The Human Impact of Mergers and Acquisitions
"It takes only 60 days for a company to match its competition in pricing, 90 days in marketing and three years in distribution. But it takes seven long years to create a competitive corporate culture and build a top team". (Harvard Business School Study)
Mergers and acquisitions are commonplace today as businesses restructure to compete in a global marketplace. Despite the economic logic behind them, research indicates that most mergers fail to achieve the synergistic results expected. Furthermore, studies repeatedly demonstrate that at best, only half of all mergers and acquisitions meet initial financial expectations. Employee management is necessary because most people are averse to change that wasn't their idea, especially when they think their livelihoods are at stake. Fear of job loss and changes in corporate culture are just two reasons why employees may feel compelled to make rash decisions, like turning in their letters of resignation. You can expect to lose a few employees, but it's not acceptable to lose top performers as a result of M&A activity.
Human resource (HR) activities are increasingly being held responsible for merger and acquisition failure. The HR weaknesses commonly found in a typical merger process can be grouped as follows:
1. Neglect of psychological issues. The psychological effects of change on people are not given adequate consideration when companies are integrated.
2. Inadequate communication throughout the merger process. Employees are not kept informed during the integration process. Although people fear that their jobs are at stake, they typically have very little reliable information on which to base decisions.
3. Culture clashes between the two organizations. Empl ...