Effect Of Merger And Acquisition On Human Resource
- 2. Underlying principles for M&A transactions 2+2 > 4 Additional Value of “Synergy”- Merger of Bharti’s subsidiaries- Cellular and Infotel with itself
- 3. HORIZONTAL INTEGRATION : Buying a competitor- UB Acquisition of SWCL MARKET EXTENSION - New Markets Existing Service – Bharti’s foray into Rajasthan and Chennai New Services Existing Markets - Bharti purchase of Comsat (VSAT and Broadband services)
- 4. ‘ 95 ‘ 96 ‘ 97 ‘ 98 ‘ 99 ‘ 00 ‘ 01 ‘ 02 ‘ 03 ‘ 04
- 5. $3,800,000,000,000 AOL–TIME-WARNER KMART-SEARS CINGULAR-AT&T CHICAGO TRIBUNE – LA TIMES J – CHASE BANK, etc. etc. etc. etc. 70% 50% “ of these ventures fail”….Perry & Herd, 2004 “ ..had lower shareholder returns than their industry peers”. Lebedow , 1999
- 6. In last 2 years India make some of the remarkable achievements to overtake business in abroad Examples Tata motors acquired jaguar and land rover Aditya birla group acquired Atlanta based company called Novelis ( aluminum sheet maker ) essar steel merged with algoma steel even the it companies like Infosys , Tcs , Wipro acquiring small companies in europe
- 7. Reduction in mergers and acquisition from 148 to 125 in 2008 ( no of deals ) fall of sensex 16% About 50 % to 80% mergers fail due to : Inability to integrate people into a new cohesive new entity inability to make cultural integration attitudinal problems lack of commitment lack of trust poor morale
- 8. . Planning Combination Execution Issue Insecurity Uncertainty Adaptation Concerns What will happen to me? What’s going on around me? Am I ready to perform? How do I cope? Who’s looking out for me? How do I succeed here? Who are they? Who’s in control? Is the new better than the old?
- 9. Heskett, J.L., et al (1994). Putting the service-profit chain to work. Harvard Business Review, March-April, 164-174. Leadership Employee Satisfaction & Commitment Employee Quality & Productivity Customer Satisfaction & Retention Organizational Performance
- 10. Creating synergy between cultures such that employee at every level get satisfied By calling meeting sharing ideas of the employees of both the companies Using MBO ( management by objectives ) Pre mergers meeting must be held Try to tell why merger is neccesary Try to have creative , open , frequent one on one communication about the upcoming changes
- 11. Manager must ensure that employees perceive actions by management as being fair, unbiased and evenly distributed across both companies Manager must ensure that employees feel that management understands their acculturation demands and “feels their pain” and supports them as people Managers should strongly encourage employees to abandon the old and embrace the new
- 12. Recognize that employees practicing extra role behaviors and enjoying high job satisfaction When merging – look for partners whose company culture, practices, management styles are similar to your own – avoid discontinuity When acquiring – promote past managerial successes in similar endeavors to build employee trust that management has done this before and can be trusted to be successful
- 13. Thank u guys for listening