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One of the greatest challenges faced in the industry today is to oppose the forces of institutional entropy that seemingly inevitable undermine organizational vitality. There is a pronounced pressure on companies to continuously renew and change themselves in order to remain competitive and innovative. Even under best circumstances, innovation at companies is associated with uncertain endeavors. I propose a conceptual framework that decomposes the overall acquisition integration process into four sequential and co-evolving processes: (i) Formulating the integration logic and performance goals, (ii) Establishing the integration planning approach, (iii) Executing operational integration, and (iv) Executing strategic integration. Managing the strategic dynamics of acquisition integration in fast changing competitive environments requires attention to all four processes and the feedback loops between them. Analysis of the HP-Compaq merger and Tata Tetley acquisition however, suggests that creating a strong feedback loop between the operational integration process and the process of formulating the integration logic and performance goals is difficult, yet is needed to timely revise the initial assumptions in light of changing market realities and responses of key customers to the new corporate strategy. It also suggests that establishing a strong feedback loop between the strategic integration process and the process of formulating the integration logic and performance goals is difficult, yet is needed to maintain sustained top management attention to the multi-year strategic activities necessary to meet the dynamic competitive challenges. Analysis, furthermore, suggests that top management should be cautious at the outset in stating long-term goals for the new company, not declare victory too soon, and reduce the opportunity costs of acquisition integration by augmenting its own bandwidth for managing large-scale strategic change.
Successful integration leads to effective change management. I propose a conceptual framework that decomposes the overall acquisition integration process, which leads to successful change management into four sequential and co-evolving processes: 1. 2. 3. 4. Formulating the integration logic and performance goals, Establishing the integration planning approach, Executing operational integration, and Executing strategic integration.
Rationale behind the Objective The first process – “formulating the integration logic and performance goals” – involves the boards of directors, top managements, and consultants of the two companies, who convince themselves that the merger makes strategic sense and make high-level decisions about the new top leadership, major strategic goals and the overall organization. It is important to distinguish two aspects of this process. First, top management of the acquiring company formulates the new corporate strategy, which explains how combining the two companies will improve the product market position of the new company, how it will strengthen its distinctive competencies, and how it will use the strengthened competencies to defend and leverage its improved strategic position. Second, the top management of the acquiring company makes assumptions about the future state of the competitive and economic environments and uses these to formulate short and long-term strategic and financial goals for the merger and for creating shareholder value. The second process- “creating the integration plan” - involves, in first instance, deciding on the new executive team and the basic organization structure of the combined companies prior to the merger’s announcement. Specific goals are set for each of the major stakeholders: shareholders, customers, employees, and partners. An integration planning team is formed and the blueprint of the integration process is created. Pre-deal clearance planning activities such as identifying short term goals for synergies, workforce reduction, procurement rationalization, phasing out redundant products, and getting the new organization up and running are established to prepare for the process of executing operational integration. Planning activities related to multi-year strategic initiatives needed to develop a new culture, effectively cope with the competitive dynamics, and meet long-term goals are also started to prepare for the process of executing strategic integration. At this point, the distinction between strategy and execution is 2
still meaningful: The vast majority of managers and employees of both companies only have to think about delivering current business results and the integration team only has to think about planning and creating the blueprint for executing the operational and strategic integration processes.
The third process - “executing operational integration” - starts the day the deal closes and the execution of the integration is launched. This process is very hard for everyone involved: There are often a large number of layoffs, the remaining levels of management are selected, people find out whether they have a job and what it is, new organization structures are activated, new sales teams call on worried customers, and on it goes. This process, which generally lasts between 6 and 12 months, involves time-consuming, often unexciting and frustrating working through the details of the integration at the frontline. The primary goals are short-term: To hold on to customers and achieve market share goals, achieve quarterly financial results, eliminate targeted product redundancies, get procurement synergies, select the right people and get the organization to work. At this point, the distinction between strategy and execution becomes blurred, and the effectiveness of strategic leadership is crucial and brutally obvious in the face of the challenges and the short-term results obtained. Executing operational integration tests the continued relevance of the new corporate strategy with key customers as well as the initial assumptions about the economic and competitive conditions. This learning, in principle, should trigger a feedback loop to allow the process of formulating the integration logic and performance goals to co-evolve. There is little time to think about strategy during the operational integration process, however, as management of the combined companies must now manage very complex integration issues and deliver short-term performance in line with the set goals. The cost of failing to execute well here is felt to be so high (a feeling not necessarily made explicit) that the strategy is, somewhat appropriately, viewed as secondary. At the same time, while the integration logic may remain valid, it may nevertheless be necessary to adjust the initial assumptions on which the performance goals are based in light of deteriorating economic and competitive conditions. This too is difficult because these changes are often not immediately and unequivocally clear, but also because the revisions they would require impose further difficult and potentially unsettling short term actions – e.g., significantly increasing the number of layoffs – on the part of an already stretched top and senior management. The fourth process - “executing strategic integration” - depends on some of the activities performed in the operational integration process and runs somewhat in parallel with it. It is, however, primarily driven by the multi-year strategic initiatives necessary to get ahead of the competitive dynamics envisioned. While these strategic initiatives are prepared for during the integration planning process, they may need to be subsequently adjusted in light of the feedback loop triggered by the execution of strategic integration. This feedback loop helps test and revise 3
and the ability to pick executives at the senior ranks with superior skills in getting their organizations to follow through on the strategic initiatives in the face of ambiguity and uncertainty.possible. everyone must continue to execute the remaining operational integration issues and deliver business results. who continue to scan the rapidly evolving competitive environment. rather than where they are at the start. At the same time. The aim here would also be to study the human side of a merger.the key assumptions of the integration logic that pertain to how well and how fast key competitors were expected to be able to improve their strategic position and competencies. Strategic integration is the primary responsibility of top management and assigned staff. the process of executing strategic integration must effectively cope with where key competitors will be several years down the road from the start of the strategic integration process. In other words. Effective strategic leadership of strategic integration requires being able to clearly define what “winning” means and forcefully executing the multi-year strategic initiatives that will make wining . A merger brings a lot of change in the culture and the employee morale. Thus the concept of change management comes into play. This in turn involves generating extraordinary energy that continues to radiate throughout the organization. Objective here is also to find the change management post mergers and acquisitions referring to human side of change. 4 .achieving the longer-term performance goals set for the combined companies .
STRATEGIC DYNAMICS FOR ACQUISITION INTEGRATION.COEVOLVING DYNAMICS OF CHANGE MANAGEMENT PROCESS 1 FORMULATING THE INTEGRATION LOGIC & PERFORMANCE GOALS PROCESS 2 CREATING INTEGRATION PLAN PROCESS 3 EXECUTING OPERATIONAL INTEGRATION SHORT TERM GOALS PROCESS 4 EXECUTING STRATEGIC INTEGRATION LONG TERM GOALS TIME TIME 5 .
Sources of secondary data were 1) Magazine 2) Journals 3) Research studies 4) Online interviews of the company officials. 6 . when and how. Primary Data is the original information gathered for a specific purpose. where. Descriptive research answers the questions who. what. Thus its implications in Indian context were not known. describes data and characteristics about the population or phenomenon being studied. • The HP-Compaq merger took place in US. The researcher selected the sample based on judgment that the sample will give accurate information on change management. Limitations of the Study • Secondary Data cannot be verified. 5) Newspapers 6) Company reports and Presentations Sample Sample consisted of officials within the company. Sources for Primary data collection were: Secondary Data is the data already collected by others and is reused by the researcher. Judgment sampling is a common non probability method.RESEARCH METHODOLGY The research is primarily descriptive in nature. the top management officials were unavailable to comment. However. also known as statistical research. • Only top management officials of the company can give an accurate picture of the change management process. This is usually and extension of convenience sampling. Method adopted was Judgment Sampling. Descriptive research.
MERGERS & ACQUISITIONS 1.1.1 OVERALL PICTURE OF M & A’S Mergers, acquisitions and joint ventures are common ways for companies to meet their growth, globalization and development needs today. The words describing these different types of contracts between companies have definitions. In particular the concepts of merger and acquisition are used purposefully to give an impression about a situation in a certain perspective. In many situations executives prefer to use concept merger instead of acquisition to offer a view of co-operation instead of a hostile take-over. Merger is defined as 'in general a situation in which two or more enterprises cease to be distinct enterprises'. Acquisition is defined as 'by one company of sufficient shares in another company to give the purchaser control of that company'. (Both definitions are from Macmillan Dictionary of Accounting). Hubbard (1999) adds that acquisitions can be either friendly or hostile. Acquisitions are takeovers in which the bidder negotiates directly with the target company’s board of directors. Proxy contest is in question when there is an attempt to gain control of the target company's board of directors via a shareholder vote (Hubbard 2001). Leveraged buyout is the purchase of shareholder equity by a group usually including incumbent management and it is financed by debt, capital or both (Hubbard 2001). Joint venture is defined as 'establishing a complete and separate formal organization with its own structure, governance, workforce, procedures, policies and culture - while the predecessor companies still exist' (Marks & Mirvis 1998). I intend use the terms 'mergers and acquisitions' or 'acquisition' as synonyms or simultaneously not differing them from case to case. Sometimes the word merger is a nicer word for the situation for the executives. Hostile take-over has not been included. I don't have a separate focus on hostile situations. According to the cases I have studied, there are enough problems to be solved
in friendly mergers and acquisitions to be more successful or less painful to the people involved. I shorten ‘merger and acquisition’ as MA. According to company experts and economists there is no alternative to globalization. Competition forces companies to go where labor and raw material are the cheapest, capital favorable and the markets the biggest. The globalization started in the end of the 1980s when the GNP (gross national product) and world trade grew faster than ever. Firms and countries have been able to specialize and develop their core competencies (Helsingin Sanomat HS 18.9.2000). The American thinking about the importance of shareholder value has become common also in countries earlier with in-effective capital. According to Helsingin Sanomat arguments for globalization are: • • • • • • • • • • • World GNP grows faster than ever Trade over borders is increasing Firms and people are able to focus on what they best can Firms are able to grow and become more profitable Firms are able to get labour, raw material and financing cheaper than before Competition and owners force the firms to be more profitable Fighting is more expensive Corruption decreases Oppressed minorities get their voice heard better than inside a country By international enactment it is possible to improve the position of labour, women and environment Availability of culture is improving, for example TV-series
Arguments against globalization are: • • • • • • • • • Income differences among countries will increase The protected, weak, subnormal and slow areas will remain retarded in terms of development National states are tool less in world competition (market forces) Democracy (democracy losing its power when the market power takes over) Free capital, new technology and speculative investors bring instability in world economy with them Growing differences between poor and rich countries increase tension in world politics Immigrant problems increase Cultural clashes take place in multinational corporations Supranational monopolies decrease competition 8
Tax competition will wreck social security systems Cultural convergence because of exposure to shared media experiences
Globalization has become the most common thing to describe the business activities in the world today. Three reasons (Cartwright and Cooper 1992): • • To be present for the customers all over the world (customers). To use the favors of infrastructures of different countries remembering that countries, not only companies want to be and must be competitive. Companies work hard to locate their production and services in the best possible locations using all the competence and financial benefits, which are available in different countries (country competitiveness). Talent search (talent search and recruiting). Nations compete for companies; nations want to be competitive to get the best companies and favors coming with that (Porter 1992).
Governments work hard to attract business by offering special benefits, part of which is offered by the society: education systems, safe environment, well organized contacts between different stakeholders, taxation benefits, and technology power. Many of the major corporations with Indian origin have kept their headquarters in India, both because of taxation and human capital availability reasons. Even if, it has meant a few expatriates to India, a lot of traveling in top management. 1.1.2 TYPES OF MERGERS Horizontal Mergers Vertical Mergers Conglomerate Mergers Horizontal Mergers This type of merger involves two firms that operate and compete in a similar kind of business. The merger is based on the assumption that it will provide economies of scale from the larger combined unit. Example: Glaxo Wellcome Plc. and Smith Kline Beecham Plc. mega merger 'The two British pharmaceutical heavyweights Glaxo Wellcome PLC and SmithKline Beecham PLC early this year announced plans to merge resulting in the largest drug manufacturing company globally. The merger created a company valued at $182.4 billion and with a 7.3 percent share of the global pharmaceutical market. The merged company expected $1.6 b i l l i o n in pretax cost savings alter three years. The two companies have complementary 9
(Eg: DCM and Modi Industries. Firms operating in different geographic locations also proceed wi t h these types of mergers. The merger will also enable both the companies to pool resources and streamline business and finance with operational efficiencies and cost reduction and also help in development of new products that require synergies. contracting. which have no specific timing. Example: Merger of Usha Martin and Usha Beltron. payment collection and advertising and may also reduce the cost of communicating and coordinating production. either as forward or backward integration.) Conglomerate mergers are affected among firms that are in different or unrelated business activity. and a merger would let them pool their research and development funds and would give the merged company a bigger sales and marketing force. The basic reason is to eliminate costs of searching for prices.drug portfolios. applied engineering. marketing and so on. Vertical Mergers Vertical mergers lake place between firms in different stages of production/operation. Conglomerate mergers have been sub-divided into: • • Financial Conglomerates Managerial Conglomerates 10 . Conglomerate Mergers It is an amalgamation of the companies in two different industries. vertical mergers take place when both firms plan to integrate the production process and capitalize on the demand for the product. This type of diversification can he achieved mainly by external acquisition and mergers and is not generally possible through internal development. These types of mergers are also called concentric mergers. Unlike horizontal mergers. Both production and inventory can be improved on account of efficient information flow within the organization. Forward integration take place when a raw material supplier finds a regular procurer of i t s products while backward integration takes place when a manufacturer finds a cheap source of raw material supplier. Firms that plan to increase their product lines carry out these types of mergers. Usha Martin and Usha Beltron merged their businesses to enhance shareholder value through business synergies. Firms opting for conglomerate merger control a range of activities in various industries that require different skills in the specific managerial functions of research. production.
In simplest form this leaves the target company as an empty shell. 1.3 TYPES OF ACQUISITIONS • Share purchases . They also: • • • • • Improve risk-return ratio Reduce risk Improve the quality of general and functional managerial performance Provide effective competitive process Provide distinction between performance based on underlying potentials in the product market area and results related to managerial performance. However. When two firms of unequal managerial competence combine. the performance of the combined firm will be greater than the sum of equal parts that provide large economic benefits. • Asset purchases . increasing potential for improving performance. They not only assume financial responsibility and control but also play a chief role in operating decisions.in a share purchase the buyer buys the shares of the target company from the shareholders of the target company. The buyer will take on the company with all its assets and liabilities. Concentric Companies The primary difference between managerial conglomerate and concentric company is its distinction between respective general and specific management functions.and 11 . one of the advantages of an asset purchase for the buyer is that it can "cherry-pick" the assets that it wants and leave the assets .1.• Concentric Companies Financial Conglomerates These conglomerates provide a flow of funds to every segment of their operations.in an asset purchase the buyer buys the assets of the target company from the target company. exercise control and are the ultimate financial risk takers. Managerial Conglomerates Managerial conglomerates provide managerial counsel and interaction on decisions thereby. The merger is termed as concentric when there is a carry-over of specific management functions or any complementarities in relative strengths between management functions. and the cash it receives from the acquisition is then paid back to its shareholders by dividend or through liquidation.
all mergers and acquisitions have one common goal: they are all meant to create synergy that makes the value of the combined companies greater than the sum of the two parts. The effort in control may be a prelude: • • • • To a subsequent merger or To establish a parent-subsidiary relationship or To break-up the target firm. but liquidation is nevertheless usually the end result. and dispose off its assets or To take the target firm private by a small group of investors. acquisitions are actions through which companies seek economies of scale.that it does not. which is common in smaller deals. An acquisition is only slightly different from a merger. the term acquisition means an attempt by one firm. Unlike all mergers. a deal that enables a private company to get publicly listed in a relatively short time period. to gain a majority interest in another firm. Company Y becomes merely a shell and will eventually liquidate or enter another area of business. efficiencies. This leaves the target in a different position after the purchase. In an acquisition. Other times. or a combination of the two. These include: 12 . with stock. and enhanced market visibility. Regardless of their category or structure. with all parties feeling satisfied with the deal. A reverse merger occurs when a private company that has strong prospects and is eager to raise financing buys a publicly-listed shell company. So. and together they become an entirely new public corporation with tradable shares. called target firm.liabilities . it may be different in name only. is for one company to acquire all the assets of another company. Acquisitions are often congenial. Of course. called the acquiring firm. Another possibility. all acquisitions involve one firm purchasing another--there is no exchanging of stock or consolidating as a new company. acquisitions are more hostile. which means that Company Y will have only cash (and debt. Company X buys all of Company Y's assets for cash. if they had debt before). There are broadly two kinds of strategies that can be employed in corporate acquisitions. Another type of acquisition is a reverse merger. usually one with no business and limited assets. a company can buy another company with cash. The private company reverse merges into the public company. In fact. Like mergers. The success of a merger or acquisition depends on how well this synergy is achieved.
and disorientation. While this may be true in certain circumstances. The change required to integrate companies cannot be driven from an entrepreneurial business unit.or the creation of parent/subsidiary relationship. The consensus on how to manage change has shifted to a dispersed approach because too many initiatives designed to cascade down the hierarchy have delivered disappointing results. a threat. structuring it appropriately. Executives who fail to overcome these challenges are responsible for the ego clashes and politics that are often the root cause of spectacular failed mergers. the consolidation of two firms.the merger of the two firms. To integrate companies following a merger. so that each succeeding one seems less compelling and less authentic. arguably the most important challenges involve the top of the organization—appointing the right top team. But just as legitimately. Hostile Takeover A hostile takeover may not follow a preliminary attempt at a friendly takeover. change can also be seen as instability. innovation. The usual interpretation is that top-down change fails because at every step messages get diluted. a merger requires direction from the top because that is the only way to initiate change throughout an organization. progress.1 CHANGE MANAGEMENT Change is a fact of life. recent thinking about change management no longer emphasizes the pivotal role of the top team. For example. rejuvenation. The most recent research points to a combination of organizational change management tools and individual change management models for effective change to take place. organizations and societies that moves the target from a current state to a desired state”. teams. upheaval. The concept of change management describes “a structured approach to transitions in individuals.Friendly Takeover The acquiring firm makes a financial proposal to the target firm's management and board.2. Stated simply.2 CHANGE MANAGEMENT THROUGH EFFECTIVE INTEGRATION 1. change may be seen as akin to opportunity. it is not uncommon for an acquiring firm to embrace the target firm's management. 1. This proposal might involve. defining its agenda. On the positive side. an innovative 13 . and growth. change management is a process for managing the people-side of change. and building the trust that enables its members to work well together. unpredictability. Unfortunately.
14 . or the front line. and even other stakeholders closely watch to see who ends up on the top team. members of the top team signal the kind of company they are creating and their commitment to that new company. In the best cases. Senior Appointments One of the most memorable things during an integration effort is the way managers. As the top team goes on to integrate the company down the line. and a set of targets. it in effect re-creates itself. of course. and its weaknesses inevitably spread throughout the merging companies. Understanding the impact of these signals on each side of the boundary between the merging companies is critical because the signals may depart from expectations in very different ways. Managers and employees will. This attentiveness represents much more than a voyeuristic interest in the human drama taking place. processes. Too much coordinated. Creating a new company at the top is particularly problematic in a merger of equals because managers are sorely tempted to maintain the identities of the predecessor organizations. The resulting mess will often be attributed to "incompatible cultures. the earlier the decision-making process begins and ends. Timing is crucial: in general.functional unit. and targets must deeply incorporate the aspirations of the new company in a way that is visible to managers. programmatic change must be achieved in too short a time for such approaches to succeed. the team visibly lacks the requisite quality. more subtly. where the conditions are set for the whole integration effort. the proclaimed strategy usually calls for their full integration. The power of the signals emanating from the top team reflects the fact that they are not just signals: they create concrete realities. The spirit of the project is determined at the top. adopt its language and trappings. it is rolling out itself. about the degree of its commitment to its proclaimed course. To be sure. and even outside observers. processes. The company is not just rolling out messages. and act according to its norms. the early appointment of a top team was a strong predictor of the long-term performance of the combined organization. The team must become the new company in the full sense. employees. Yet compromises on people issues may fatally obstruct this effort and ultimately undermine the merged company's pursuit of value. But the top team must do more than just talk about the new company. also interpret appointments to the top team as signals about their own future. Its messages. The important signals fall into three categories: (1) Senior appointments (2) The top team's alignment. In other cases." as if the failure of integration was the inevitable result of trying to mix oil and water. employees. the better. The appointments provide strong clues about the new company's direction and. In one study of 161 mergers. and (3) Clarity about roles.
senior managers the world over have very limited patience for time spent on anything other than "real work. 15 . but they also have distinct individual responsibilities. is a rather nebulous outcome of many diverse activities. All this is sensible enough and easy to say. the top team must fashion its own identity vis-à-vis the external world of business partners. competitors. at least in the end it is clear to all what has been decided. the future needs of the business are an equally strong factor in defining roles. It is best to focus on outputs whose value is clear even if they are intangible (for example. Getting to that level of agreement without a crisis is mostly a matter of discipline. a set of behavioral norms for the new company). and the top team's members must be aligned around them. by contrast. these frictions simply do not matter very much. it is not worth doing and could be counter-productive. which carries them past the usual internal frictions much more quickly. From the perspective of a company's long-term corporate health. Creating the top echelon of the new company is as important for its long-term performance as for the near-term success of the integration effort." This is all the more true under the intense pressure of integration. Research shows that when top teams turn their attention to the external environment. The new company's leaders must appoint the best possible top team for achieving its goals. but at various stages along the way they ask. managers on both sides may have very different perspectives on what constitutes a constructive. First. Compared with the pressing need to thrive in the marketplace.Another source of failure at the top is an unwillingness to face the prospect of job losses among close colleagues who have performed well for years—even though many more job losses are likely among people further down the line. "Are we aligned yet?" In a merger. customers. A carefully limited dose of team-building exercises can also help. People know when a company really has it. but with two important caveats. Top-team alignment. and regulators to reach this level of agreement. To do so. Establishing the top team poses a critical and immediate challenge for merging companies. its members must be clear about their individual roles. Role clarity The members of the top team share responsibility for the merging companies' future as a whole. This effect is particularly striking when an external crisis suddenly emerges. but in practice that degree of leadership can be hard to achieve during the hectic period leading up to a merger or even in its immediate aftermat. they often experience a catalytic effect. business-like exercise. They must work together in a complementary way not only to help the companies integrate successfully but also to lead the combined one through its other concurrent and future challenges. Alignment of the top team Although appointment decisions can be difficult. If one side perceives an activity to be a touchy-feely distraction. Second. To collaborate effectively. the team must define roles very clearly and quickly—particularly roles directly involved in the integration effort.
• According to Lewin. Driving forces facilitate change because they push employees in the desired direction. This step needs to take place after the change has been implemented in order for it to be sustained or “stick” over time. First. and connect the views of the group to well-respected. Unfreezing can be achieved by the use of three methods. Some activities that can assist in the unfreezing step include: motivate participants by preparing them for change. increase the driving forces that direct behavior away from the existing situation or status quo. It is high likely that the change will be short lived and the employees will revert to their old equilibrium (behaviors) if this step is not taken. find a combination of the two methods listed above. Lewin’s model illustrates the effects of forces that either promote or inhibit change.1. it is necessary to move the target system to a new level of equilibrium. Three actions that can assist in the movement step include: persuading employees to agree that the status quo is not beneficial to them and encouraging them to view the problem from a fresh perspective. Third. Second. Therefore. Specifically. build trust and recognition for the need to change. powerful leaders that also support the change. The third step of Lewin’s three-step change model is refreezing. It is the actual integration of the new values into the community values and traditions. change will occur when the combined strength of one force is greater than the combined strength of the opposing set of forces. In this step. Unfreezing is necessary to overcome the strains of individual resistance and group conformity. The purpose of refreezing is to stabilize the new equilibrium resulting from the change by balancing both the driving and restraining forces. and actively participate in recognizing problems and brainstorming solutions within a group. decrease the restraining forces that negatively affect the movement from the existing equilibrium. Lewin’s second step in the process of changing behavior is movement. Hence. the first step in the process of changing behavior is to unfreeze the existing situation or status quo. driving forces promote change while restraining forces oppose change. work together on a quest for new. The status quo is considered the equilibrium state.2 LEWIN’S THEORY OF CHANGE Kurt Lewin (1951) introduced the three-step change model . Restraining forces hinder change because they push employees in the opposite direction. relevant information. these forces must be analyzed and Lewin’s three-step model can help shift the balance in the direction of the planned change. This social scientist views behavior as a dynamic balance of forces working in opposing directions. One action that can be used to implement Lewin’s third step is to reinforce new patterns and institutionalize them through formal and informal mechanisms including policies and procedures • • Therefore. 16 .2.
it is necessary to: • • • • Manage expectations. 58% of mergers result in failures. Therefore. and post merger integration activities are key elements for the success of the change. The effectiveness of human resources strategies and practices are highly important for the success of post merger integration phase. while 70% depends on activities during the post merger period. 30% of the outcome is affected by activities during the pre combination phase. However. Mergers involve two critical phases that affect the outcome. During this process. 2. and in a timely manner with all levels of the organization. mergers help companies to achieve higher efficiency. All merger interventions are complex change initiatives. Give consistent messages about strategies to all stakeholders. These activities mainly involve the assessment of companies’ cultures through questionnaires and interviews and identify the key areas that will accelerate the integration process. Post merger integration projects involve three major phases: 1. Communicate decisions with right channels in a timely manner. the challenging dynamics of post merger period requires a well structured planning. and profit by creating opportunities for growth. assuming that the employees will adapt to change with no preparation. If well managed. Companies often ignore the importance of developing a merger integration plan. Cultural integration activities are also crucial for the success of merger interventions. Identifying organizational strategies. According to a research conducted with the participation of 115 companies around the world. and be prepared for the outcomes. As in all change management interventions.1.2. and to motivate the members of the organization to support and adopt to change. productivity. Constructing an environment in which employees and customers feel safe and satisfied help companies to sustain change and make it part of the corporate structure. Establishing integration plan. Management should have a clear understanding about the change. Based on researches. successful integration requires extensive planning. Creating a trusting environment for employees and customers is another critical factor. Assign management as change agents.3 INTEGRATION AND CHANGE MANAGEMENT The main goal of companies is to create value. The main tasks of human resources strategies are to communicate change openly. employees are directly affected by the change. and 17 .
or to the original strategic assumptions being wrong. Add to this that a relatively new outsider is in charge of orchestrating the execution of the acquisition integration and that she has to overcome active resistance of the major shareholding families of the founders of the acquiring company.1 Introduction Seldom is the inevitability of the strategic logic of large-scale corporate change immediately clear to internal and external constituencies and observers. In February of 2005. concerns on the part of HP’s board of directors about Fiorina’s leadership style and her ability to get the organization to execute the new corporate strategy led to her ouster as CEO. Executing operational integration. In early 2005 the competitive effectiveness of HP’s new corporate strategy was still subject of debate among analysts and outside observers. 18 . Following the consummation of the merger in May 2002. Even more rarely is such strategic logic turned into effective execution. Establishing the integration planning approach. and Executing strategic integration 1. By the end of 2004. “Carly” Fiorina faced this situation when she proposed to acquire rival computing company Compaq in September 2001. or to some combination of both. Implementing plan.3. the organizational integration of HP and Compaq was initially considered a success .HP COMPAQ MERGER The analysis of the HP Compaq is on the basis of four objectives explained above (i) (ii) (iii) (iv) Formulating the integration logic and performance goals. high technology companies operating in rapidly changing competitive environments. MANAGING CHANGE. especially if the change involves the integration of two large. The company continued to struggle with some key strategic issues. The a priori odds of success seem daunting. as the company was initially exceeding its goals. especially the development of a world-class direct distribution system to compete with Dell and the capacity to manage and provide business solutions to global enterprise accounts to compete with IBM. it had become clear that HP was missing the merger’s longer-term revenue and profit goals. even by many skeptics. HP’s CEO Carleton S. however. It was unclear whether this was due to the details of the organizational and cultural integration taking much longer to be worked out than initially expected. after a prolonged proxy fight.
The resulting less forceful execution of the multi-year initiatives lead to a weaker feedback loop from strategic integration back to the integration logic and its assumptions about competitive dynamics. these strong forces may have led top management to equate the integration execution challenge 19 . top management declared victory to the outside world. • Second. and financial analysts to stop focusing so exclusively on how the merger integration was going. which created a vicious circle. employees. In some ways. which were viewed as absolutely critical given the publicity of the $2. • First. there was a natural desire on the part of top management to get customers.5 billion cost cutting target. and other key stakeholders satisfied. the highly urgent short-term goals naturally focused the executive team and the integration planning team’s attention on the operational integration at the expense of the strategic integration. it was hard to get the top team to focus on scanning the changing economic and competitive environment and to focus on the longer-term strategic initiatives necessary to achieve the potential of the new company. One unintended consequence of this was a reduced sense of urgency and focus during the strategic integration process. the battle fatigue that unavoidably accompanied working through the operational integration process made simultaneous strategic learning exceedingly difficult. When the operational integration goals were met. in part due to a major focus on potential integration risks during the proxy fight. business partners. Top and senior managers executing the operational integration had to manage both the very challenging integration tasks and had to deliver the expected quarterly financial results while keeping customers. As a result. It was difficult to shift managers’ attention focused on cost cutting and value capture to attention to strategic issues. because there was a fear that launching the strategic integration work would lead people to lose focus on the short-term goals.Why Did This Happen? Analysis reveals that effectively managing the strategic integration process was extremely difficult and suggests several reasons. • Third.
• Weak IT market HP Commitments to its People 20 .000 employees. HP’s Challenge • Largest merger in technology history • Skeptical market. market-unifying systems and architectures and aggressive direct and channel distribution models.1 Merger Overview from HR Perspective • Merger created a $70 billion global technology leader with the industry's most complete set of IT products and services for both businesses and consumers. as well as Top 3 player in IT services. This led to disappointment of external and disillusionment of internal constituencies. • New HP is the #1 global player in servers. • New HP had operations in more than 160 countries and over 140. Successful operational integration. CHANGE MANAGEMENT AT HP-COMPAQ MERGER 2. Not fully following through on the difference between operational and strategic integration led to declaring victory too soon. was necessary but not sufficient for the company to achieve the new levels of success that were now expected as a result of the process of formulating the integration logic and the performance goals. • Combination furthers each company's commitment to open. • Heated proxy battle. • Combined company is creating substantial shareowner value through significant cost structure improvements and access to new growth opportunities. imaging & printing. and thereby lacking an effective feedback loop to measure progress against the assumptions underlying the integration logic. caused top management to fail to achieve the full promise of the merger and to miss projected growth and profit goals. storage and management software.primarily with operational integration. and access devices (PCs & hand-held). The vicious circle caused by not executing the strategic integration process with the required focus and urgency. however.
Job security is an important HP objective . Insofar as possible. and by our corporate policies. and an attitude of trust and understanding on the part of the managers towards their people. These relationships will be good only if employees have faith in the motives and integrity of their peers.. each individual at each level in the organization should make his or her own plans to achieve company objectives and goals. Relationships within the company depend upon a spirit of cooperation among both individuals and groups. To foster initiative and creativity by allowing the individual great freedom of action in attaining well-defined objectives. To provide job security based on performance. To recognize their individual achievements. supervisors and the company itself. each individual should be given a wide degree of freedom to work within the limitations imposed by these plans. which they make possible.2 CRITICAL FACTORS MANAGEMENT AT HP CRITICAL SUCCESS FACTORS SAMPLE ELEMENTS Well Defined Acquisition Strategy Reasons for Merger Explained Degree of Integration Defined Criticisms Addressed Clear Product Road Map Communication of Offerings Market Place Re-alignment of Internal Efforts Branding Strategy to Unyielding Focus on Customers Clear Points of Contacts Uninterrupted/Attention Support 21 . the company has achieved a steady growth in employment by consistently developing good new products. and by avoiding the type of contract business that requires hiring many people.• • • • • • • • To help HP people share in the company's success. After receiving supervisory approval. then terminating them when the contract expires. CONSIDERED IMPORTANT FOR CHANGE 2. To help them gain a sense of satisfaction and accomplishment from their work..
analysts. shareholders. 2001. Gaps Strong Program Management “Rules of The Road Interaction processes to track/drive results. • World-class advisors engaged. functions and horizontal processes since September. customers. − Linked to “new HP” senior management team. 2001. • Dedicated. partners. Accountability and clear Identified metrics and/ targets assigned to Proactive Steps Taken to identify project level. et al Clear consistent message. 22 . Defined” Boards/Executives Agreed to Minimize Periods of Uncertainty Organization Structure Defined Complete Planning prior to close Line Management Roles Determined Attack synergies from Day one Communication early and often Reaches all stake holders (employees. Clearly Defined New Corporate Governance Speed/Decisiveness Effective Communication to Stakeholders 2. • Additional “new HP” senior leaders announced October 12. Maintained Relationships Partners/Support. full-time PMI leads from both HP and Compaq directing planning for businesses. with Synergies and path to realization Recognition of Cultural Differences specifically identified Both cost and synergies included Nature of Cultural Differences Plans.3 Step 1: Building the Integration Team • Post-merger integration (PMI) leadership and group management named at time of announcement on September 4.
finance and human resources as well as ‘fuzzier’ issues. Teams within the IO deal with IT systems. (President). Michael Michael Capellas Capellas (President). such as the integration of the two companies’ knowledge 23 .Carly Carly Fiorina Fiorina (CEO). Webb Webb McKinney McKinney and and Jeff Jeff Clarke Clarke STEERING COMMITTEE Central PMO Post Integratio n Team PMI Team Nerve Center Fast Track Center PMO Program Teams PMO PMO PMO PMO PMO PMO Project Teams PT PT PT PT PT PT PT HP and Compaq set up an ‘Integration Office’ (IO) of 600 people from both companies to oversee the merger process. Bob Bob Wayman Wayman (CFO). Susan Susan Bowick Bowick (HR). (CFO). (HR). Bob Bob Napier Napier (CIO). (CEO). (CIO).
who never mixed with or dined with her employees in the staff canteen as her predecessors often did (Dalton. The merger led immediately to the loss of some 20. but. she was seen as an excellent formal communicator. ‘The Armani Witch’. confident. 2002a). Paul Bradling (Hayes. Fiorina’s personal standing also plummeted to the point where some HP employees in the USA began referring to her as. aggressive sales focus of Compaq’s culture. Fiorina’s leadership style. innovative capabilities and experience. In fact. Compaq’s culture was more difficult to pin down. ‘family’ culture of HP. and staff morale was low (Sakar. In contrast to the more paternalistic. ‘the employees in the two companies really don’t like each other that much’ (Gottliebsen. 2002. determined. This desire to get this right was driven in large measure by Mike Capella’s bitter memories of the problems Compaq had when it took over DEC in the early 1990s. was a major issue throughout her tenure as CEO. ‘It will be two years of guerilla warfare’. 2002: 17). and her tetchy relationships with the families of HP’s founders. An anonymous Compaq employee commented that. 2002). 2002). ‘sales oriented’. 2002). and according to one commentator at the time. At each stage. the company had also experienced several rounds of downsizing under Michael Capellas. this was one of the most exhaustively planned mergers in corporate history. During 2002. being described by employees in the early 1990s as ‘fast moving’. an incredibly difficult exercise given the strong emotional and psychological commitment that so many employees and the Hewlett/Packard families had to a culture that had served the company so well for such a long 24 . by the end of that decade as ‘moribund’ and ‘extinct’. it was reported that morale was at HP was at ‘an all time low’ (Lashinsky. with more than 150 executives and 35 focus groups of employees being involved in trying to thrash out a joint culture from two cultures that were quite distinct (Holland. Consequently. decisive. The IO has also spent a lot of time dealing with the cultural integration of the new company. as well as aligning internal systems. On the positive side.management systems. 2002). 2002 b & c). A new Australian operation was formed out of HP and Compaq employees into a new team selected by Fiorina and the new boss of HP-South Pacific. HR policies and operational procedures. and ‘quick’. the teams evaluated which company’s systems worked best and these were then adopted for the merged entity. During this time. The key to a successful merger would be to integrate the faster-moving. ‘pragmatic’.000 jobs worldwide and about 600 in Australia (Hayes. There were certainly some major cultural integration issues to be overcome. The Economist. She also clearly understood the need to somehow transform HP’s stagnant culture. strategic and charismatic. ‘entrepreneurial’. ‘aggressive’. with HP’s integrity.
LAUNCH AND LEARN There were significant cultural differences between HP and Compaq and the integration required a strong. Susan D. the company’s share price immediately plunged 10% to $US14. she was regarded by many people as remote. On the negative side. the integration steering committee and HP’s Executive Council. multi year focus on establishing the new culture. Worldcom. Bowick. HP’s executive vice president of Human Resources and Workforce Development.4 million ‘bonus payment’. and the so-called “soft” social issues that had to be handled in order to create a new culture would take a long time to get right.period of time. regions. or at least good enough. which is why Bowick was fond of saying. Cynicism in the company reached new heights when it was revealed that Capellas was to receive a $US14.99. This was a way of taking action that was fast and good enough. At the time. CULTURAL INTEGRATIONAL TOOL. 2003). While HP tried to put a positive spin on his departure. Negative sentiments about Fiorina and the company among both employees and financial commentators were compounded when Capellas announced his resignation from HP in November 2002 to take over at the helm of the disgraced telecommunications’ company. this company was mired in the biggest bankruptcy in American corporate history and had laid off 17000 employees. and a 25-year veteran of HP pointed said that to complement the Adopt-and-Go approach the Clean Teams also developed a ‘Launch-and-Learn’ mentality. “The soft stuff is the hard stuff. functions. He would not have been ineligible for this had he quit HP more than a year after the merger (Bergstein. • Assure that the value captured is maximized and exceeds public expectations 25 . aloof and autocratic (Mehta. 2. None of this was easy.4 Step 2: New HP Vision and Merger Integration Team Purpose NEW HP VISION We create a great new company that is a leader in our chosen fields and is positioned to be the leading overall IT solutions provider Merger Integration Team Purpose • Provide effective overall leadership for the planning and execution of the integration of HP and Compaq • Assure effective linkages with the business line managers. 2003).
manage and communicate integration progress. retain the highest level of customer satisfaction. • Name executive leaders early and link tightly into planning.• Assure the new HP is set up to achieve long-term growth objectives Guidelines for the Merger Integration Team • Start with the customer experience.5 SHARPLY FOCUS ON VALUE CREATION PRE MERGER INTEGRATION TEAM STRUCTURE Central Program Management Office (cPMO) Imaging & Printing Systems Group Supply Chain Customer To Cash Team Information Technology Finance Personal Systems Group Enterprise Systems Group Services Human Resources (Including Organizational Design & Structure) Brand Architecture Communications-Organization HP Labs CTO e-inclusion & Community Engagement . • Ensure that structure follows strategy • Make decisions quick and make them stick • Cultural Integrational Tool.“Adopt and go” • Clarify roles and ensure shared accountability • Create dedicated integration teams • Address cultural similarities and differences • Rigorously measure. issues and opportunities 2.com/e-commerce Government Affairs Culture 26 . wins.
Merger Communication & Messaging Shared go to Market Value Capture TABLE 3.INTEGRATION PLANNING FRAMEWORK Strategy Strategy Strategy Priorities Strategy Priorities Go To Market Strategy Go To Market Strategy Portfolio Portfolio Channel strategy Channel strategy Measures Measures Customer Customer Satisfaction Satisfaction Financial Financial Employee Employee Satisfaction Satisfaction Operational Operational Excellence Excellence Recognitions & Recognitions & Reward Reward Systems Systems Structure & Structure & Process Process Organization Organization Structure Structure Systems & Systems & Processes Processes Information Information Flows & Flows & Decision Decision Making Making Process Process Financial & Financial & People & Culture People & Culture Information Information One Common Culture One Common Culture Systems Systems Retention of Top Talent Retention of Top Talent Architecture Architecture New Competencies For our New Competencies For our People People Roles Responsibilities Roles& & Responsibilities 27 .Closing/Anti-trust Global Functions Infrastructure Communications.
commitment and excitement • Establishes a competitive advantage • Is reflected in the communications and actions of core leaders Activities – – – – – – – – – – Formal work-stream status Culture due diligence (CDD) investigation planned and communicated CDD process included interviews. new culture that: • Is clearly defined and broadly understood • Reflects the business strategy and brand • Supports best-in-class performance with customers. partners. shareowners and employees • Produces alignment. focus groups and survey Culture integration team met with combined Executive Council Reviewed approach to culture integration Identified culture cornerstones Explored archival material Engaged broader employee coalition Connected with brand and communication work Fast Start workshops initiated Anatomy of Cultural Due Diligence • Coverage: 22 countries • Timeframe: October ― December 2001 • 127 in-depth executive interviews • 138 focus groups with managers and individual contributors.2. spanning 1.500 employees • Focus of inquiry – HP on HP – Compaq on Compaq – Views of other company • Computer-assisted content analysis of interview data • Report to executive team: Christmas week 28 .6 CULTURAL INTEGRATION GOALS To build a strong.
SAMPLE SAMPLE INPUT: INPUT: New New Co-Executive Co-Executive Culture Culture Session Session HP HP Historical Historical CPQ CPQ Historical Historical New New HP HP Brand Brand Competitive Competitive Environment Environment STRATEGY STRUCTURE & PROCESSES CORPORATE OBJECTIVES VALUES METRIC & REWARDS BEHAVIOR POLICIES & PRACTICES SAMPLE SAMPLE OUTPUT OUTPUT Vision Vision & & Governance Governance of of the the Company Company Balance Balance Scorecard Scorecard & & Pay Pay Metrics Metrics Leadership Leadership Selection Selection Formation Formation & & Start Start Up Up of of New New Teams Teams Customer(Quality Customer(Quality Initiatives) Initiatives) Fast Fast Track Track Program Program 29 .
000 hits by end of day. • 20. • Channel strategy in place and communicated • Work force restructuring initiated.com (online store) open for business • @hp employee portal accessible to all employees • Company networks connected at key strategic locations • Active directory and enterprise directory synchronized • E-mail systems interconnected • All external call centers with HP greeting on day 1 30 .000 presales and sales call center agents and 8000 consumer support users’ trained and ready day 1.000 hits in the first hour of launch and 100.Day 1 Preparation • Focus solely on launch day • Gain agreement on day 1 requirements across functions/activities • Make adopt-and-go decisions • Develop conceptual/ physical models • Prepare • Test • Review readiness • Establish command centers Measuring Success at Launch-“We Were Ready” • 170 client business managers. 25 partner business managers and 30 retail account managers trained and announced. • 800 senior managers named. including region and country leads • Product roadmaps and transition plans available • Customer and partner outreach and training programs initiated • 1100 customers contacted to date • 23 top US/EMEA retail accounts contacted on day 1 • All partners given access to on-line sales training • Sales readiness training website received 40. Launch Report-Infrastructure Delivers • hp.
• Tracking all projects and their milestones to ensure we meet synergy goals on schedule • Ensuring tie off with value capture.7 Integration Plan of Record • Managing integration progress through a rigorous process. Meeting with the Steering Committee 31 . pan-HP view.com suffix for external email (both in-bound and out-bound) • Day 1 infrastructure management environment – Monitoring and reporting process – Escalation and incident management process – Command center for 30 days Remain Sharply Focused on Value Creation-Post Close Merger Integration Structure STEERING COMMITEE CENTRAL MERGER INTEGRATION OFFICE GROUPS (PMI) REGIONS /COUNTRIES (PMI) WORLDWIDE OPERATIONS (PMI) CORPORATE FUNCTIONS (PMI) 2.• Employee names with hp. restructuring and financial planning targets • Determining accountability owner for each project • Driving results through merger integration office focus on cross-organizational dependencies.
Carly held her half-day Steering Committee meeting. such as the merger product roadmaps. Clark and McKinney were on the agendas for these meetings. teams prepared for an all-day Wednesday integration meeting (chaired by Clark and McKinney). During these meetings. restructuring plans. Since they had to track over 10. Jeff Clarke. synergy synergy targets targets – – Consolidates Consolidates integration integration team team submissions submissions Integration Integration teams teams – – Verify Verify and and refine refine top-down top-down baseline. They would present or bring others in to present and make recommendations about important status items of the merger and different decisions. Implementation-Post Closing Corporate Corporate planning planning – – Monitors Monitors and and tracks tracks revenue. they were closely linked to the Steering Committee. yellow. Fiorina had limited the Steering Committee to a small group of senior executives who could rapidly make decisions and have those decisions be completely unquestioned during execution. and items that were falling behind or otherwise failing were marked red. Members of the teams would sometimes debate and come to a consensus recommendation. They would track the status of each project by using the color codes red. Items on track were marked with yellow. On Thursdays.000 Adopt-and. revenue. management decisions. McKinney and Clark then made the Adopt-and-Go decision. Webb McKinney. baseline. The committee consisted of Carly Fiorina. the chief information officer. just like a stoplight. data. Susan Bowick. cost cost and and synergy synergy capture capture over over time time Groups Groups – – Responsible Responsible for for revenue. Clark and McKinney would consider the recommendations and often sent them back to the teams for more work.Value Capturing Planning Framework Integration Planning Value Value capture capture team team • • Drive Drive overall overall top-down top-down corporate corporate planning planning process process to to achieve achieve full full value value of of the the merger merger by by 2004 2004 – – Provides Provides top-down top-down baseline. Bob Wayman. forecasts forecasts and and synergy synergy targets targets with with bottom-up bottom-up data. (reporting to McKinney and Clark).While the Clean Team operated in metaphorically clean rooms apart from the day-to-day distractions of operating a company. revenue. baseline. consolidation plans. and Bob Napier. forecasts. etc. the simplicity and rigor of that red. On Tuesdays. Clarke described how each Monday the teams would go through a very rigorous process with the merger integration program office. items that were finished or well ahead of plan were marked green. or a consensus position of agreeing to disagree. teams made recommendations about integration decisions. green. owned owned cost cost and and synergy synergy targets targets – – Execute Execute on on synergy synergy capture capture for for day-to-day operations day-to-day operations Functions Functions – – Execute Execute on on synergy synergy capture capture on on owned owned costs costs for for day-to-day day-to-day operations operations Management Management compensation compensation tied tied to to achieving value capture goals achieving value capture goals INTEGRATION STARTS 32 . forecasts. yellow tracking process was critical. TABLE 6 . green.Go decisions.
HP’s People Strategy enabled HR to: • Speed and smooth the process of change. • Move through the initial change period • Set a culture of high performance right from the start. Need for Change Management Strategy Change is an opportunity that you can influence. 5 STAGES OF CHANGE MANAGEMENT Stage 1-Awareness REINFORCE & ARRIVE The HP People Strategy is aligned to their corporate objectives and values and designed to keep employee commitment. and when managed correctly it will energize an organization. a) Why manage Change • Significant workplace change can defocus an organization Consistently practiced change management techniques will: • anticipate the phases of emotions • address the issues • maintain strong communication efforts • provide the catalyst to move people through change without losing focus and productivity b) Challenge for HR Develop a strategy to maintain and surpass the pre-merger standards of both companies while managing massive cultural change.KICK OF GROUP & FUNCTIONAL TEAMS \ TIME HP’s PEOPLE STRATEGY AFTER THE MERGER-MANAGING CULTURAL CHANGE DEAL CLOSE 1. especially in this time of change. 33 .
made that the winner as fast as possible. Every HP employee was required to attend a Fast Start workshop. Adopt-and-Go improved the focus of 99 percent of the combined HP-Compaq employees who worked outside of the Clean Teams. The CIT launched “Fast Start. These were determined in a “Product Roadmap. They knew that there would be no debate over the clean room decisions. 34 . One product of the Fast Start effort was the “Fast Value” program. Stage 3-Be pragmatic – “Adopt and go” methodology Adopt-and-Go The Clean Team would do the research necessary to make recommendations about which products to keep and which to eliminate. understand and align themselves with the company’s strategy and identify and deal with “hot spots”—likely sources of contention that employees would face as HP got down to the job of integrating Compaq and HP together. it allowed for speed of execution and that was the pivotal part of the new company’s ability to accelerate the savings. the Clean Team chose the better of what was currently used by HP and Compaq. And that allowed the new company to get enormous speed in the first six months. It was a huge task. which obviously led to good financial performance. but one they were expected to perform expeditiously. According to Jeff Clark. The people whose jobs were eliminated when their products were dropped knew that they could look for other jobs in the company. one-to two-day focused sessions designed to help employees learn to work horizontally across the post-merger HP.” a master plan of which overlapping product lines from HP or Compaq would be kept and which would be dropped.” a program of merger integration workshops led by facilitators and held at the level of individual employee teams. The Adopt-and-Go process stopped the politicking. designed to help employees get to know each other.Stage 2-Encourage face-to-face interaction – Fast Start sessions Fast Start and Fast Value To help speed the cultural integration of the two companies. HP included a Cultural Integration Team (CIT) within the overall Clean Team. instead of trying to develop “best practices” by combining the best aspects offered by the respective assets of both companies. Their job was to execute the clean room decisions. and moved on to the next decision.
Mobilize: What Is High Performance The high performance culture accelerates future growth by: • Maximizing organizational/individual productivity and capability • Aligning individual performance with company and business objectives • Using rewards as the motivator • Developing people through effective coaching. 35 . performance feedback and development planning.Stage 4.
BALANCE SCORECARD. HP VALUES ANDSUPPORTING BEHAVIORS 4 1 3 2 36 .
Personal accountability and ownership ”How we get things done is as important as what we get done. Re-evaluated personal conduct policies and practices 2.” . 4.Carly Fiorina 37 . Not an HR program—a broad-based. company-wide initiative 5. Long-term solution 6. Objectively examined behaviors and actions within HP 3.Stage 5: Reinforce and Arrive Ensuring the Best Environment 1. Created a new set of standards that define what we stand for today. owned by all HP employees.
training and tools • Reward those who contribute to and ensure best work environment 38 .Reinforcing Desired Behavior • Clearly set expectations for personal conduct • Charge each employee with accountability and responsibility for creating the best work environment • Provide resources.
• Significant presence in plantation activity in India and Sri Lanka. thus heralding the polypack revolution in the country. In 1983 the Tatas acquired the entire shareholding of James Finlay to rechristen the company as Tata Tea Limited. with UK-based James Finlay & Co to develop value-added tea. in plantation activity in India and Sri Lanka . set up in 1964 as a joint venture named Tata Finlay. has become the world’s second largest branded tea company. With an area of 15.” Tata Tea Globalization at a glance • World's second largest global branded tea operation with product and brand presence in 40 countries. the company produces around 40 million kilogram’s of black tea annually. The worldwide branded tea business of the Tata Tea Group contributes around 88 per cent of its consolidated turnover with the remaining 12 per cent coming from bulk tea. coffee. In the mid 1980s. and investment income. a company that had a turnover three times the turnover of Tata Tea in India • This was the biggest ever cross-border acquisition by an Indian company at that time and was also the first leveraged buyout by an Indian firm. after the acquisition of Tetley. Today Tata Tea and UK-based Tetley Group represent the world's second largest global branded tea operation with product and brand presence in 40 countries and a significant.CASE ANALYSIS. albeit consciously declining presence. Tata Tea is headquartered in Kolkata (West Bengal) and owns 26 tea estates in India as an entity. • Subsidiary in the US overseeing operations in the country. Its tea estates are located in the states of Assam and West Bengal in eastern India and Kerala and Tamil Nadu in the south. was among India's first multinational companies.1 INTRODUCTION “Tata Tea. BACKGROUND Tata Group Tata Tea.000 hectares under tea cultivation. to offset the erratic fluctuations in commodity prices Tata Tea felt it necessary to enter the branded market and launched its first brand Kanan Devan in polypack.TATA TETLEY ACQUISITION 1. The 39 . joint ventures in Pakistan and Bangladesh to sell tea • Acquisition of Tetley.
Tata Tea Premium and Tata Tea Agni respectively. banks and other companies. 40 . foreign companies and non-residents hold around 18 per cent stake. In order to build its business in these high value segments. the integration process was not rushed in order to protect Tata Tea from the risk of Tetley’s debt. In addition Tata Tea in India has three very strong regional brands in the four Southern states. Foreign institutional investors. Besides Tetley also boasts of a wide range of fruit and herbals and specialty tea. Tetley acquired in 2000 is the market leader in the UK and Canada with 26 per cent and 40 per cent market share respectively by value. a recently launched Chai Latte brand in UK. which is making good progress. The Tata Group companies are the largest shareholders of Tata Tea with a stake of 29 percent. packaging innovations such as the “stay fresh” flip top carton are being introduced. 1. three brands cater to the premium.7 million retail outlets in India. for which Tetley Ice Tea has been launched in UK and Australia. Chayya. which are either number one or number two in their respective geographies. Tetley in India. Chakra Gold and Gemini. Tata Tea Premium. with the remaining stake held by Indian financial institutions. These are Tetley. Tetley is establishing a presence in the ready-to-drink segment. Full-fledged research and development centers of the company focusing on the branded tea business include a facility at Teok (Assam) and a product development center at Bangalore. Ken Pringle remained as the Tetley Group CEO. popular and economy segment – Tata Tea Gold. is presented as the new face of tea – innovation brand. mutual funds. The Tata Tea brand leads market share in terms of value and volume in India.company has a strong distribution network in India reaching out to over 1. Products and Brands While Tata Tea is the second largest tea company in India after Hindustan Lever. followed by the public with around 23 percent stake. it owns the single largest tea brand in the country. and Tata management took new positions on the Tetley board of directors. Karnataka focused on the entire range of tea operations. is the first of its kind and is showing great promise. Furthermore. The arms-length relationship required that Tata Tea retain existing management at Tetley. How to Integrate: The Tatas decided that the best way to integrate was not to integrate initially but to maintain a “joint-venture” type of arrangement.2 INTEGRATION PROBLEMS A variety of problems existed in integrating the two companies: 1. though a niche brand. Under the Tata Tea portolio. Tata Tea did not want to change that structure until the debt level was manageable. Tetley has also launched iced tea under Tea of Life brand in UK. The company has five major brands in the Indian market catering to all major consumer segments for tea. Kanan Devan.
despite being the senior partners. Financial Constraints: There were three financial constraints restricting integration. Commercial processes: How should they put in place benchmarked processes. The first constraint was that legal and capital controls in India made the listing of Tetley shares in India unattractive. Tata Tea feared a domination of Tetley’s corporate culture. 5. IT. . . and Communications so that the objectives of both companies were in sync? The back-office integration was complicated by the fact that Tetley reported in UK GAAP. 41 . the highly fractionated regional tea makers in India grew faster. Regional players gained 6 percent market share in 2001. Cultural/Racial: There was a great deal of concern that British employees would resent having Indian managers. which meant that changes in Tetley’s structure needed to be pre-approved by bankers. The second constraint was that Tata Tea did not want to carry the heavy debt burden held by the SPV. particularly as Tata Tea was an A-rated Indian company. These concerns were largely the result of the fact that India was a former British colony.2. which knew only about India and nothing about Western markets. Meanwhile. . Size Difference: Tata Tea was half the size of Tetley in terms of revenues and number of upper management. Culture was a huge issue and had to be handled carefully. logistics. Tata executives would complain about being kept waiting when visiting Tetley’s UK head office reception centre. and supply to allied functions to the mutual advantage of both companies? Support processes: How should they integrate various support processes covering Finance & Legal. Anecdotally. Operational challenges: The merger posed a variety of operational questions. Mr Kumar also noted that. The third constraint was the restrictive covenants at Tetley as a consequence of the LBO. while Tata Tea adhered to Indian GAAP. HR. R&D. which may have created negative feelings among Tata Tea employees. 4. such as: • Growth issues: How could the combined corporate vision of “Challenging for leadership in tea around the world” be achieved? The merger required vertical integration between a tea production company and a global marketing company. which would be adopted uniformly by the two organizations? • • • 6. 3. Tetley people would complain about being run by Tata. Tetley employees were given substantial retention packages to avoid exodus. packing. putting pressure on Tata Tea’s market share and profitability at home. and the question was what growth targets needed to be defined for the individual companies? Supply chain: How should they set up processes to harness the synergies on tea sourcing and blending. Regional Players: Soon after the merger. purchasing.
bring about innovation in packaging. quality. Australia. India: It was initially believed that huge synergies would be achieved because Tetley could source teas substantially from Tata Tea’s estates. Middle East. 9. In Tata Tea’s markets. Whose approach was correct? Geographical spread: Tata Tea’s international presence was limited to bulk tea sales. the two companies had dissimilar products. while Tetley was relatively unknown in Tata Tea’s markets. Unfortunately. with its dual emphasis on plantation as well as domestic marketing. Tetley’s strength lay in its ability to buy quality teas worldwide. Conglomerate: Tata Tea was ultimately part of a huge conglomerate. Which customers should the organization focus on? Differences in skill-sets: Tata Tea was a plantation company whose major strengths were managing the estates. There was debate as to the surviving name of the new entity. whereas Tetley was into brand marketing with sizable international presence. Kenya vs. The Tata name was not strong in Western markets. There were also talks about pensioning off the lovable—but old fashioned—Teafolks in favor of promoting tea as a modern lifestyle choice. 42 . How were people to be cross-trained? • • 8. while Tetley was an expert in tea bags and instant tea. Tetley was a marketing and packaging company that had relationships with tea estates and focused on North America. the integration process had to focus more on new products than on substitution. Due to the significant differences in customer base. The ramification of these standards on Tetley was still a mystery. and Western Europe. There was a drive since the mid-80s to create domestic brands and export bulk teas. whereas Tetley was primarily a global marketing company. In contrast. and cost from teas found in Tata’s estates. Branding: Both companies had very strong brand names in their respective regions. Corporate Philosophy: The two companies had different opinions on how the business should be run. The Tata organization required group companies to pay fees for the use of the Tata name and adhere to standards of financial and social responsibility. the majority of Tetley’s teas were of a different flavor. and making teas. Tata Tea was a collection of estates that just happened to sell package tea and focused on Asia (excluding China). and Eastern Europe. and combine good logistics with management skills. so Tata Tea was an expert in bulk and loose teas. dealing with a huge work force. This gave rise to three types of differences: • Objectives of the company: Tata Tea was an integrated tea company. The impact of the conglomerate on the operations of a related foreign entity and the strength of Tata Tea within the conglomerate was unknown to Tetley employees. Therefore. perfect its blending skills. 10.7. tea was usually brewed in pots.
Auctions/Commodity Price: The acquisition of Tetley by Tata Tea came at a time when the prices of raw materials for making Tea were increasing. coffee. which caused the acquisition of teas from India to be more expensive for Tetley and made the transfer of money back to the Tata organization less remunerative. Changes Required There were substantial challenges to realizing the synergies. The second challenge is that since this was a cross-border acquisition. which Khusrokhan effectively summarized: The first challenge is that the acquirer company in this case is smaller than the company it acquired. For this the company has followed a strategy of forming subsidiaries or entering into alliances in countries that have a significant presence in the tea market. cross border integrations are even tougher. leveraged acquisition. both from the producer as well as consumer side. Demand for Tea: The general demand for tea in many of Tetley’s core markets was slowing or decreasing. I call it the “learning-to-think-for-two” phase. Exchange Rate: The rupee was strengthening relative to the pound. The third difficulty is that. It is something like the adjustment phase in a marriage. Sodas. and juices were gaining significant ground. 1. 12. where each organization has to begin to appreciate that there are two ways of looking at every issue and to appreciate each other’s point of view. has charted out its vision to be the market leader in the country and increase reach in the global market. There were also rumors in the market about Hindustan Lever Limited and Tata Tea controlling the price of Tea. banks can have a say in what is being done. it is bound to have its fair share of cultural problems. This was partly because tea was viewed as a boring or sophisticated drink. which starts immediately after the honeymoon.11. because this is a heavily ring-fenced. 13. Getting people in two companies in the same country to come together can be a problem.3 FORMULATING INTEGRATION LOGIC AND PERFORMANCE GOALS Tata Tea. We will have to carry the banks with us for anything that could be construed to be a structural change to Tetley’s operations [Attitudinal and mindset change among employees] is very much a part of any integration process. as part of its stated strategy to globalize. There were a number of questions about how to revitalize tea as a drink of choice. 43 .
Over time the company realized that in order to go global.3. blending and logistics management and the second largest seller of tea in the world after Unilever. funded through a mix of debt and equity. In Specialty Sector Company increased its market share and emerged as brand leader. The company decided to acquire through a leveraged buyout. However it had some implications. but failed. 44 • . Hence in 1995. 1. It was a major landmark in the history of the company in that year when it acquired Tetley. This however did not deter the company from reaching out again when the opportunity arose in the year 2000. as 70% of FMCG goods are sold through them. The integration team was often hampered by the due interference by the Banks. the company bid for Tetley. • Its UK operation was a mixed bag. It was the biggest ever cross-border acquisition by an Indian company at that time and was also the first leveraged buyout by an Indian firm.• • • • The first move towards globalization was the formation of its 100 per cent subsidiary in the USA in 1987. Tetley was bigger that TATA TEA. The acquisition took place through a special purpose vehicle (SPV) Tata Tea (GB) Limited at a cost of GBP 272 million. Canada is the second most important market for Tetley. However. a well-known innovator in tea packaging.1 Deriving the Integration Logic Tata offered following reason to acquire Tetley: • In the branded tea segment Tetley is second only to Unilever. Volumes were good in Black Tea and company increased its market share to 40%. This was followed by its presence in the plantation industry in Sri Lanka. Primary reasons for under-pressure margins were substantial increase in African tea prices (Tetley buys majority of its tea from this market) and retail price remaining low throughout the year. In UK price control is largely in the hands of retailers. Tetley has embarked its continued efforts of cost reduction and has even closed down its unviable London factory. Q1 FY 2001 results were mirror image of last year results. This acquisition made Tata Tea the world's second biggest tea company after Unilever. wherein volumes were good while margins were difficult to maintain. thereby requiring less promotional costs. acquiring an international brand would be preferable to building one afresh the world over. one of the two factories it operates in UK. while in UK it is number one. The reasons being that company as big as Tetley wasn’t affordable. buying. as tea prices from Kenya dropped and retail prices showed some improvement.
Australia. Benefits from Tetley: • Tata Tea and Tetley now work on common agenda. Company overall sees better prospects in current year. Western Europe. Training given to Tata Tea personnel in buying and blending tea. Europe and Australia. R&D initiatives helping Tata Tea producing more for Tetley. with representations in each company from other. Tetley was a company that had a turnover of GBP 280 million. The combined portfolios of branded offerings cater specifically to the US. in the north east of England.Tata Tea the leader in India in the packaged tea segment with a presence in developing countries through exports and Tetley the second largest tea brand in the world. with a presence in developed economies of US. In France also company was successful in increasing market share to 10%. Canada. benefiting both companies. • • • • • 45 . Tetley manufacturing facility based at Eaglescliffe. The integrated vista offered access to new markets and products to both companies. is believed to be the largest tea bag factory in the world. The acquisition was the perfect blend . To take Tetley name across the world and even introduce Tetley brand in India leveraging Tata Tea’s distribution and financial strength. Africa. as well as synergies in tea buying and blending.• • • Company sees US as a difficult market. three times the turnover of Tata Tea Ltd. Poland. More than 70 per cent of the consolidated sales of the company now come from outside India. Others: • • • Management of supply chain cost. which would make it suitable for exporting to Tetley. Middle East. The major advantage will be increased outsourcing of tea from South India upon quality improvement program undertaken by Tata Tea. Russia and Kazakhstan markets in addition to the manufacturing and supply operations of Tetley’s subsidiary companies. Canada. West Asia.
blending and logistics management and the second largest seller of tea in the world after Unilever. considered a landmark deal in India.• Tetley has a customized portfolio of offerings for each country.6 Million 1.(3/31/01) TATA TEA TETLEY Turnover Operating Profit Employees Tea Estates Key Markets $ 207 Million $36 Million 59.740 54 India $ 417 Million $42. Tetley was acquired in 2000. there wasn’t enough troubles to convince the board. Comparison of two firms is shown in table 1 (3/31/00). fruit and herbal teas.3. acquiring an international brand would be preferable to building one afresh the world over. Australia. 1. Tata Tea knew of Tetley via their joint venture in Southern India as well.4 CREATING THE INTEGRATION PLAN 46 .2 Selling the Integration Logic Over time the Tata had realized that in order to go global. Hence in 1995. but failed. Canada. green.100 0 Britain. iced ready-to-drink teas and an extensive range of exotic specialty tea. Tata Tea had actively competed with Sara Lee to acquire Tetley and the potential of Tetley completing its own initial public offer and the largest cross border acquisition in India (in terms of UK). United States Thus for buying Tetley again. 1. Tetley was bigger than TATA TEA. The reasons being that company as big as Tetley wasn’t affordable. ranging from black. buying. the company bid for Tetley. a well-known innovator in tea packaging. However what followed next was complicated.
it was anticipated that virtual teams using information technology could work together without physically moving across the country boundaries Infotech: The acquisition was seen as an opportunity to improve the infotech infrastructure of Tata Tea. and Russia. Tata tea is in fact smaller than Tetley. and organic teas and decaffeinated teas. Therefore. It acquired Tetley by the means of a leveraged buy put. These additions were thought as useful introduction to Indian market. 47 . Technology: Tetley would give Tata Tea access to specialty products such as: flavored teas.1 Initial Ring Fenced Structure Tetley initially continued to operate. It envisaged that Tata Tea could help in sourcing or supplying Tetley requirements of Indian teas. after the acquisition as a separate company with its own goals and objectives predominantly as a consequence of a ring fenced structure chosen for the acquisition. the Middle East. • Purchasing: Tetley bought about 8000000 kgs of Indian teas annually fragmented from sources. in the early days following the acquisition. Tata tea put up only one third of Tetley acquisitions cost with banks and lenders putting in the balance funding. herbal teas. Cost Synergies: Both companies could jointly relocate manufacturing of teas both packets and bags and utilize a supply chain approach and common platforms for the InfoTech. Tata Tea could help launch Tetley in India. traditional bastions of Tata Tea. in terms of what you can and can’t do as long as the high leverage continues. improving the connectivity to remote plantations adopting an Enterprise Resource Planning System to create a global supply chain based on Tetley’s SAP based ERP solution. • • • • 1.4. guiding and Watching over Tetley’s operations. MIS.When the Board finally sat down to plan the integration the following synergies between Tata Tea and Tetley had been identified. While the geographic spread of operations were a constraint in moving people around. and finance conditions. Tata Tea restricted its role to an advisory one: • • • Monitoring. Brands: Markets where only one or the other company had worked singly could be developed jointly leveraging the internationally known as Tetley brand name. A leveraged buy-out has perforce certain limitations attached to it.
Tetley’s financial performance had been deteriorating with cash flows of pound 10 million in 1999. after having seen an encouraging performance by Tetley. Tata Tea decided to put in some more money from Tata Tea and Tata Sons into the acquisition by way of ‘quasiequity’. required Tata Tea to make some changes. However such attitude didn’t work. the first major blow was that Tata Tea would have to increase the amount of equity in the SPV to reduce the expensive debt. almost pound 100 million more than the next highest bid. 1.5 OPERATIONAL INTEGRATION By February 2002. Tata Tea realized that they would have to increase the amount of equity in the SPV to reduce expensive debt. 48 .A few months ago. In September 2001. incurred on the acquisition and simultaneously enhanced our ownership stake. The “seamless integration” was not working. From the results. The entire Tata Tea buying and blending team was trained in Tetley methods and the two companies began operating seamlessly in their area. the acquisition of Tetley was not going well. Tata Tea could finally begin contemplating greater integration. which brought down some of the very high-cost debt. Meeting the cash flow targets established during the merger was not going to be easy as tea was loosing grounds to sodas. At the same time the raw material was increasing. The pressure to generate increase in cash flow created intense pressure and conflict internally at Tata Tea and between the two organizations. In order for Tata Tea to be useful to Tetley in sourcing or supplying their requirements of Indian teas needed to have its people trained to know exactly what Tetley was looking for in terms of quality and process of the Teas required for their two blends. juices and coffee. because they were still to separate companies. The failure of Tetley to make the required cash flow targets. it was apparent that by all the metrics. Winners Curse and a Financial Shortfall It was clear that Tata Tea had paid too much for Tetley. it was clearly seen that a formal integration had to be done in order to drive out the synergies between the two entities. The only areas where Tata Tea and Tetley worked closely together were in the areas of tea buying and blending. The Tata Tea hence established a new post merger strategy in order to derive the synergies. The company also sold Tetley’s private label tea business in US to Harris Tea for 15 million pounds. coupled with the high debt burden. Tata Tea invested an additional pound 60 million of equity. With the investment of quasi-equity by Tata Tea and Tata Sons which brought down some of the very high-cost debt incurred on the acquisition and simultaneously enhanced the Tata Tea’s ownership stake. Tata Tea had hoped to achieve cash flows of at least pound 48 million in order to repay the principal and interest created by the leveraged buyout.
One good sign was that from March to December 2001. Tetley Group A parallel project team structure was also formed to look into specific areas of the integration process. the project coordinator team would see one member from BCG assisting Tata Tea. Tetley Group John Nicholas.K. Issues related to tea buying and blending. The “steering group” also included two nominees from BCG. it was finally the decision that there should be one entity with one central command. An apex “Executive Committee” of six people led the integration effort from the two companies. Deputy MD. Tata Tea.Tata Tea decided to hire the Boston Consulting Group to develop an Operational Agenda.D. Harmonization of personnel and human resources policies and an attempt to solve cultural issues created by geographic divide and British Colonization of India (5) Innovation and new product development. Senior officials from both the sides from Tetley and Tata Tea met in Goa to kick start the process of integration and develop a structure. CEO. Review of procurement.Tetley team. Tata Tea Percy SiganPoria. The senior officials also had to decide on how to begin restructuring global facilities and how to enter new markets. Also . Accomplishing these goals could bring two organizations closer together. Tetley Group Peter Unsworth. Tetley group had a 3% increase in sales and a 34% increase in EBIT. Tata Tea Ken Pringle . During this meeting they created a task force of neutral members (non executive board members). and related cost savings. headed the supervisory board. The problem was that Tata Tea was loosing market share itself to regional players and to HLL. 49 . Krishan Kumar. information technology and data management. The other members included: (1) (2) (3) (4) (5) Homi Khusrokhani M. whose tow main objectives were to launch a premium Tetley brand in India and to introduce Tetley branded iced tea in United States. BCG took its first steps by asking the top management at both entities to identify their strength and weaknesses. R. Teams were assigned tasks as: (1) (2) (3) (4) Assimilation of systems of financial. Rather than having two separate companies running their own business. packaging. The task force created was split up into teams to complete all aspects of the integration. The executive committee was in charge of the broad strategies and policies associated with the integration process.
A structure that facilitated joint working in several areas was implemented. (3) Ultimate phase would have been legal mergers which could be done once the debt in Tetley was reduced. Four cross functional teams with representatives from both Tata Tea and Tetley were set up. Creation of a structure: A structure was put into place to create a steering committee with several task forces reporting to it and comprising managers of both companies. the company carefully chose an approach to integrate the processes and explore synergies between the two companies with absence of any time pressures. They were closely monitored both internally and by the teams and also by the executive committee for meetings through at regular intervals. goals and synergies for both the companies and also a creation of a road map for capturing synergies and taking process further. Tata Tea and Tetley group agreed to merge the entities into a single entity and the first step began to integrate “operations”.1 The Integration Process Following the meeting. The emphasis throughout was on revenue and growth and not on cost reduction. The entire exercise was to complete in 18-24 months.1. Though the Tetley acquisition was perceived negatively by the market for the next three years. Integration of SAP environment between Tata Tea and Tetley was commenced to help in sharing the data under common platform and to facilitate decision making. while maintaining operational independence. The two companies would have a single CEO to look over the operations. (2) The second phase was devoted to actual working together and captures these synergies. Phased Integration Process Integration was to be completed in 3 phases (1) In the first phase. A common Mission-Vision-Values statement and strategy for both the companies was formulated after a debate in a joint managerial group of the two companies. which spelled out the way forward with measurable goals and estimated timelines. Each team had defined objectives for the processes under their charge.5. A well-thought through process was adopted for the integration of the two companies with some of the highlights being: Identification of common beliefs: An international consulting firm was commissioned to identify the common beliefs between the two companies and suggest ways to bring the two closer together. the end points were development of a common vision. 50 .
Four integration teams supported this Board. Chairman of Tata Tea. the end result of which was to have world-class processes that are endemic to the branded business.6 STRATEGIC INTEGRATION After the acquisition. In the early days following the acquisition. chairman of Tata Tetley and vice chairman and CEO of Tata Tea. But this is only at a conceptualization stage. This structure was then folded into the operations of both companies. communications. K. “I see us fusing all these entities into one super global company. deriving all the efficiencies of integration and imparting the necessary aggression in the marketplace to gain market share. Information Technology and Human Resources. Tetley initially continued to operate as a separate company with its own goals and objectives. In order for Tata Tea to be useful to Tetley in sourcing or supplying their requirements of Indian teas. It will take three to four years for the benefits of the acquisition to be felt. told the Economic Times. … seamlessly operating as one entity. Refinement of structure: The Steering Committee became a Supervisory Board reporting to the Board of Tata Tea. and the Support Team to look at finance. one. The entire Tata Tea buying and blending team was trained in Tetley methods and the two companies began operating seamlessly in this area. Krishnakumar. An intense benchmarking process was conducted in Tata Tea Tetley as well as other companies. and watching over Tetley’s operations. Tata Tea restricted its role to an advisory one: monitoring.” 51 .” Ratan Tata. best summarized the integration process when he said. finished products. 1. predominantly as a consequence of the “ring-fenced” structure chosen for the acquisition. The synergies between the two companies are very strong and bringing them together does make sense. Tata Tea needed to have its people trained to know exactly what Tetley was looking for. The only areas where Tata Tea and Tetley worked closely together were in the areas of tea buying and blending. delivery and distribution. in terms of the quality and prices of the teas required for their blends. We aren’t working on anything. the Global Supply Chain Team to handle raw materials. guiding. Commenting on the synergies soon after the acquisition. which started taking decisions on matters concerning both companies. R. a growth team having an agenda to drive geographical and product category growth and improve operational performance and the other three to drive common business processes. research.Some teams were given time-bound tasks while others worked on unification of some processes. These include the Commercial and Business Processes Team top streamline and standardize marketing. It may take a while to happen.
Tata Tea. Accomplishing these goals could potentially bring the two organizations closer together. The failure of Tetley to make the required cash flow targets. With the investment of quasiequity by Tata Tea and Tata Sons (the Tata group’s primary holding company). The senior officials also had to decide on how to begin restructuring global facilities and how to enter new markets. it was apparent that by all metrics. the Tetley group had a 3 percent increase in sales and a 34 percent increase in EBIT. R.By February 2002. Commenting on the decision to hire a consulting firm. Rather than have two separate companies running their own business. The Executive Committee was in charge of the broad strategies and policies associated with the integration process. 52 . The consultants will map out a blueprint that will help us with logistics and marketing plans that keep both identities intact. which brought down some of the very high-cost debt incurred on the acquisition and simultaneously enhanced Tata Tea’s ownership stake. there is a need to synchronize operations. Meeting in Goa Senior officials from both sides from Tetley and Tata Tea met in Goa to kick-start the process of integration and develop a structure. Tata Tea could finally begin contemplating greater integration. “We recognize that with the acquisition of Tetley. The company also sold Tetley’s private label tea business in the United States to Harris Tea for $15 million. it was finally the decision that there should be one entity with one central command. K. The other members included Homi Khusrokhan. coupled with the high debt burden.4 During this meeting they created a task force of neutral members (nonexecutive board members). Krishnakumar’s position. because they were still two separate companies. The integration effort was led by an apex “Executive Committee” of six people from the two companies. Tata Tea invested an additional £60 million of equity. vice chairman. One good sign was that from March to December 2001. required Tata Tea to make some changes. whose two main objectives were to launch a premium Tetley brand in India and introduce Tetley-branded iced tea in the United States. The problem was that Tata Tea was losing market share itself to regional players and to Hindustan Lever Limited. BCG took its first steps by asking top management at both entities to identify their strengths and weaknesses. In September 2001. BCG’s suggestion of having one entity stood in contrast to the Tetley Chairman and Tata Tea Vice Chairman. Tata Tea decided to hire Boston Consulting Group (BCG) to develop an operational integration agenda. Krishnakumar. the acquisition of Tetley was not going well. Krishnakumar said. The supervisory board was headed by R. The first major blow was that Tata Tea would have to increase the amount of equity in the SPV to reduce expensive debt. K. The “seamless integration” was not working.
“This [the merger] is move rather quickly on functional integration. began to integrate operations. and also the creation of a road map for capturing synergies and taking the process further. Each team had defined objectives for the processes under their charge. goals. Percy Siganporia. Integration of the SAP environment between Tata Tea and Tetley was commenced to help in sharing of data under a common platform and to facilitate decision making. Ken Pringle. 53 . These were closely monitored both internally and by the teams and also by the executive committee for adherence through meetings at regular intervals. The second phase was to be devoted to actually working together to capture these synergies. Four cross-functional teams with representatives from both Tata Tea and Tetley were set up. CEO. Tetley Group.” said Ken Pringle. Tata Tea. The Integration Process Following the meeting. and data management. and John Nicholas and Peter Unsworth of Tetley group. which could be done once the debt in Tetley was reduced. as a first step. In the first phase. The phased integration process The integration process was to be completed in three phases. the end points were the development of a common vision. and. The steering group also included two nominees from BCG. Also. information technology. the project coordinator team would see one member from BCG assisting the Tata Tea-Tetley team. Teams would be assigned tasks such as • • • • • • Assimilation of systems for financial. packaging. The third and ultimate phase could be a legal merger. which spelled out the way forward with measurable goals and estimated time lines. The entire exercise was expected to be completed within the next 18-24 months.managing director. Issues related to tea buying and blending. Review of procurement. Tetley CEO. Tata Tea and the Tetley group agreed to merge the two entities into a single entity. Tata Tea. and Innovation and new product development. and related cost savings. A parallel project team structure was also formed to look into specific areas of the integration process. and strategies for both companies. Harmonization of personnel and human resources policies and attempt to solve the Cultural issues created by the geographic divide and British colonization of India. deputy managing director. The task force created was split up into teams to complete all aspects of integration. The two companies would have a single CEO overseeing the operations of both companies.
Tetley is very process oriented while Tata Tea is quicker to respond and more action-oriented. known as the Growth Team. Specialty and herbal teas are high growth segments but in India they are a very small. Pringle emphasizes. Mr. IT and HR.” While Tetley is standardized. Tata Tea. who saw it as a faster and better brew. Tata Tea has strong regional brands and different blends for different areas as each region has its own taste preference. We can add to each other’s knowledge and skills and create business with better value prospects. “We have cut across individual operation areas and gone though an intense benchmarking process in Tata Tea. CHANGE MANAGEMENT AT TATA-TETLEY NEW MISSION. The end result of this exercise will be that we will have world-class processes that are endemic to the branded business. “Most consumers have a personal recipe for making tea and stick to the one brand that gives them that satisfaction. Tetley is well known for its packaging innovations. The Global Supply Chain Team will concern itself with raw materials. research.” Mr. taste preference is stronger than brand loyalty. “We have focused on bringing together skill sets of both teams. Khusrokhan. niche segment. it is tiny. Tetley as well as other companies.” For instance. Its round bags in the 1990s were received with greedy gulps by consumers. A fourth team. communications. In India. has been smooth for Tata Tea and Tetley.• • • • The Commercial and Business Processes Team will streamline and standardize marketing. In the US’s cold tea is the biggest segment but again in India. Nicholas says. Says Mr. is looking at geographical and product category growth. however. The name of the game is raising the consumers’ curiosity. “We are different but we are learning from each other. delivery and distribution and The Support Team will look at finance. arousing interest and encouraging them to try something different. For instance. VALUE STATEMENT 54 .” says Percy Siganporia. which is often an issue in many a merger or acquisition. Laminated packaging replaced cardboard and changed the consumers' perception on the freshness of tea. finished products. The cultural integration.
encompassing the widest definition of the category. constantly striving to be better and to do new things. and commencement of a formal process of integration. reach out to new consumers and keep the category vibrant.Our Values • • We believe that our customers and consumers define the success of our organization and that they should be top-of-mind in everything that we do. building a global business by leveraging and building our brands and forging partnerships to mutual advantage. and their role in adding to the well-being of people the world over We believe in earning the respect of all those who know us We believe in making a positive contribution to the people and communities our business touches We believe that by striving to deliver our vision and by living our values we shall create more valuable business and hence over the long term increase returns to our shareholders. Challenging … A state of mind throughout the organization.Their Vision. Tata-Tetley. Mission and Corporate Purpose Statement were framed by the Company's senior management in February 1999. "Challenging the World for Leadership in Tea". which will enable us to build stronger relationships with our existing consumers. 55 • • • • . "Challenging for leadership in tea around the world" 1.Not just in size. tea serving systems and retailing of tea. behavior and achievements 3. Much of this statement remains valid and is of considerable relevance even today. In 2002. The World. It marked the realization within the Company that " Customer is paramount". Leadership…. embodying a modified set of Values. creating relevant differentiation and confidently projecting clear brand identities. Through innovation. and that we should give them the freedom to achieve. but more importantly in the eyes of our customers and consumers. Tea…The product scope of our vision. We believe that our people are at the heart of our organization. through our thoughts. 5. 2. ideas. never being satisfied with the status quo. the "Supervisory Board" of Tata and Tetley put forth a new Vision Statement. With the acquisition of Tetley in 2000. ready-to drink teas. 4. in new ways and a principle by which we manage our brands in the marketplace. This formed the basis of the Company's direction and strategy over the past few years. the process of evolving corporate thinking onto a global canvas was initiated. the production and marketing of black and green teas. specialty fruit and herbal teas.The geographic scope of our vision. through clarity of direction and the creation of an informal. in line with the Tata Group Purpose. barrier free culture We believe in tea and in our products.
NEW CORPORATE GOVERNANCE SYSTEM Tata Tetley devised a new corporate governance structure and was managed by the Managing Director under the supervision. 2003. control and direction of the Board of Directors. The Board was set up the following Committees: a. As on March 31. Behavioral standards with external agencies and Social responsibilities as corporate citizen to be conducted. Ethics and Compliance Committee In addition the Business Review Committee (BRC) for the Company reviews the medium and long-term strategies of the Company and recommends/suggests changes that the Committee may consider necessary.Business transactions. It clearly specifies the norms under which. The basic objective is to ensure transparency in all dealings and the functioning of the management and the Board. The policies pursued focus on long-term shareholder value creation through integrity. Thus at Tata Tetley they took special care of our workforce. Audit Committee c. Executive Committee b. Tata Tea Ltd in 56 . TATA TETLEY EMPLOYEES Tea companies depend heavily on their employees especially the plantation workers.• The Vision and values which have evolved over time gives the desired impetus for sustainability thinking and is sharpened further through stakeholder engagements to arrive at key issues. The day-to-day operations are run by the Managing and Deputy Managing Director with the assistance of two Executive Directors. Remuneration Committee and e. Important issues relating to strategy are referred to and discussed at Executive Committee meetings which are chaired by the Vice Chairman. The Company also has a Management Committee and each of the Strategic Business Units (SBUs) have their own Board where all issues relevant to the SBU are discussed TTL is guided by the internal code of conduct as framed by Tata Sons Ltd. social obligations and regulatory compliance. Investors Grievance Committee d. (TSL) covering all its employees at various levels. In addition the corporate governance code as enunciated in the Listing Agreement entered into with the various Stock Exchanges is adhered to.
Occupational diseases are treated in estate hospitals. All permanent employees other than executives. There was been a significant reduction in the work force due to decrease in employment of temporary workers. Health and Safety The disease profile of different workplaces are maintained regularly and monitored routinely. subordinates and clerical staff are included). 1. recreation.India had a total permanent full-time workforce of 56. Labor/Management Relations Unionised employees constitute 98% of the total permanent workforce. The Company discusses various work related issues with the trade unions and involves them in making decisions on issues like welfare measures. Employees also have access to well stocked libraries. tasks. etc.02.784 temporary blue-collar employees.500/during 2002-03 towards these issues. The Company however does not keep a record of workers employed by contractors for carrying out various activities. junior management staff. Retired executives and their spouse enjoy medical insurance benefits comprising both hospitalization and domiciliary components. which has provisions for recognizing ideas of use to the Company. TTL paid out Rs. Any accident that may take place during the 57 . rehabilitating victims of cyclones and other natural disasters. The Company promotes organizational communication through the publication of in-house magazines: Tatean (published for the whole company). holidays. providing scholarships varying between Rs 500 and Rs 1000 per month to employees' children studying in intermediate classes. Employee benefits TTL had set up the Tata Tea Employee Welfare Trust with a corpus of over Rs 1 million to promote employee (including casuals) welfare through measures such as providing medical assistance to non-executive employees and their dependants. in addition to drawing pension. WinIdea.031 supplemented by 64 employees working on contract and 20. TTL consults and negotiates either directly with recognised trade unions or through associations like Indian Tea Association (ITA) or United Planters' Association of South India (UPASI). etc. Samachar (published primarily for the eastern plantations) and Seithigal (published primarily for the southern estates). The Company invites employees to share their ideas through a formal suggestions scheme. recreation clubs. and employees on contract are represented by independent trade union organizations (labour. and reduction of the permanent workforce by about 2% as part of cost control measures. etc.
A proposed HIV / AIDS policy for Tata Tea has been drafted pending top management approval. and Quality Control Operating Procedure for Equipment. Sales Effectiveness.course of employment are reported to the authorities concerned as per requirement of the Factories Act. Training and Education TTL provided 2.29 mandays of classroom training per executive during 2002-03. All factory workers are medically checked once every year and records maintained. It invests in updating employee skills by nominating them to various internal and external programmes as listed in below: MANAGEMENT DEVELOPMENT PROGRAMMES • Organizational Renewal for Competitiveness 58 . Handling of Chemicals. There has been one case each of work related fatality during the year under review in both NIPO and SIPO. Taxation and Audition Computer Refresher Course. Other indices pertaining to executive training were also given. Seminars on Finance. 1951 / Workmen's Compensation Act. Link Workers (and Mahila Mandal in NIPO) discuss various health and safety issues in the presence of doctors and welfare officers in their monthly meetings. Strengthening Selling Skills Workshops. Illustrative examples of classroom training for nonexecutives are shown below: TRAINING FOR NON-EXECUTIVES • • • • • • • • Professional Selling. Health & Hygiene Work Shop. Training to non-executives is mostly on the job training and hence difficult to quantify. MS Projects Training Programme on Effective Purchase Procedures Safety. Training Programme on Energy Efficiency Training on Quality While Tata Tea did not currently have any formal career ending training programmes. These associations have representations from staff and workers on the estates. Cleanliness of the Work Area. Calibration and Maintenance Procedure of Lab Instruments. it is committed to helping employees in managing career endings through generous employee separation schemes. 1948 / Plantation Labour Act. 1923.
• • • • • • • • • • • • • • • • • • Managing and Measuring Business Performance Continual Improvement through Cost of Quality Effective Marketing Sales Management Labour Reforms and Social Safety Net Sexual Harassment at Workplace Building a Truly Value-Driven Organization Creative Excellence in Management Competency Mapping and Assessment Accounting Standards and Its Practices Training on TBEM Corporate Public Relations Corporate Governance Issues for Managers Core Managerial Skills for Health Professional Manufacturing Management Plant level Energy Audit Practice for Energy Conservation Supply Chain & Logistics Management for Global Trade IT for Agri-Business The Company nominates its employees to training programmes conducted by reputed institutions such as the IIMs. ASCI. in addition to organizing various in-house programmes of general interest. XLRI. NITIE. etc. POST MERGER 59 ..
EXPLORE LEARN REALIZE THINK RECOGNIZE DESIG N PRE MERGER LESSONS LEARNT 60 .
and the management styles. Although the merging entities give a great deal of importance to financial matters and the outcomes. honest and consistent communication strategy can pave the way. The organizational culture plays an important role during mergers and acquisitions as the organizational practices. Ironically studies show that most of the mergers fail to bring out the desired outcomes due to people related issues. The pre acquisition period involves an assessment of the cultural and organizational differences. which will include the organizational cultures. role of leaders in the organization. The mergers often prove to be traumatic for the employees of acquired firms. compensation selection and turnover. productivity leading to merger failure. which may clash owing to the M&A activity. layoffs. uncertainty in the environment. The human resource system issues that become important in M&A activity are human resource planning. Each organization has a different set of beliefs and value systems. decrease in the morale. stress on the workers. Mergers and acquisitions have become a common phenomenon in recent times. downsizing. Due diligence is important in the first phase while integration issues take the front seat in the later. and differences in organizational structure and changes in the managerial styles. performance appraisal system. The M&A leads to stress on the employee. survivor syndromes. The exposure to a new culture during the M&A leads to a psychological state called culture shock. employee development and employee relations. motivation. cultural differences. A merger of the size like HP-Compaq has implications for the workforce of these companies across the globe. which is caused by the differences in human resource practices. The usual impact is high turnover. A well planned process built on the foundations of an open. managerial styles and structures to a large extent are determined by the organizational culture. information system issues etc. The M&A activity is found to have serious impact on the performance of the employees during the period of transition. The human resource issues in the mergers and acquisitions (M&A) can be classified in two phases the pre-merger phase and the post merger phase.In an ideal merger. The employees not only need to abandon their own 61 . M&A activity presents a different set of challenge for the human resource managers in both acquiring and acquired organizations. The uncertainty brought out by poorly managed HR issues in mergers and acquisitions have been the major reason for these failures. life cycle of the organization. Literature provides ample evidence of difference in between the human resource activities in the two stages: the pre-acquisition and post acquisition period. The other issues in the M&A activity are the changes in the HR policies. the impact can range from anger to depression. HR issues are the most neglected ones. the newly created entity pools the best features of the two merging organizations.
The compensation issues may also involve legal angle. For example if the compensation in the acquired firm is lesser compared to the acquiring firm. The M&A activity leads to duplication of certain departments. sectoral differences and national cultural differences.HP COMPAQ 62 . In case of hostility in the environment the employees of two organizations may develop “us” versus “them” attitude which may be detrimental to the organizational growth. The increased political processes that may be underway in the organizations to sustain the importance of the various individuals and departments will add to the confusion. working in new departments and fear of working with new teams. The M&A activity also causes changes in their well defined career paths and future opportunities in the organization. In case of cultural clash. On the other hand if the compensation level of employees in acquiring firm is lower the employees may press to have equal compensation across all the divisions of the firm. hence the excess manpower at times needs to be downsized hence the first set of thoughts that occur in the minds of employees are related to security of their jobs. hence the employees find themselves in a completely different situation with changes in job profiles and work teams. Some employees also have to be relocated or assigned new jobs. IMPLICATIONS AND CONCLUSION . the acquisition will raise employee expectations (for the employees of acquired firm) of a possible hike in compensation which may not be realistic. The human resource systems vary across organizations owing to the differences in the organizational culture. This may have an impact on the performance of the employees.culture. changes in designation. This exposure challenges the old organizational value system and practices leading to stress among the employees. Research has found that at least two hours of productive work per employee per man day is lost during the M&A activity in the organizations. values and belief but also have to accept an entirely different culture. In certain cases like acquisition of a lesser known or less profitable organization by a better one can lead to feelings of superiority complex among the employees of the acquiring organization. career path. The pay differential can act as a de-motivator for the employees of acquiring firm and may have long term consequences. The uncertainty during the M&A activity divert the focus of employees from productive work to issues like job security. The employees of non-dominating culture may also get feelings of loss of identity associated with the acquired firm. Research has found that dissimilar cultures can produce feeling of hostility and significant discomfort which can lower the commitment and cooperation on the part of the employees. one of the cultures that is dominant culture may get preference in the organization causing frustration and feelings of loss for the other set of employees.
while the exact nature of the integration team changes as the integration process progresses and the heavy team structures of the integration planning and operational integration were perhaps not necessary for the strategic integration process. in turn. might also have prevented top management from underestimating the time and effort required during the strategic integration process to execute on the strategic initiatives necessary to compete effectively and simultaneously on multiple fronts against world-class competitors with fundamentally different strategies and capabilities. While understandable in light of the heavy demands on everybody involved during the operational integration process. These should have been kept in place for the time necessary to execute the strategic integration process. It was found that the process of formulating the integration logic and performance goals was generally well carried out. however. 63 . Yet. we found an even weaker feedback loop back to the longer-term performance goals. With the benefit of hindsight. as well as a failure to pay sustained attention to executing the multi-year strategic activities necessary to meet the longer-term goals. This. Because the strategic integration process was not clearly recognized as a distinct one by top management. and the opportunity costs of the acquisition integration not fully appreciated. The pre-clearance process of establishing the integration planning approach and the integration tools developed for that purpose were first rate and recognized as such by many observers. and from testing the new corporate strategy with key customers. Victory was claimed too soon. By splitting part of the integration team and focusing it on starting to execute the key multi-year initiatives the feedback loop necessary to keep the acquisition integration ahead of environmental change would have been much stronger. a weak feedback loop prevented top management from timely revisiting the initial assumptions on which the – perhaps too explicitly stated – longer-term performance goals were based. it was found that the feedback loop between the operational integration process and the process of formulating the performance goals could have been stronger.Analysis of the strategic dynamics of the HP-Compaq acquisition integration in terms of four key processes and feedback loops between them presents a mixed story of significant progress but also of key unresolved issues. the opportunity to increase top management’s bandwidth resided in the capabilities for large-scale change developed by the integration planning team. The operational integration process similarly was executed quite well and beat the short-term goals set for the merger. Viewing the execution of the acquisition integration process primarily in terms of the operational integration process prevented top management from clearly seeing the need to augment its own bandwidth. raising top management’s continued alertness to the rapidly evolving competitive challenges.
as well as providing insight in why intelligent and hard driving top managers may fail to pay enough attention long enough to the strategic integration process offers potentially useful guidance for the top managements and boards of directors of other companies contemplating major acquisitions and the management of their strategic dynamics. For this. It was ensured that HP can take advantage of the technology to move up the value chain and HR was developed as 64 . which was originally rolled out in 2000 and has around 141. the Clean Room team constructed training modules that managers could use to get their newly appointed team up to speed on the company. but the company put a raft of other initiatives in place. all spread across the globe. received two million hits on day one of the merger. handheld and desktop PCs. The team adopted an HR strategy and an HR plan that tackled these issues one by one. Here. It included training materials which enabled sales people to go out and represent the company to customers in an appropriate way.000. It enabled HP to disseminate a mass of information during the run-up to the merger which included the rationale behind the move and the role employees could play within the new organization. not much could have happened without the intervention of HR. HR’s role remains pivotal for the success of the merger. The need to focus employees meant it was vital to have the necessary communication and information channels in place. is never easy. The self-service HR portal. “All organisations know that the success of a merger is down to the people-you have to get your people focused in the right way.” A huge amount of core HR work was planned and executed. cultures and product lines. At the planning phase. But the most effective delivery mechanism was its intranet employee portal. a virtual team was assembled from both companies to plan for the merger. The Fast Start sessions were further followed up with a Fast Forward programme to have a smooth transition into the final phases.000 users. the role of feed-back loops in managing the strategic dynamics of acquisition integration and the role of the integration planning team. This included harmonizing terms and conditions and implementing new job architecture and a new performance-management system right across the organization.000 employees and Compaq 65. It also strengthened the culture. Traditional media such as posters and leaflets and regular briefings from senior executives did their part. the most significant of these from a people perspective was its Fast Start seminars. EVALUATION OF THE CHANGE MANAGEMENT AT HP COMPAQ Merging two workforces. According to Mike Taylor. Clean Room was developed. HP had 88. but the global scale of the HP/Compaq merger made it a mammoth task.Highlighting the importance of the four processes involved in acquisition integration. spanning printers and storage devices to notebook. These programmes were developed within HR to help organization meet its business objectives. @HP. HR director for HP UK & Ireland states. The portal was a 24/7 tool which helped prepare for the merger.
culture was a huge issue and had to be handled very carefully. One of the major challenges was to ensure the best of both side’s processes and practices were adopted. Tata was quite aware that it needed to be sensitive to the potential cultural challenges of combining the two groups. they adopted a focused approach to blend the two cultures. Tetley people would complain about being run by Tata which knew only about India and nothing about Western markets. HP employees also wanted to know about the decision making process and the components of product lines and how they would be supported. For instance. Tetley is very process oriented while Tata Tea is quicker to respond and more action oriented. despite being the senior partners. After the merger. Initially. Now HP is a complete mix of pre-merger HP and pre-merger Compaq built in and integrated across the organization. They 65 . The deal was a rare example of an Indian company taking over a larger British group. it would have been time consuming so they took the best from whichever world and went with it. from Tata’s side was the fact that they wanted to understand the global distribution system. The seminars worked at a strategic level but were also tactical to get people thinking about how they were going to operate. • • For one. with speed and agility among the new company’s core values. The merger was undertaken on two counts. HP used an “Adopt and Go” approach when it came to deciding on processes which meant that instead of saying ‘those processes could be improved let’s design a new one’. which is often an issue in a merger or acquisition. as they wanted to take Tata Tea to the global markets. The second reason. Both the groups were aware of the culture difference that existed and rather than trying to dominate each other.The year 2000 saw the Tata group acquire the Tetley group based in UK where the deal. The companies were different but were learning from each other. For example. Tata executives would complain about being kept waiting when visiting Tetley’s UK head office reception centre. IMPLICATIONS AND CONCLUSION-TATA TETLEY The international marriage – success lies in complementing each other . has been smooth for Tata Tea and Tetley. Meanwhile.genuine business partners.” The cultural integration. Tata Tea had their global ambitions well in place. was closed for 271 million pounds.
while going for a merger activity. This actually helped Tata Tetley improve results. From due diligence to integration. BIBLIOGRAPHY 66 . Thus. so this is a time to be happy”. The key learning’s from this merger were – pre-estimating the importance of cultural differences.appreciated and worked towards adding to each other’s knowledge and skills and create business with better value prospects. adopting a non-threatening approach and absence of time pressure. It isn’t enough to say. The best part was that both the companies decided to leave behind the separate cultures of Tata and Tetley and move towards defining a single company. The Merger was being seen as something beneficial for both the parties given the synergies that were expected. Conclusion Different cultures make different assumptions about others based on own values. “We are two big companies coming together to form a giant. being able to qualify and quantify cultural differences and synergies is the key to protecting shareholder value and reducing the risk of failure and a happy and everlasting merger. It was the first step towards a merger. it is important to see them with our eyes not theirs.
BOOKS 1.hp. Strategic Organizational Change (by Michael A.com/our-brands/brands-overview/brandbrandid=fde0caaa-acb6-4094-ad53-0481902a6d19 detail? 67 . http://www. http://www.compaq. Luecke) 3. Beitler) 4.tataglobalbeverages.in/ 5. http://www.com/country/index. Managing Change and Transition (by Richard A. Managing Transitions: Making the Most of Change (by William Bridges) 5.html 3.google. Change Management (by Jeff Hiatt) 2.in/ 4.tata.co.com/ 2. https://www. Kotter) WEBSITES 1.http://www. Leading Change (by John P.