The Difference is in the Design

HR's Role in Mergers and Acquisitions

Pick up any major U.S. newspaper on any given day, and you'll see headlines about the latest merger or acquisition.

For instance, Sprint and MCIWorldCom recently announced a possible merger. In Kansas City, the news media focused on the construction of Sprint's new world headquarters in Overland Park, Kansas and speculated about the impact of the merger on  more than 14,500 Sprint employees in the metro area. Would the state-of-the-art campus be completed? Would jobs be lost? 

When a merger is announced, company employees become concerned about job security and rumors start flying. Morale and productivity can take a nose dive. Combining two companies into one can create interpersonal conflict, role confusion and uncertainty about change. According Mitchell Lee Marks, a management consultant and author of the book Strategic Combination: Building Productive Capacity in Acquisitions and Alliances, human resource professionals should take an active role in educating senior executives about HR issues that can interfere with the success of the merger and with meeting key business objectives.

Marks recommends some effective ways that human resource professionals can help smooth the transition:
Facilitate transition teams. Transition teams are used to study and recommend options for combining the two companies in a merger. To discourage decision-making based on personal agendas or politics, human resource professionals who facilitate transition teams should work with team leaders to run effective meetings. This will give all team members an opportunity to contribute their viewpoints.    
Educate managers and employees. To minimize stress and uncertainty in the organization during the merger process, develop and deliver educational seminars to help employees and managers manage stress, low morale and productivity issues in work groups. These seminars should focus on specific issues affecting employees rather than on change management in general.
Develop newly formed teams. After the merger is implemented, problems may arise as new teams are formed. These teams may experience interpersonal conflict, unclear roles and responsibilities and confusing procedures as leaders move ahead on operational tasks. Create a process to develop newly formed teams. Review this process with managers and supervisors, and offer to help launch new teams by providing consultation.
Reinforce the new culture. When two companies with vastly different cultures merge, help management preserve the best aspects of the old company and carry them into the new company. Find out what cultural characteristics and values senior executives want to preserve from their respective companies, what they don't want to keep and what new characteristics they want to introduce in the new organization. Make a list and ask each level of management for feedback. Provide management with a development tool. Survey all levels of management about three months after the merger, to assess progress toward the new culture and provide feedback to managers.

HR professionals can play an active role in the change process by offering interventions that will help ensure a successful merger.

References:

Greengard, Samuel. "You're Next! There is No Escaping Merger Mania." Workforce, vol. 76 (April 1997): 52.

Leonard, Bill. "Will This Marriage Work?" HR Magazine, vol. 44 (April 1999): 34.

Marks, Mitchell Lee. "Let's Make a Deal." HR Magazine, vol. 42 (April 1997): 125.

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Timely Topics is written by Audrey Choden. Please send questions or comments to achoden@trainingbydesign.com.

 

 

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Last modified: August 11, 2005