Cultural differentiation in merger and acquisition creates a huge problem for the newly formed organisation. The area of business handling is big in that case and extreme difficulty in language corporate culture, etiquettes all these are relevant in that case to differentiate those. Recruitment is one of the important concerns in this aspect. The reason behind the problems is the accumulation of people from both the companies and their work in couture. The new venture has started their business in New York City. Thus European culture needs to be shifted in the US and that impact on the corporate change in etiquettes and behavioural approach of the new company. The mega-company DeWall BioHealth takes care of the drug-related products and different medications. The projected revenue of the merged company was $8 billion. But the issue regarding the recruitment strategy and policies taken by the company is the main concern of that report.
The conflicting values of Europe and American culture are the prime issue in that case and their employees’ relationship etiquettes, work cultures all these are important and relevant in that report. The issues are relevant enough to make some compliance changes in the management and to form a better human resource strategy to recruit some effective employees.
There are some issues in case merger and acquisition as more than one company is involved with the process. The issue in law compliance, cultural and communication obstacles, political support and market penetration in the different market all these are relevant in that case. Management wants to curtail their numbers of employees from 120 to 65. The senior-level employees are the asset for the company, but the company needs to do that call for the sustainable development of the merged organisation (Tait et al., 2013). The problem in corporate culture is different in both the nature and people from Europe face lots of trouble at New York, the change in culture impacted on their individual performance as well. The timing of the workplace is also different. Employees have different work culture as well and they are accustomed to the process. The transaction n and business dealing is also different in different nations. Dependability, reliability, loyalty, commitment, consistent, honesty, efficiency and business corporate mindset are important in that issue and core values of the business will help the entire process to move on and make some good decision that strengthens the business outcome (Roche, Propeck-Zimmermann & Mericskay, 2013). In this case study serious decision making and analysis of business outcome is important and that initiated with the country’s economic condition. Leading in the HR strategy and global marketing, different marketing thoughts are raised from the two leaders and operation policy maintenance is a challenging situation in that case.
Alison, sales and marketing head of BioHealth informed the CEO of the organisation that people may leave the organisations when they would be redundant after getting new offer from other organisations. Kaspar has no sense of urgency in mitigating the issues of recruitment and formulating the HR policies. However, Steve wanted to solve the problems immediately even if the policies are not suitable for both BioHealth and DeWaal. Steve had concerned with the current conditions of the organisation and he wanted to formulate new framework for the organisation after the merger. Steve always wanted to retain the senior and tenured employees of both the organisations as after the merger, senior employees are needed. As stated by Ahmmand et al., (2016), after the merger, organisation’s management always tries to increase the shareholders’ values and it could be rewarding policies for the employees. Retaining the tenured employees is not an easy tasks; therefore, the management tries to start the rewarding the policy so that the organisation can work faster. In case of merger, speed is one of the important factors. Christian follows the sense of urgency in HR work and urgency is needed when an organisation follows the merger. As argued by Armano & Reger (2013), post-merger integration is a complex process of rearranging and combining the potential of the organisation. Post-integration is the process of synergies which usually motivate employees to do something good. Steve wanted to accelerate the post-merger integration period by working faster to manage the people, tasks, resources and supporting information technology. Netherlands and the USA are two different countries and the workplace culture of the organisations is also different. Clash of the companies’ culture is quite evident from the perspectives of the employees and leaders of the organisations need to understand the culture-specific questions.
Kaspar and Steve could not understand the actual structure of the organisation after the merger and both the leaders also could not understand staffing process. Staffing process is a major chaos between the two leaders; Steve wanted to make faster the process of recruitment. Bruce was the head of HR in BioHealth and Brice was not a type of guy who was workaholic. On the other side, Kaspar wanted to make Christian Meyer as the head of HR after the merger. At first Steve agreed that Bruce can be demoted as the director of corporate training. Before recruitment and the corporate structure of the organisation, both the leaders of the organisation need to develop the profit and loss statement and understand the weaknesses and strengths of the workforce. Both the leaders discussed about the multiple options forgetting the work process. In merger process, staffing is very much important as employing right set of people and develops the requited skills through the training. The staffing focuses on improving and maintains the empowerment. According to Banks (2015), staffing is the crucial resources for the organisation after merger and it is needed to hire the good employees. It is not always needed to recruit best employees or skilled employees for the organisation; however, it is needed to recruit the experienced employees after the merger. During the recruitment, the management needs to understand the IQ and emotional intelligence of the employees. In addition, Steve and Kaspar need to understand the organisational structure to follow so that they can send the command in a hierarchy basis. Steve wanted to give a structure to the organisation as it can improve the flow of work. The process of integration after the merger also watched when the two leaders are involved in the closure of the operation in plant of Indonesia for BioHealth. Being on the top of the management, it is needed to share the behaviour can set up the authority. Formal outline of the organisational structure makes the process easier and it adds new positions within the organisation. Therefore, it also leads to the ready and flexible implementation of staffing.
There was no sense of urgency for Kesper so this was a huge blow for the organisation as the leader takes lots of time to think over the situation. There was a problem in decision making and that initiate a loss in human resource. Selection of efficient employees is the major aspect in that case but the sense of right decision making at the right time is also important from the organisational perspective to have a right employee at the right place. On the other hand, Steve wanted all these things in a hurry. As the merger situation getting placed so time and speed are important for the development of the business. In that situation, Steve will think and accept the layers of vulnerability to accomplish the process. Fast decision making is not always productive from the organisation perspective and engagement with employees will curtail at that moment. So recommended fairness in organisational decision making is needed along with the issues of loyalty, decision making and factors identification are important in that aspect (Wright et al., 2012). The process of feedback taking is also considered as the recommended view in that case. The legitimate way of role identification and manage every job role in a proper order will be the recommended prospect of organisation development. The integration of productive identification and race of getting a selection of employees is the key issue in that case (Parsaei & Sullivan, 2012). The process of benchmarking and manage to retain effective employees at the right position is the key concern at that place, the external condition and business challenges help to find out the role and perspective of business identification and getting decision making will help the business for the final decision making. Fair recruitment system needs to introduce so that ethical alignments will direct in a right way (Griffin, 2013). Training and research procedures need to be implemented so that effective growth will increase day after day. It shouldn’t be any haphazard manner of decision making, rather decisions are taken on the base of previous knowledge and experience.
The process to be recommended for the two senior executives and their HR people follow to work out the details of the integration
The merger between BioHealth Labs and DeWaal Pharmaceuticals brought forth many issues and the two key senior executives Steve Lindell and Kaspar have been trying to solve the problems. Work out processes of integration of two organisations’ merger is as follows:
Implications of decisions made today: As stated by Greve & Man (2017), there are three stages of the merger when two organisations merge together, first one acknowledges and acceptance phase before the merger, transition phase just after the merger and lastly, gestation phase. Two key leaders of two different organisations must not take the haphazard decisions. Haphazard approach symptoms are the lack of merger strategy which may articulate the lack of a strategic goal. There is a lack of decision criteria to measure the degree about the potential target organisations. The key leaders of both organisations take the siloed decision which may exclude key perspectives from within the firms which may foster the sense of distrust between two senior leaders. Therefore, after the merger, the leaders need to take the decision in fact-based, not on the assumptions. Governance Board can be made by the two leaders and the role of the board would be the set and maintain the strategy and policy of the organisation. The Board can also approve the merger procedures and process. The organisation must have the resources and resolve the issue arising from the merger. DeWaal and BioHealth both need to under their respective financial measures, intellectual property, human capital and technology brands and the synergies. Therefore, the decisions must be taken by the two leaders based on the facts fast and not performing the delay.
Bring in outside help: Two key leaders of DeWaal and BioHealth can opt to take the outside help in order to solve the problems of making the employees redundant. First of all, the leaders can take help of the lawyers to know the process of making the people redundant. Second, the leaders of the organisation can take the help of talent assessment technique so that the leaders can understand who the better performers are. The leaders can provide the gestation period to the employees after the merger and the leaders can ask the HR professionals to take the talent assessment.
Change the behaviour: During the transition period after the merger, the leaders need to check the employees’ ‘all about me’ attitude and the employees must be asked to be open to all culture. The merger brings two different cultures, work habit and workplace norms into one single whole. Therefore, changing the needed behaviour for the employees is very much needed and the leaders should propagate the team working (Brueller, Carmelli & Markman, 2018). In the transition period, the leaders should as the employees to take the responsibilities in their daily work.
Training on cultural assimilation: Steve and Kaspar both should ask the employees to take the training for improving cultural competence. Cultural competence means an ability to effectively interact with employees of different cultures (Durand, 2016). With the amalgamation of different cultures both European and American, it would become imperative for the employees to have some form of cultural assimilation training.
Fair recruitment: After the merger, both the leaders need to take the fair recruitment policy for recruiting more potential employees. Employees from both the organisations are already there, fair recruitment policy will help to recruit right employees. The leaders need to draw the seniority list so that they can retain those employees.
The Netherlands and The USA are two countries from which both the organisations belong. Hofstede cultural dimensions provide an understanding of the cross-cultural communication. Hofstede describes the effects of society’s culture on the organisation (Mazanec et al., 2015). The Netherlands scores low on the power distance dimension as Dutch people believe in to be independent, equal rights, superior accessible and the management facilities with empowerment. In Individualism, Netherlands scores higher than the USA as the Netherlands has a loosely-knit social framework. Employer and employee relation in the Netherlands has a mutual advantage. USA employees would not tolerate the unorthodox behaviour in the workplace where time is only money. Steve and Kaspar both have to understand the needs of the employees on the values of the members. The leaders and the HR professionals need to pay the value on the employees and these values may relate to the behaviour using the structure derived from the factor analysis.
BioHealth and DeWaal have been facing the issue of inefficient management where both leaders cannot understand the recruitment policy. Inefficient management theory is similar to the managerial efficiency; both the companies, in this case, belong to the same field. In addition, management control is always not possible to manage the asset efficiently; however, mergers can be done with the necessary supply of managerial capabilities. Kaspar is not competent enough to understand the role of the employees after the merging. The leaders within the organisations show the incompetent in the complete sense (Waring, 2016).
After the merger, the organisational leaders and the HR professionals of the organisation need to understand the synergy. As stated by Waring (2016), synergy means to the type of reactions which occur when two different factors combine to create greater effect together than that sum of the two independent operations. Therefore, BioHealth and DeWaal need to combine their synergies so that they can be more profitable in an individual case. The companies have to create great shareholders’ value so that they can use the synergies. BioHealth and DeWaal can use mainly two types of synergies which are operating synergy and the financial synergy.
Conclusions
It has been noted that after the merger, DeWaal and BioHelath organisations face the issues of integration of the merger between these two companies. The first conflict comes in the reduction of the top management in the merger from 120 to 65. In addition, Kaspar and Steve cannot decide whether they let the employees go or keep them within the organisation. BioHealth has been facing the issue of leading brokerage which is degrading stock from buy to hold. The organisations have been facing the issue of dealing with merged Research & Development and potential plant closure is the sensitivity issue. Therefore, solving the problem comes from the cultural assimilation from both organisations’ employees, employee behaviour, training and the fair recruitment policy.
References
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