With a rapid growing business industry now, It is important for all organizations to maintain a well trained and effective human resource team as it is directly affiliated with the personal policies and practices that influences the workforce. Today we will be focusing on two strategic issues that HRM faces: 2. Merger and acquisition
2. MERGERS AND ACQUISITION
Mergers typically involves two companies usually smaller scale companies joins arms and becomes one to attain better growth for the company. Acquisition is an action where a company buys over another company’s ownership and controls the firm thereafter.(Investopedia,2014)
2.1 MERGER AND ACQUISITIONS: Advantages
The most obvious advantage would be the staff skills and knowledge implemented and shared for companies’ increment in revenue, this will also make up to the short falls in the individual organization skill set. By merging, company will also be able to generate and enhance creative and innovative products for the company. The HRM team can now share their individual ideas together to create a more positive work environment for all employees as well as prepare the necessary training and development for employees that will give both employees of the merging companies the same knowledge of new technologies, new working style, new compensations and benefits, better incentives and this will also give the HRM opportunity to communicate with the employees and provide them with the necessary assistance. As each company’s offer individual benefits the HRM Executives may now request for equal incentives for it’s employees as compared to the merging company. For instance if company A offers no health insurance to its employees and Company B provides it’s staff with a high premium health insurance, the HRM of company A may now request for the same benefits for the employees that will then motivate the staff to perform better at work that will eventually increase the overall revenue for the company.
2.2 Mergers and acquisitions: Challenges faced by HRM
While one would expect that a merger would bring about a growth quite easily, there is also a high risk of a major short fall of the company’s goals, productivity and then revenue. Every organization will carry its own unique working culture. When merging occurs the employees will face culture clashes. Bringing two different cultures together will definitely cause frictions. For instance lets take the merge of Delta airline and Northwest airlines. Delta is the only major U.S. carrier that is predominantly nonunion, while the vast majority of Northwest's workers have been union members for generations. Delta gave its employees the freedom of choice says mike Campbell, vice president of HRM DELTA. The high management had a very strong relationship with its nonunion workers that brought a positive reputation to the brand that has never encountered a strike. Northwest employees were concerned of losing their contractual protection if they were to sign a common labor contract where a mediator will determine who gets the best jobs, schedules and pay. Meanwhile, flight attendants from Delta and Northwest continue to work under separate contracts, each with their own work rules, and they cannot be scheduled to fly on the same airplanes. As both the delta and northwest had their own working cultures, flight attendants of delta airlines poured the requested drinks. Northwest attendants just handed over the can. (Mouawad J, 2011) The management failed to notice that the employees do not have a good working relationship with each other and with two different standard and quality provided by the same brand will affect the customers satisfaction and this will create a bad service reputation, as the customers will expect the same service provided from their previous experiences. This will then disappoint the customers and lose their sales in the future. (O’Toole J,...
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