Intranets When Organizations Merge - Essay Example

Case Analysis Introduction Presently the world is looking forward to business. What is business? Is it essential and necessary for the development ofa nation? It is able to make out some results or rewards, out of some source. This is, actually, what is known as business. Every organization will have its own goals, its own merits or demerits, problems, causes as well as its symptoms. When two more companies decide to come together, it is known as ‘merger’. This allows the companies to join together and carry on the work as a single structure. Whenever the merger takes place, the two existing companies decide to wind up their current business plans and carry out the new tasks. So mergers take place when two or more existing companies decide to wipe out their business identities and activities and assumes a new identity jointly as a single entity. Overview The topic of current discussion is the merger of two companies, that is England’s Royal Biscuit Company and Germany’s Edeling. According to Sir John Callaghan, Chairman of the London based, Royal Biscuit Company, there is no evidence available to suggest that both these executives, Mr. Michael Brighton, Head of HR of Royal Biscuits Ltd., and Mr. Dieter Wallach, his counterpart of Edeling worked together on this leadership development plan. The new company ‘Royal Edeling’ which would amicably blend both those existing companies, that is the merger of equals. By taking the two sides-one which is an entrepreneurial Powerhouse that had veritably single- handedly transformed British Snack food industry, and the other, a 120- year old, Munich based family, with a German brand. In this particular Case Study, it is the Royal Biscuits’ proposed merger with German Biscuit-maker major. Problem The major problem for mergers are of integration planning, which was dreadfully behind schedule and merger of the leadership between the two Companies. Seven out of the 10 seats in the new Company’s Management Board of Directors would be held by Royal Biscuits. Regarding the composition of the executives, less than half of the positions on the Supervisory Board would go to Edelings stockholder. However, it was felt that in a merger of equals, leadership assignments should be shared equally. Should the merger take place, according to laws in Germany, the new company would be managed by a Management Board, that would look after operations and also by a Supervisory Board that would supervise the management and would represent all stakeholders Then, the national differences between both British and German Governments regarding how to sign off the merger. Leadership styles are the fundamental problems in this regard. While the German Company believed in classroom lectures and Management Training courses imbibed from their inhouse University, the British Company believed in on the job training and people put in charge of teams. Successful team managers grew up quickly in the ranks. However, the Germans could not reconcile to this aspect since they believed that leadership was a science and had to be carefully nurtured. Again in Royal Biscuit Company, despite the assurance of top corporate executives, the workers feel insecure. There is a growing concern about job losses and changes that might threaten the company’s work culture. Causes and Symptoms The causes lie in the different approaches to leadership and style of functioning. While Royal Biscuits believed in gaining leadership through work and demonstration of leadership skills, the German Company believed in classroom lectures and theoretical classes so that the executive develops an attitude and style of functioning. Further they should also be creative in management functioning and have entrepreneurial abilities, which is possible only through efficient leadership. The symptoms lay in the fact that even after more than 3 months of negotiations between the respective Human Resources Head of the two Companies, no results were forthcoming This angered the Chairman of Royal Biscuit Company , Sir John Callaghan very much, since a lot of time had passed but the merger was still being delayed . Solutions The first Solution would be to give up the merger plans between the Royal Biscuit Company and Ediling. This advantages that would accrue due to this decision would be that the alleged fear of blockage of promotional avenues among the executives of the companies would be removed, and also the labourers’ fear of loss of jobs and reduced incomes would be allayed. The two companies could work on their respective strengths and could work for better positioning in the market. However, the disadvantages that would accrue would be loss of market opportunities, synergestic growths and also the opportunities of Royal Biscuit acquiring a global corporation perspective and gaining newer markets outside the UK. For Ediling the disadvantages would be the loss of opportunity of being part of a growth oriented market leader in the field with latest technology and highly skilled work force. The Second solution would be to have a mutually agreeable solution by thinking at a bigger level instead of thinking like a German Company or an English company. This could be ensured by imbibing some of the principles of the German Company and their HR policies and practices. In the Board of Management, the German could be more 5, instead of the present 3. Again, in the Supervisory Cadre, the German company could be on 50:50 sharing instead of present 30% share. If a mutually acceptable merger solution is struck, then other matters could be solved effortlessly. The advantages of the merger outweigh the shortcomings since both would stand to gain by it. If the respective parties are able to discuss and resolve the problem of leadership and functional styles and other relevant matters it would be beneficial for both the parties. To solve these problems; the applicability of essential managerial function is a must. Moreover, proper structuring or restructuring the organization and communication among the persons to fulfill these responsibilities. The real challenge is to design a programme of merger that could remake the image of a suitable business or organizational structure throughout the entity for solving them on above mentioned lines, there are several ways: Planning - look forward the future and to preset the plans those are beneficial for the future business growth. Staffing- selection of right and suitable person for the right job according to their capabilities. Budgeting - it means a sampling of total business outlay in advance and to compare the actual with the budgeted estimates. Reporting - that is to submit /forward a brief description about the whole project to the top management for identifying the current status of the business. Then only the area of strength and weakness will identify. Directing - ‘giving supervision’ to give orders and suggestions for the proper running and systematic functioning of the business. Coordinating - That is sharing mind among the personnel proper coordination among the workers will be able to reduce the collusion with in the organization. More over it is able to create a friendly atmosphere throughout the entity. Designing - a well designed and systematic functioning of the business is good impact. Proper and sufficient designing is essential in the case of merger. Also proper communication among the entire levels (top, middle, bottom) of the organization is also beneficial for its future growth. ““Ideally, the first groups to be merged are the internal communications teams within each of the original organizations.” (Robertson, James. Intranets When Organizations Merge. Internal communications. 1 Apr. 2004.) Final Recommendation: This final Recommendation deals with the fact that the proposed merger is a better option in the long run although some initial hurdles need to be crossed. Both the companies can gain in reputation, market standing, strategic positioning vis-à-vis their competitors and business rivals and can also have synergestic advantages when the combined efforts of two are better than the individual efforts of each in terms of future business growth and prosperity in the global market. WORK CITED Robertson, James. Intranets When Organizations Merge. Internal communications. 1 Apr. 2004. 2 Apr. 2007. Read More