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Human Resource Management and Acculturation: The Glue that Binds Mergers and Acquisitions Alexis Lake MGT 5005 Human Resource Management and Development October 12, 2016
About Me ¤ Marketing, Communications, Public Relations Professional ¤ Graduate Assistant ¤ Interested in mergers and acquisitions (M&As)
M&A Experiences
Growth of M&A Activity ¤ M&A’s increasingly popular in today’s business world ¤ “Managers of acquiring firms reported that only 56 percent of their acquisitions could be considered successful when measured against their original goals” (Weber & Fried). ¤ Others report “30 percent to 70 percent of mergers and acquisitions fail mainly due to people and culture issues” (Jain, 2013 )
A Path for Acculturation ¤ Phases of a M&A ¤ Traditional roles of human resources ¤ Various types of M&A activities ¤ Three different levels of acculturation
Fluctuating responsibilities of the HR function
Steps in a M&A 1. Pre-Merger (Due Diligence) ¤ Cultural and Risk Assessment
2. Integration ¤ Change Management
3. Post-Merger ¤ Reinforcement
Roles of Human Resources ¤ Administrative expert in creating new policies, procedures ¤ Strategic partner in long- and short-term planning ¤ Employee champion in communicating changes and retaining key talent ¤ Change agent in implementing the transition plan, creating trust, and integrating company cultures
HR should always have a seat at the M&A table
Integrating Mixed Emotions ¤ “What people notice first are the differences between the two cultures and what makes their own unique” (Marks & Mirvis, 2011). ¤ Acquired employees: fear, uncertainty, job security, excitement, growth opportunities ¤ Acquiring employees: superior, faster, some job security concerns
“Always stay humble and kind”
Types of M&A Activities ¤ Extension ¤ Limited relationship, financial investment ¤ Examples: Oakley & Luxottica, Facebook & Instagram
¤ Redesign ¤ Parent company prevails, strategy and culture changes ¤ Examples: Ray-Ban & Luxottica, Anheuser-Busch & InBev
¤ Collaboration ¤ Coming together to create a new company ¤ Examples: Sunglass Hut & Luxottica, United & Continental
Levels of Acculturation Determine the cultural end state
Pluralism ¤ Culture largely left alone ¤ HR largely acts as the administrative expert ¤ Benefits, payroll, compensation Challenges still exist…
Integration ¤ Most common and most challenging ¤ Cultures changes ¤ Move quickly ¤ HR performs all four roles, focus on: employee champion and change agent Constant communications and involvement
Assimilation ¤ “Merger of equals or an acquisition with the intention of selecting best practices from the partner organizations” (Marks & Mirvis, 2011). ¤ Collaborating with HR professionals “across the aisle” ¤ Assessment, policies, education, training Communicate and reward
Levels of Acculturation & HR Involvement Pluralism
Low
Integration
High
Assimilation
Higher
Post-Merger ¤ Reinforce and over communicate ¤ Surveys, assessments, lessons learned ¤ Model best behavior ¤ Train and reward
“The song that never ends…”
No One Size Fits All ¤ Approach every M&A differently ¤ Fluid role of human resources ¤ Continuous reinforcement
Results
• • • •
2 -3 year process Many employees retained Surveys conducted and overall positive results Lessons learned…
Results
• Too early to tell • Employees in “limbo” • Customer increase
Thank You! Questions?
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