Mergers as a Major Move for Global Businesses - Case Study Example

Introduction

Mergers have become a major move for the global businesses as a means of increasing their market coverage. However, the different cultures and practices for employees from both sides of the merger could be very hectic if not organized properly. Mergers result in risks related to employ retention and thus it is important for the management to create an enabling environment not only in setting goals but also in motivating employees. This proposal looks into reward and recognition as methods of employee motivation.

Current Situation

Our company formed a merger with VR Tech, with an aim of increasing its profit through increased sales and the sharing of production costs. However, the company ignored the employees during the merger, resulting in the danger of losing key employees and low productivity. Rewarding or recognition of various employees is not addressed effectively.

Background of the Situation

70 percent and more mergers fail to achieve their goals due to various factors associated with the human resource sector. These factors are:

• Mismatching cultures
• Differences in management styles
• Different salaries
• Lack of communication and trust
• Layoffs and,
• Undefined long-term goals.

In order for a merger to survive, the management should create new policies that should guide the merger, retain the key employees, conduct selection and downsizing properly, develop the compensation framework and communicate properly to the employees. Failure to follow such procedures would results in layoffs, due to diminished morale and productivity for most employees. Despite, these procedures motivation of employees is also necessary in a merger.

The Problem

Due to the merger of our firm with VR Tech, the strategy has affected most of our employees according to my understanding. Complaints from different employees suggest that they were not engaged in the process and thus the move was not effective. Nevertheless, there are conflicts and apparent enmity that exists among employees from both sides of the merger, due to the different cultures and working styles (King, 2014). The workers involve themselves in unfavorable competition with the aim of acquiring favor from the management.

In addition, the fear of unknown for some of employees continue to grow as the employees remain uncertain about what their jobs holds for and lack of opportunities for growth, results in the danger of employee burn out. Despite that, the positive contribution of the employees towards the success of the business has greatly reduced since they are unwilling to work with each other. As a result, there are reports that others are seeking opportunities elsewhere.

Solution to the Problem

The best solution for the problem facing the employees of our company is ensuring effective communication. The management should call all the heads of department and supervisors and teach them about the importance of having an open communication with employees. Every supervisor or head of department is supposed to engage his/her subjects and share with them about the goals of the company following the formation of the merger. Furthermore, the participants of the training need to inform the employees about the expected changes due to the merger as well as assure them about their new roles.

Concerning the issue of uncertainty about employees’ future employment, the heads of departments and supervisors need to provide the list of employees that the company would retain and those that would be dismissed, assuring them that no more layoffs would take place. The participants also need to remind the employees that they are suitable and valuable to the company. The issue about culture clash should be solved by encouraging the employees to knowing each other as well as train them about different practices in different cultures and ways of incorporating them.

Managers also need to create new compensation frameworks, uniform rewarding procedures as well as recognizing the staff for any achievement.

The Expected Outcomes

Successful application of the solutions provided would result into an organized merger with an informed, corporative and a highly productive workforce. Informed employees understand their roles in the diversified culture and would avoid any conflicts from other workers (London & Higgot, 2010). Furthermore, ensuring employees about their job security would increase their loyalty to the company and thus improving their commitment.

Nevertheless, the rewarded and recognized individuals would feel appreciated and would put more effort in order to remain in that radar, resulting in improved results of the merger.

Project Plan

• Reward and recognition

The proposal focuses mainly on reward and recognition as the solution for the problem facing our company. Therefore, it is important focus on the reward and recognition plan. A well-established reward and recognition plan affects the behavior greatly and improves results for an organization (King, 2014). The following are steps I would use to establishing a reward and recognition plan for our company:

• Establishing the foundation of the company, by determining the aim of the plan, its facets and identifying the measurement of the plan
• Selecting a champion who would lead the plan effectively and has the willing to do so reducing obstacles
• Creating the parameters of the plan by determining the aims of the company through rewards and recognition and matching them with needs and expectations of the employees
• Designing the plan by looking into the structure of the plan, determining the needs that should be included in the plan and providing details on how the provisions for the expected reward and recognition should be accessed and provided
• Introduce the plan by giving the staff time for understanding, putting it into test and evaluating it by determining what works or does not work
• Preparing for rollout by ensuring that every employee hears the news about rewarding and recognition as well as orienting the administration and the staff on the new culture developed by the merger
• Plan for infrastructure support by taking into consideration how the plan would be done and the cost that would be incurred
• Evaluate and plan for the improvement of the plan as a result of the changes that would result afterwards. A vigorous evaluation system with appropriate measures and mechanism for recommending changes to the plan should be implemented
• Providing a continuous support that ensures the plan is fresh and meaningful to employees, through the development of an approach that enables them remember the requirements of the plan.
• Communication

A well-planned communication is critical in the success of mergers. An efficient communication system requires that the shares vision between the two companies and their operations are integrated. The following steps should be followed in ensuring successful communication.

• Multiple routes of communication should be established to ensure that effective communication is achieved
• Common issues should be repeated to ensure that all employees understand the reason behind the merger
• Employees should be provided with opportunities for involvement and proving feedback
• Employees should be ensured that there could be problems with the merger but be committed at addressing the issues as early as possible

Suitability of the Management

In order to execute the solution of the problems and implement the plan highlighted, the processes must be carried by highly qualified personnel (McKnight, McDaniel & Ehmann, 2012). The manager of our company has the qualities and qualifies to supervise the initiative. The manager has the ability to:

• Organize training for the supervisors and heads of departments on the importance of communicating with each other. The manager is also able to provide feedback to the supervisors and heads of departments as well as schedule the training
• Coordinate the management team in establishing the common rewarding and recognition standards, qualifications and values
• Coordinate with the department of Human Resources in establishing performances with an aim of rewarding and recognizing individuals appropriately
• Ensuring that the reward and recognizing plan is successful and is profitable to both the company and the employees

Estimated Budget

Training Program (4 heads of departments, 3 supervisors) $ 21,000

HRM evaluation$ 12,000

Two plan implementation$10,000….

Total Direct Costs$43, 000

Conclusion

Mergers are important in enabling a business to access new markets, acquiring advanced technology and minimizing competition. However, the strategy comes with equal challenges as its importance. Different cultures with different management styles result in unhealthy competition that may fail the merger. The management team uses different strategies, in order to overcome the challenges. Communication is one of strategies that would solve the problem of our company since the employees complain about the failure of the management in informing them about the merger before its formation. Communication would also assist in ensuring reward and recognition is done according to the plan. Proper implementation of the plan and the solution to the problem would make the merger successful and as a result the joint profit would improve. Nevertheless, the fruits of diverse culture would result such as creativity and innovation, which would improve the profits of the business.