Case Study: Who Goes, Who Stays – The Merger Of De Waal Pharmaceuticals And Bio Health Labs

Management Staffing Process

Mergers and acquisitions occur at a given pace, but only 55 percent of those deals achieve the desired outcome. This Case study elaborates the merger deal between De Waal Pharmaceuticals and Bio Health Labs. The key persons involved with this merger deal are Karspar Van de Velde and Steve Lindeel. Both of these companies are undergoing through a managerial issues and implementing the decisions at a strategic level is conflicting with the values.

The present case scenario has been discussed in newspapers and press releases and people want to know the results of the merger between the De Waal Pharmaceuticals and Bio Health Labs. These conflicting issues can be elaborated as follows (Sievers-Hill, 2013)-

1. Merger Talent and Culture Management-Mergers and Acquisitions are unavoidable in this dynamic world. The question is how to reflect a position carefully and retaining the key talents in the company. The CEO of the company must keep the contingencies in check. CEO, Steve has been undergoing through the pressure of Merger and bringing two different cultures efficiently and quickly is a challenging task. Bureaucratic Theory of Management structures enterprise into hierarchy and entails rational decision making (Jetley & Mondal, 2012).
2. Internal Coordination and Formulation of Plans-The Human Resource Department is entitled with the management entity of merger and acquisition needs and considering the key aspects. These include- critical skills that can make an enterprise successful. Potential talent for formulation of plans. The first step which must be undertaken by the Steve Lindeel and Karspar Van de Velde is to merge the top management of two companies for forming a new venture (King, 2012). The administrative theory of management propagates the delegation of authority and power to relevant bodies with respect to formulation of plans.
3. Employee Retention-Employee retention is the ability of an organization to retain its key talent. This can be represented through statistics. The company needs to maintain 80 percent of key talent. The theory which propagates the stable relation between employer-employee is Human Relations theory. The company has been failing to achieve the administrative goals. For instance-Steve, CEO of Bio Health has been focused to get the regulatory approval and eight senior people have left the company and four people are in the process of leaving the company (Douglas, Flinchbaugh, Kruse & Ohler, 2013).
4. Relationship Management-Relationship Management is a principle strategy for the management of employee relations and associations with existing and potential customers. Relationship Management helps the enterprise to stay connected with customers and improves processes and earns profitability. The main point of conflict between the two companies is management style and decision making structure of the key persons of the organization. This is a prime reason due to which stock price has been declining. Another key reason for declining stocks of the company is experienced people are leaving from the company like Steve Alison and continue working with De Waal Pharmaceuticals(Kao & Menezes, 2010). The Human Relations theory gives an account of stable emotional association of employer and employee. Few people are motivated to work due to the reward. This can be in the form of salary, gifts, bonus, incentives and others. The Human Relations theory gives a brief overview of different perception of people working in the office.

The complete case study is based on the human resource problem which is being faced by both the companies- De Waal Pharmaceuticals and Bio Health Labs. Both of these companies are in a contradictory situation on how many top management executives must be with the company and how many of them must be asked to leave? The decision is with the CEO- Steve Lindeel and safeguards the declining prices of its stock. All these circumstances those are arising out of a company are pertaining to the inappropriate recruitment and staffing, selection process. The merger between the two companies De Waal Pharmaceuticals and Bio Health Labs is a crucial decision which requires identification of knowledge, skills and exchanging the linkages between the top personnel’s of both the companies (Stacchini, 2004). The HR of the Bio Health Labs is Bruce Bollinger and Christian Myers is the Human Resource Manager from De Waal Pharmaceuticals. Due to the merger taking place between both the companies, the CEOs of both the companies have decided to retain Christian Myers as HR head and demote the salary structure of Bruce Bollinger. However, looking at the company’s decision of not retaining the top executive of Bio Health Labs requires introspection through the Board of Directors. The company is on a perspective of human resource functions must be streamlined with the operations department and due to which Christian Myers must be the HR head from Karspar’s Company. The CEO of the two companies’ must have a collaborative approach in making a decision with relevance to the occupancy of top management positions of the company. Steve Lindeel, the CEO of Bio Health Labs is the authoritative person to make the decisions. Despite of the above situation underlying in the company, the company has experienced so far eight management executives leaving the company and four are more expected to leave the Bio Health Company (Whitchurch & Gordon, 2013).        

Resolving Conflicting Values

The process of recruitment in a pharmaceutical company is a complex process and requires elaborating the following concepts-

1. Selection Process-Selection of a candidate is a compulsory task, but a time consuming process. The CEO Of the company Bio Health Labs-Steve Lindeel has been manually identified the best potential for the company. Sourcing of a candidate must be based on the several recruiting metrics like quality of recruitment, acceptance ratio and time of hiring. This is one of the prime reasons that more than 20 percent of personnel from Bio Health Labs has been left. The company must be involved with the utilization of better sourcing tools. Selection of a successful candidate and explaining the relevant job-related factors and consistently providing feedback is must(Mar, 2006).

The CEO of the company-Bio Health Labs, Steve Lindeel is working on a classical approach where the delegation of power and authority is not given to the subordinates. The classical approach works on simple principle of self-regulating economy and the job satisfaction needs and other social needs are not taken into account. The Company needs to adopt the Human Relations approach which facilitates optimal productivity, employee motivation. Individual attention must be aligned with recognition.     

1. Analysis of Talent Data and Workflow Management-Integration is a principle process which must be connected with different functionalities, to align the objectives of two merging companies. The organized data must be processed and presented to the company’s CEO Karspar Van de Velde and Steve Lindeel, in the right format and at the right time. All the decision relevant data regarding the candidate must be in place and the process must be completely automated. The company must look for different enterprise systems like tracking systems, applicant management system. The CEO Of the company Steve Lindeel must focus on implementing performance management procedures and HR information system to effectively manage the workflow between the two companies. Two CEO’s must remember the key slogan-“It is the people who makes it all happen”. The key personnel lead towards success or failure (Vaandering & Coevoet, 2016).   

The Analysis of talent in an organization can be explained with relevance to X & Y theory. The X theory propagates employees work for a given income and lacks the motivation towards work. This requires immediate supervision and intimidation. The Y theory views the employees as fundamental assets of the company. Work is effective, productive with company standards.

Both the companies need to identify the notable benefits of integration and recruitment sourcing processes.

In a company, every person has a separate viewpoint, to which it may be equally valid or invalid depending on the conflict. In a present case study, the merger between the two companies- De Waal Pharmaceuticals and Bio Health Labs represents the organizational culture conflict and Recruitment and selection of applicant process conflict. The conflicting values can be resolved by adhering with coping mechanism and searching for the question in a given problem within a time frame. The conflict resolution strategies are enumerated below (Douglas, Flinchbaugh, Kruse & Ohler, 2013).

1. Considering Organizational Culture and Values-the two companies involved with the merger process need to separate the personnel from the organization’s problem and consider the issues at the negotiation table. The company needs to determine the organizational worth of personnel with which a counterpart associated with a company. The communication transaction process must be possible within the two parties. In order to do the resolution of a persistent conflict within an enterprise, the CEO of the company must look at the association of the key personnel within a substantial time period. The organizational culture involves looking at a given conflict with a different perspective (Harinck & Druckman, 2016).
2. Relationship Building Dialogue/360 Degree Feedback-The relationship of an employee with its working organization involves engaging in a dialogue at a negotiation table. Relationship building dialogue needs to bring the realistic picture of the conflict arising within an enterprise and explore the different options. A subjective review of the conflict must be presented to the management and perceptions of different key persons involved with the decision making process must be taken into consideration. A counseling intervention can be implemented within the process. Relationship building dialogue is largely dependent on different variables such as gender, organizational culture, information, values and beliefs (Hutter, Wood & Dodd, 2011).
3. Appeal towards a shared value-Bridging the gap of a counterpart at the negotiation table and bringing him/her closer must be within the interests of the company. The company must establish the negotiating ground on which conflict resolution can be done through negotiation strategies. The HR of the company must understand the conflict from a substantive and procedural view. A functional coping mechanism must be developed within an enterprise and effective strategies which can effectively manage the conflict possibilities (Wissenburg, 2006).
4. Confrontation- The confrontation is a conflict resolution technique which enhances the understanding of differences that exist within a counterpart. The companies undergoing the merger process need to have a fast reconciliation process. The present generation experiences differences with respect to culture, mistrust and change management. The HR needs to have an empathetic understanding of the confronting problems that exist within the enterprise system. The HR must engage in creative problem solving process and implementing the positive solving approach towards the counterpart. Confrontation negotiation solution is a technique for companies which are struggling with multiple conflicts at the top management or middle level. Successful conflict resolution requires integration of new counterparts at different levels. Confrontation is the underlying process that can connect the different functionalities within an enterprise and make relevant decisions regarding the arising conflict (Abdulkadiroglu, Che & Yasuda, 2009).   

Integration Management is an assortment of different processes which ensure the project elements are being coordinated in an appropriate way. This involves making trade-offs between the competing alternatives and roles to meet with the stakeholder expectations.

The Two senior executives Peter Krug and Vijay Naipul are working for Dutch Company and USA based company. The Dutch company had operations in Bangalore and Peter Krug has been working in the interests of company from past three years. Vijay Naipul, a senior executive was based in USA from the past ten years are heading the Bio Health Labs operations. The integration management is the heart of day to day processes and ensures that all the elements (including human resource) must meet at end points to successfully achieve the goals and objectives of the company (Bandyopadhyay, Foo & Tan, 2017).

The integration process of top management is unfair and biased towards the long term associates of the company. The CEO of the two companies Karspar Van de Velde and Steve Lindeel needs to provide 360 degree feedback analysis, appraisal scheme, the transfer of an employee (pertaining to organizational culture and other factors) and retention scheme. The company foresees the complicating matters on which plant to be closed down and which counterpart must be given the authority for regulating the plant. The Bio Health Labs is under the view to shut down its Mumbai operations and Karspar Van de Velde is of the view to provide transfer to Senior Executive-Vijay Naipul. But, the company is not in the interest of retaining Vijay Naipul due to the salary bars that the company will have to face in India.  

Integration Process with Respect to Senior Executives

The integration processes of top management do not follow the retention process of old employees within the enterprise. The company lacks to provide the formal communication to the employees and the HR of Bio Health Labs and De Waal Pharmaceuticals do not have a communication strategy. The former company does not have any integration teams which have alienated the staff members. There had been no transition plans to retain the employees. The Bio Health Labs need to work in a 360 degree feedback system wherein the company needs to worry about the contracts and retention costs. The company was in prolonged affair to merge with De Waal Pharmaceuticals, but did not have any plans for retaining the employees (Corbin, 2012).

A 360 degree feedback is also commonly referred to as Multi source assessment or multi rater feedback. This process involves receiving feedback from existing subordinates, supervisor and counterparts. This is a self-regulatory process which is undertaken at the employee level. The two companies need to engage in 360 degree feedback process where in the employee receives anonymous feedback (Deshpande, Bhanot & Maknikar, 2015).

The retention of an employee in an enterprise is also determined through the appraisal scheme received every year. The top management of the company De Waal Pharmaceuticals and Bio Health Labs needs to focus on re-structuring the appraisal system with relevance to workplace competencies. As observed, the people at work are motivated by the hefty lump sum amount payable at the end of every month. The 360 degree feedback system recognizes the strengths and weaknesses of an employee and becomes effective at different functional stages (Vashishth, 2011).  

The two companies De Waal Pharmaceuticals and Bio Health Labs have been unsuccessful in doing the merger due to decrease in organizational productivity and employee retention. The cross-functional merger integration team has been created which focused on long term performance of the plant and resource optimization. In the context of above, the management, organizational theories with relevance to integration with top management can be elaborated as-

1. Administrative and Bureaucratic Theory-Change management happening within an environmental setting requires the functional activities to be grouped into departments and bring into practice administrative structure. The Bureaucratic theory propagates power is distinguished in three different types- Charismatic Power, Legal Power and traditional power. Steve, CEO of the company Bio Health Labs has made a wrong decision by undertaking the regulatory action. The legal decisions of the company were made by the Steve, and this lets the stock prices decline by 20 percent. The De Waal Pharmaceuticals Company was successful in creating cross-functional merger (Mishra, 2014).   
2. Human Relations Theory-The human relations theory of management states human resource is important for productivity-not the machines just. An enterprise needs to have an HR supportive team which can facilitate growth and development. Individual attention and alignment of productive resources helps in sustainable achievement of goals. In the present case scenario, the Human Resource Department is not having adequate resources to take a decision. For instance- The Company has 120 key personnel’s, out of which 65 jobs are senior management jobs. A senior Executive-Alison Whitney-the director sale of Bio Health Labs and best representative of company must not leave the company. This can be associated with different prolonging factors-Untimely bonus, reduced salary and informal communication system (Chandhana & Easow, 2015).  
3. Contingency Theory- Contingency theory is in close association with situational approaches. The contingency theory highlights the significance of leader’s personality and given the circumstances in which a leader is operating. Two leadership styles play a major role-task, motivated and relationship motivated. In the above case study, the CEO of Bio Health Labs does not possess these leadership skills. A task refers to the accomplishment and motivational factors for performing a job. The major emphasis must be on the leader-employee relations. The leader needs to assess the environmental characteristics like emotions, confidence, trust and other variables. Task clarity is another concept that focuses on task structure and task accomplishment. A contingency model of leadership effectiveness with relevance to leadership styles in which environment a leader operates must be studied.   

Conclusion: 

Creating a performance dedicated cross-functional team which is responsible for analysis of data can help in making good decisions. The future business requirements must have a clear understanding of workforce and identification of gaps and manage the transition process and integrate employees. Creating a positive momentum by execution of plans and open formal communication must be initiated by the newly formed company.  

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