Cross Cultural Integration - HR Issues

During the first quarter of this year, the total value of mergers and acquisitions reached approximately $900 billion, up 44% from the same period last year. Companies have always used this strategy to grow and consolidate, and to eliminate competitors. Moreover, one of the main arguments for carrying out these deals has been that they create synergies The first phase of Mergers and Acquisitions there are various aspects of business that is affected which needs to be streamlined. These processes have a direct relation with the success of the integration. This process such ideally called synergy but it is called integration as not all mergers and acquisitions synergies the processes of both the parties. Closer look at the different aspects that can be affected by a cross-cultural integration. Human Resource: People issues in case of M&A are the most sensitive and critical aspect to handle. Effective communication is the key to keeping the rumors of an effective M&A. In todays world there is always a continuous struggle to get the right talent for your job. Imagine loosing your war just because your warriors have lost path to your goal. Very little importance is given to human capital concerns at the time of M&A. Following can be the reasons: People issues are not viewed as priority since there are other process driven challenges to be addressed Top management views people issues too sensitive to address so try not to discuss the same Lack of information with the top management In case of lay-offs dont know how to deal or communicate with the employees. The value for human capita is marginal for some managers There are concerns of having their ground stable first then people issues would be addressed

The flow of an M&A process:

Before Integration

During Integration

Solidification and Post integration

Step 1 HR issues during integration: Identifying a pilot who can spread the information. This person should be a very good communicator, have good analytical abilities, have the good connect with the staff and should be unbiased Keep infusing accurate information with the help of that pilot. Constant communication to be in touch with your employees Cultural assessment Creating practices for learning and knowledge transfer

Step 2 HR issues during combination During integration of the company there needs to be an extra care to be taken care of: Deciding on who will be retained and who will be not Communication here is the most critical. Communication should be handled in the most sensitive manner

Establishing a HR culture, policies and practices is essential Systematic approach towards the selection of the team

Integration can be poorly implemented leading to specific implications: The attrition rate will shoot up The leadership rate will also go down, as he will have lesser information the current scenario Employee satisfaction will drop down Integration efforts differ from company to company so the processes to be put in place should be in alignment with the new vision and mission Most of the employees think that the employees care more about financials than about their human resources

There needs to be a selection of a integration manager who with the help of the inputs from communication manager should implement the integration. The Integration manager should be: The integration manager should have good HR sense, good analytical skills, good leadership skills, Achieved good business sense Retained a high credibility in the system before

Also the HR is responsible for setting up a Steering committee that will be responsible for Selection of a leader Selection of goals and objectives Role definition, processes and procedures Redefine or reinforce the company values Redefine or reinforce the R&D processes

Step 3 Solidification and Post integration: Clearly there is a new entity that has been created at the outset of the two companies. There are various HR issues that can be addressed at this stage: A new joint will bring in issues of solidifying, fine tuning, readjusting. The other HR related issues: Creating and evaluating a new structure Meddling two cultures need assessment and fine-tuning and change

Help manage the change as a facilitator Revising the new model Selection of the new entrants Deciding the leaders who are going to chalk out the culture of the new entity