The organizational change is an important aspect of the organizational proceedings where the organization generally restructures the different elements of it in order to get better. The general organizational changes are visible in the form of business expansions which generally focuses on increasing the profitability of the organization (Alvesson & Sveningsson, 2015). The general form of the business expansion will include the mergers and acquisitions. The merger is generally aimed to improve the current situation of the participating organizations but it is also observed that the organizational conflicts between the participating organizations may also demoralize the growth of the new organization (Trautwein, 2013). The paper discusses the context and the conflicting issues related to a merger and the solutions for the issues as well.
The major conflicting issue for the formation of the new company is the incapability in the decision making from the part of the CEO Steve Lindell and the chairman Kaspar van de Velde. According to the study of Lubatkin (2013), one of the major important factor in the merger and acquisitions is the synchronization among the two companies or the employees of that concerned organizations. The first obstacle in the smooth conduction of the merger was the trust issue of Steve on Kaspar as it was observed that Steve feared the excellence of Kaspar in managing the media. Steve was afraid of the fact that Kaspar would pretend in such a way to the media that it will reflect he has more importance in the decision making for the new organization. One of the most important theory in the stabilization of the workplace in cases of merger is the assurance of the continuation of the important and efficient employees (Ahammad et al., 2016).
It is necessary to have the people who will do the task with rapid speed rather than the people who will take some extra hours to sort things in case of the mergers. But both Kaspar and Steve were not acknowledging the fact. Steve was right with his thought of increasing the speed in the process of the merger but in case of any organization the process of collecting people haphazardly in order to assign them important posts and then if something goes wrong the try of fixing them is not appreciated at all. The process recommended by Steve will incorporate certain level of vulnerability among the employees and that would eventually result in the separation of efficient employees from the organization. On the other hand Kaspar was also not concerned about the speed in the process of the merger. Along with these the merger faced the significant challenge of the cultural differences when both of the individuals were not able to address the issue. Steve was observed to favour to favour his own employees whereas Kaspar was significantly concerned with the impact of his decision on the people of Rotterdam. The senior level employees of both the organizations felt the same issue as they were significantly observed to have an attitude like “they are not like us”. It was believed to have a major impact on the organizational culture of the merged organization. Lastly the process of selecting the key employees for the new organization was also a point of concern as both of them were observed to ignore the in depth of analysis of the facts and figures of the performances of their employees in the selection for the merged organization. In accordance to the contingency theory of management, the top level management executives were observed to forget to set the benchmark for the other employees and it seemed that the competency to manage the organization was absent from their part (Otley, 2016)). This created significant amount of annoyance and chaos among the employees of both the organizations.
The general strategy that is used to acknowledge the process of integration is the Appraisal or rewarding policy. When Allison informed Steve about the fact that considerable amount of people are concerned about their job and some of them are thinking of getting separated as well due to the well-structured offers from other organizations, Steve was significantly concerned with current situation of the organization. He significantly tried to assure people that the best ones for the business will be retained by the organization which is visible from the conservation of Him with Allison. With the concept of the merger price in the business, the organization was subjected to an increment in the shareholder values as well (Miller et al., 2016). This will be instrumental for the rewarding policy as well.
In the process of the integration of the organizations, a major influential factor was the fairness issue. As Christian Meyer significantly focused on the above mentioned issue with precise focus on the IQ and emotional intelligence tests of the employees, Steve felt that the fairness is appreciable but the under the circumstances of the merger, it is not the correct time to have these specified tests. Steve felt that it will increase the consumed time for the integration in a significant manner which according to him was not good at all as he was incredibly focused on increasing the speed of the process. From the concept of effective management, it is justified to establish the fairness among the process of the integration but it is also desired that the increment in the speed of the process will also be there (Williams, 2015). The process of the integration was observed to be involved in significant conflicts with the closure of the operations in the Indonesia plant. Kaspar was significantly concerned with the people of Rotterdam regarding the proposal of Steve of closing the Indonesia plant. The concept of favouring own people in this case was significant barrier for the smooth restructuring of the new organization. Even Steve was observed to have the same issue when he expressed his dissatisfaction on the people of Dewaal in his conversation with Bruce. For an effective and fruitful merger the synchronization of each and every party related to the merger is significantly needed which was absent in the above mentioned case in a notable manner (Armano & Reger, 2013).
Meyer was partially right about the demand of fairness as the employees of the organization had no idea about the professional objectives that will be used to assess their competency in the organization. Along with this, the employees were also unaware of the benchmark that they need to reach in order to retained and rewarded by the organization. As mentioned earlier this was a drawback for the organization which created significant amount of chaos in the organization. The integration process was facing notable challenges due to the issue. The integration process was observed to face the intense barrier with the selection of the HR for the new organization as both the suitable options for the post was not up to the desired mark. The issue with Meyer was that he cannot make decisions on the spot which under the circumstances of the merger was significantly desired. He depends on the thorough analysis for any sort of organizational decision making. In context of the mergers, Meyer’s process was significantly time consuming. On the other hand, Bruce was a notable figure who does not hold back and does not have any sort of fear in telling the absolute truth to Steve. But his behavioural presence was acknowledged as funny. For a top level leader of the organization, it is right to have a good communication and friendly mode of interaction with the employees of the organization but it is not desired that he will lose the authority over the employees in doing so. Steve feared that the recruitment of Bruce will create the above mentioned issue.
Along with this, there were certain issues regarding the proper analysis of the performance statistics of the employees in the selection of the workforce of the new organization as both the leaders were observed to have a general lunch meeting in order to sort such an important issues regarding the recruitment of the workforce. At the end Steve tried to inject the belief in his employees that each and every effective employee will be taken care by the organization and the rewards for the ones who stay connected to the organization after the merger was the reflection of the sense of urgency that Steve felt.
One of the major conflicts in the organization was the concern of the fairness in the organization. As both the leaders of the organization were observed to favour their respective workforces in the merged organization, the concept of fairness becomes significantly important. Hence the solution for the conflict will be the process of implementing a transparent method of conducting the proceedings of the organization, may that be the selection of the employees or the rewarding policy. The perfect evaluation of the performance statistics should only be implemented in order to promote the employees. The assessment of the performance of the employees will be best if it is done by external consultants. The need of the external consultant is significant for the organization under the circumstances of the merger as it would eradicate the internal politics, loyalty issues of the investigator, power clashes and the cultural differences. The assessment of the external consultant will not be biased as the consultant will be indifferent to support any of the parties of the merger. The introduction of the external consultant will be instrumental as it would be able to provide expressively treasured inputs to the HR integration along with the conduction of the detailed structured interview sessions. In addition to this, the assessment of the external consultant will also be able to incorporate a 360 degree feedback of every party related with the organization which will be significant in understanding the exact condition of the organization. The external consultants will also be helpful in conduction of a comparatively correct assessment. The assessment of the external consultant will be significantly creative in the identification of the roles inside the organization for the effective and productive employees. The assessment will also produce a benchmarking perspective to the ones who came second in the race of getting selected in the merged organization.
Along with the above mentioned issue the merged organization faced significant difficulty in portraying the managerial competencies where the top level executives of the organization were not sure about the definition of the required competencies and their behavioural indicators which they need to incorporate in themselves. The managerial post holders of the organization were not competent in conducting their trade as they are observed to be biased in their operations. The presence of cultural difference was also a significant issue.
The employees of the two different organizations having their base in two different nations were belonging two different cultures as well. Hence the employees of the different organizations were able to inform the difference of them from the other employees by the line “they are not like us”. The cultural differences in the workplace will be significantly affecting the organizational culture as the important aspects of the organization like the communication between the employees or the team work will get significantly hampered by the presence of the differences in culture (Bochner, 2013). Hence the merged organization must introduce several language and cultural assimilation training to both sets of employees so that an appropriate and desired form of working environment gets established.
The merger created several issues for the two senior leaders of the mentioned organizations. The list of the issues kept increasing from the cultural differences, merger dynamics to recruitment procedures.
The leaders of the organizations were observed to use the contingency management theory where there will not be any specific method of conducting the business of the organization or there is no described method of leading the organization. In the mentioned management theory, the leader applies his or her own style of leading according to the assessment of the condition (Van de Ven, Ganco & Hinings, 2013). This was one of the drawbacks of the merged organization as the absence of a prescribed method of leading the organization created significant chaos inside the organization as both sets of employees were insecure regarding their job in the merged organization. The theory of the cultural assessment in organizational context is also helpful in the evaluation of the cultural difference among the employees of two different organizations belonging to two different cultures (Banks, 2015).
The theory was instrumental in the correct evaluation of the solutions that need to be taken by the organization in order to reduce the culture shock among the employees. This also enabled the employees to have a better understanding between each other which will be significant in the long run as the productivity of the employees will increase as a result. The improvement in the communication is an influential factor in the theory of management and the 360 degree feedback method is significant in implementing a better interaction between the employees and the managerial post holders of the organization. This was significant in analysing the performances of the employees on the basis of opinion from the employees of other department as well.
Conclusion:
On a concluding note it can be said that the merged organization significantly lacked the synchronization of the two companies that were forming the merger. The detailed analysis with the specific focus on the issues like the sense of urgency, proper method in restructuring the workforce of the merged organization would have guaranteed the success of the merged organization at a very primitive stage.
References:
Ahammad, M. F., Tarba, S. Y., Liu, Y., & Glaister, K. W. (2016). Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention. International Business Review, 25(1), 66-75.
Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change work in progress. Routledge.
Armano, M. J., & Reger, S. J. M. (2013). U.S. Patent No. 8,401,866. Washington, DC: U.S. Patent and Trademark Office.
Banks, J. A. (2015). Cultural diversity and education. Routledge.
Bochner, S. (Ed.). (2013). Cultures in contact: Studies in cross-cultural interaction (Vol. 1). Elsevier.
Lubatkin, M. (2013). Merger strategies and stockholder value. In Mergers & Acquisitions (pp. 43-57). Routledge.
Matsumoto, D., & Hwang, H. C. (2013). Assessing cross-cultural competence: A review of available tests. Journal of cross-cultural psychology, 44(6), 849-873.
Miller, N. H., Remer, M., Ryan, C., & Sheu, G. (2016). Pass?Through and the Prediction of Merger Price Effects. The Journal of Industrial Economics, 64(4), 683-709.
Nguyen, A. T., Reiter, S., & Rigo, P. (2014). A review on simulation-based optimization methods applied to building performance analysis. Applied Energy, 113, 1043-1058.
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Trautwein, F. (2013). Merger motives and merger prescriptions. In Mergers & Acquisitions (pp. 14-26). Routledge.
Van de Ven, A. H., Ganco, M., & Hinings, C. R. (2013). Returning to the frontier of contingency theory of organizational and institutional designs. The Academy of Management Annals, 7(1), 393-440.
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