Case: Molson Coors and Acquisitions
1. Using “HR Planning Notebook 12.2,” what do you think were the reasons for the acquisitions
in both cases?
2. Develop the HR plans under these two scenarios: a full integration of Kaiser, the brewery in
Brazil, and the hands-off acquisition of Creemore Springs.
Merger Goals Kaiser Merger
Springs Merger
Access to new markets Yes
Growth in market share Yes
Access to new products Yes
Access to management talent No
Enhanced reputation No
Reduction in operating expenses No
Access to distribution channels No
Access to new technologies No
Reduction in number of competitors Yes
Access to new brands Yes
HR Plan Kaiser Merger
Contingency  Merger coordinator should be
Plan Brazilian.
 Contingency plan should outline
the chain of command,
communication methods,
procedures, and negotiation skills
training.
HR Due  Collective agreements
Diligence  Employment contracts
 Executive compensation contracts
 Benefit plans and policies
 Incentive, commission, and bonus
plans
 Pension plans and retirement
policies
 WSIB statements, claims,
assessments, experience rating
data
 Employment policies
 Complaints—employment equity,
health and safety, wrongful
dismissal, unfair labour practices,
certification and grievances
Creemore
No
Yes
Yes
No
Yes
No
Yes
No
Yes
Yes
Creemore Springs Merger
 Merger coordination needs to be
shared by Creemore and Molson.
 Plan should outline the chain of
command, communication methods,
procedures, and negotiation skills
training.
 Collective agreements
 Employment contracts
 Executive compensation contracts
 Benefit plans and policies
 Incentive, commission, and bonus
plans
 Pension plans and retirement
policies
 WSIB statements, claims,
assessments, experience rating data
 Employment policies
 Complaints—employment equity,
health and safety, wrongful
dismissal, unfair labour practices,
certification and grievances
Transition Team  Appoint a transition team to deal
with:
1. Urgency—Merger needs to be
swift and managed, which is
difficult with excessive levels of
Brazilian bureaucracy.
2. Information gaps—Language
issues in Brazil would require
interpreters.
3. Stress—Cultural issues need to be
managed to minimize the
paternalistic fear mongering by
Molson management; potential
for cultural clash is significant
because the merging companies
come from two different cultures
and countries; also need to
ensure that locals are not
terminated; unemployment
might be high and jobs might be
more difficult to find.
 HR policy review might uncover
complementary, duplicated, or
contradictory HR policies for the
merger companies.
Selection  The two most critical issues for
HR are related to:
1. Retention—Need to
determine the employees
who add value to the
company; this is difficult
unless there are Brazilian
managers involved who
know their employees.
2. Reduction—Need to
determine who can be
terminated; this is difficult
unless there are Brazilian
managers involved who
know their employees.
Compensation  Merge compensation systems?—  Merge compensation systems?—It
Probably not a good idea because
of the country differences in wage would merge its compensation
scales; just accept these
 Appoint a transition team to deal
with:
1. Urgency—Merger needs to be swift
and managed.
2. Information gaps—Need to bring
Molson up to speed on the
challenges of operating a
microbrewery like Creemore.
3. Stress—Ensure that local experts
with microbrewery skills are
retained, which will minimize the
stress of the transition; it should
appear like a status quo strategy,
that operations will run normally.
 HR policy review might uncover
complementary, duplicated, or
contradictory HR policies for the
merger companies.
 The two most critical issues for HR
are related to:
1. Retention—Need to determine the
employees who add value to the
company; specialty breweries have
more specialized tasks and so most
employees should be retained
because their positions are not
easily filled.
2. Reduction—Need d to determine
who can be terminated if there are
any administrative duplications.
is quite possible that Creemore
system with Molson’s but only if
 differences and maintain the
status quo.
 Adopt a totally new compensation
system?—This is a possibility but
would require a significant
amount of time to generate a
more equitable system.
 Create a new compensation
system?—This is a possibility but
would require a significant
amount of time to generate a
more equitable system.
 Status quo—Keep the
compensation the same so that it  Create a new compensation
reflects the local practices of
compensation that are linked to
Brazilian employment; this is
probably the best approach to
compensation assuming that
Kaiser does not have a unionized
environment; also this will
prevent any issues with
constructive dismissal where the
new compensation package is
materially different. All new
benefits must be weighed out with
a cost-benefit rationalization.
Performance  Not knowing—Remedied by more
communication; this is difficult
especially with language issues
to determine.
 Not able—The solution is
training; this is more easily
remedied for individuals who
were displaced in the merger
who need to be trained.
 Not willing—A strong case for
performance management
through feedback and incentives;
this is difficult to determine with
language issues as it reflects
intended non-compliance.
Creemore is not unionized; making
changes to a collective agreement
initially might be difficult,
especially if there is any perceived
unfairness to compensation and
job stability.
 Adopt a totally new compensation
system?—This might be a good
idea but would require Molson’s
and Creemore to negotiate a brand
new collective agreement, which
could be time-consuming and
costly.
system?—This might be a good
idea but would require Molson’s
and Creemore to negotiate a brand
new collective agreement, which
could be time-consuming and
costly
 Status quo—Probably not a good
idea since compensation would not
reflect the new status of managers
within the merged company; also
this will prevent any issues with
constructive dismissal where the
new compensation package is
materially different; all new
benefits must be weighed out with
a cost-benefit rationalization.
 Not knowing—Remedied by more
communication; at Creemore, this
should not be an issue.
 Not able—The solution is training;
displaced individuals would
readily identify their need for
further training.
 Not willing—A strong case for
performance management through
feedback and incentives; this
would not be an issue at Creemore
since the business essentially
remained intact and there
shouldn’t be issues of non-
compliance.
 Training and  Coaching and counselling—
Development Managers in Brazil would not
typically want this type of
training and would expect the
employees to change on their
own.
 Stress management—Managers
would also not recognize the
stress of employees.
 Coaching and counselling—This is
probably not an issue at Creemore
since there were very few
individuals who were displaced.
 Stress management—This is
probably not an issue at Creemore
since there were very few
individuals who were displaced.

Labour Relations  As above, Kaiser may have a  Creemore is probably not a

union in Brazil, but it is highly unionized environment and so
unlikely. compliance to a collective
 If a union exists, it will need to be agreement should not constrain
involved. relationships between management
and employees.
 If Creemore does have a union, it
will need to have active
participation with the transition
team.

Case: Outsourcing at Texas Instruments Canada

1. If you were Dawn, what decision would you make and why?
2. What are the advantages and disadvantages of the decision you made?

This is a case about managing the outsourcing decision. Dawn is advised to terminate the
existing agreement with the external provider and search for a new one. It is the most cost-
effective solution. Dawn should address the fact that perhaps there was no monitoring in place,
that the contract was poorly negotiated, and that selecting the vendor was done too carelessly and
quickly to result in a suitable outsourcer. Three main areas must be managed:
1. Selecting the vendor.
2. Negotiating the contract.
3. Monitoring the arrangement.

Selecting the Vendor

• Once outsourcing has been selected, the organization needs to do the following:
• Inform the staff of the affected function.
• Prepare a request for proposal (RFP).
• Invite internal and external bids.
• Establish a team to evaluate these bids.

Negotiating the Contract

• Customize and negotiate the outsourcing contract.
• Set performance standards or penalty clauses for the outsourcing company.
• Establish benchmarks for service expectations.
 – Response time.
– Response cost.
– Customer satisfaction ratings.

Monitoring the Arrangement

• Most frequent causes of outsourcing problems are:
– Poor service definition.
– Weak management processes.
• Establish a relationship to ensure the outsourcer acts in the best interests for the
organization, and has relevant knowledge of the organization.
• Check outsourcing company’s references.
• Demand frequent and accurate reportings.
• Conduct internal and external client satisfaction surveys.

Six Major Reasons to Use Outsourcing:

1. Financial savings
2. Strategic focus
3. Access to advanced technology
4. Improved service levels
5. Access to specialized expertise
6. Organizational politics

Some Questions to Consider:

• Are the anticipated benefits realized?
• What are the risks to service levels?
• What is the effect on employee morale?
• Does outsourcing reduce the value of the organization?