. (2008). Factors affecting the role of HR managers in international mergers and acquisitions: A multiple case study. Personnel Review, 37(3), 280-299.

Betley, R. and Noble, I. (2017). Visual Research: An Introduction to Research Methods in Graphic Design. Bloomsbury Publishing.

Björkman, I. and Søderberg, A.M., 2006. The HR function in large-scale mergers and acquisitions: the case study of Nordea. Personnel review, 35(6), pp.654-670.

Brueller, N.N., Carmeli, A. and Markman, G.D., 2018. Linking merger and acquisition strategies to postmerger integration: a configurational perspective of human resource management. Journal of Management, 44(5), pp.1793-1818.

Mackey, A., and Gass, S. M. (2015). Second language research: Methodology and design. Routledge.

Marczyk, G., DeMatteo, D., and Festinger, D. (2017). Essentials of research design and methodology. John Wiley.

Neuman, L. W. (2014). Social research methods. Pearson Education Limited.

Rao-Nicholson, R., Khan, Z., and Stokes, P. 2016. Making great minds think alike: Emerging market multinational firms’ leadership effects on targets’ employee psychological safety after cross-border mergers and acquisitions. International Business Review, 25(1), 103-113.

Regis, R. (2008). Strategic Human Resource Management and Development. Excel Books.

Schuler, R., and Jackson, S. 2001. HR issues and activities in mergers and acquisitions. European Management Journal, 19(3), 239-253.

Stokes, P., Liu, Y., Smith, S., Leidner, S., Moore, N. and Rowland, C., 2016. Managing talent across advanced and emerging economies: HR issues and challenges in a Sino-German strategic collaboration. The International Journal of Human Resource Management, 27(20), pp.2310-2338.