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Dark Side of Mergers & Acquisitions: Organizational Interventions and Survival Strategies

1930 Hill Bank was founded to serve SMEs 1950 First venture into International arena 1970 opened first foreign representative office 2002 Adopted Matrix based organizational structure

This bank was in the receivership of the Savings Deposit Insurance Fund It was acquired by Hill bank in 2004

Combine superior qualities of both the banks in different areas Generate strong synergies

Due to merger the employee personnel increased from 8,515 to 11,145 in 2004 The overall average age reduced from 42 to 39 The 35% of Hill banks employees who were below the age of 40 increased to 52% due to entry of newcomers

What were individual reactions to changes in the work environment during and after the acquisition Were there any specific HR decisions taken Were any managerial implications designated to reduce employee stress What were the characteristics, skills, and competencies of those employees who have survived in the organization after acquisition process

The interviewee was working in PNM bank for 14 years She was working in managerial position in IT department She was responsible for managing a specific team that was responsible for integrating the IT systems of two banks. The team involved mixed group of individuals working in IT departments either in PNM Bank or in HILL Bank.

The decrease in job motivation and individual performance loss of corporate identity
voluntary job exits were most frequently observed

The layoffs were organized in the form of compulsory retirements or change of duties There were not any positional changes in her department, but such changes occurred in other parts of the bank without any specific criteria presented for justification

The necessary information about the acquisition and its effects on employees specific career plans was not provided by management or HR representatives

Rather than specific skills or characteristics, having long-established personal networks within the organization helped individuals survival

Employee of HILL bank for 8 years


Left the job post merger She started her professional career in Human Resources Department in 1996, moved to a managerial position in 2002, and left the bank in 2004 to work in an equivalent position in another bank

The employees generally felt job insecurity and thought that their career plans would be disrupted due to reduced advancement opportunities in the new organization.
Some employees showed great resistance to change and eventually, they voluntarily quitted their jobs

Some terminations were made based on assessment of duplicated positions in the new organization.
For positional changes, two criteria were emphasized
fulfillment of the required job qualifications
individual performance level

The middle-level managers were seen as a bridge between top-management and employees They were provided with necessary information regarding the employee related aspects of acquisition process. Nevertheless, managers were not provided with any specific knowledge or training to cope with the prevalent employee stress

Survivors were those employees


who performed well in their jobs who had been working in the bank for a certain

period of time who had strong career orientations who were highly resistant toward uncertainty

Lack of timely and accurate information create uncertainty on the side of the employees The basis for the terminations should be justifiable and organizations should provide compensation to dismissed personnel In order to reduce prevalent employee stress, managers should provide both timely and honest information to their employees rather than the false promises that will just validate or invalidate rumors

They should act as a buffer between the organization and dismissed employees and ease the detachment process of these individuals It is crucial for employees to increase their personal visibility, to be patient and show resistance to uncertainty, to position themselves as team players who are open to changes