HRMin M&A
HUMAN RESOURCE MANAGEMENT’s
PIVOTAL ROLE in
MERGERS & ACQUISITIONS
Ajit Kumar
Mumbai, India
Abstract
Human Resource Management in Mergers & Acquisitions
Organizations of all sizes and across all industry sectors are increasingly looking to M&A to support their global growth strategies. The primary objectives for M&A’s are to cut costs, broaden market shares or take advantage of each other’s synergies and most typically to accelerate growth. Yet several studies indicate that more than half of all M&A deals fail to meet management’s strategic, operational and financial objectives.
The crux of the matter lies in the excessive focus on financial due diligence, risk assessments. Quite often, the people factor, i.e. issues that relate directly to people as workforce management and cultural integration, are left out of the due diligence process creating major challenges later during integration. In the past, HRM was expected to provide support in postintegration efforts, as well as increased business focus and knowledge to ensure that the full value of M&A deals is realized. For organizations, it important to believe in the fact that People are its key assets.
However, today we realize that, mastering the softer issues is the hardest part of integration and has the strongest influence on an M&A’s long-term success. HRM professionals are expected to be ready to manage the people, opportunities and the risks associated in these transactions. Managing organizational change and business / culture integration requires more attention by Leadership and HRM to M&A deals.
______________________________________________________________________________
HRM in M&A
By Ajit Kumar on May 18, 2013
2
Background
Mergers and Acquisitions (M&A) is an aspect of corporate strategy and management dealing with the buying, selling, and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector, or a new
PIVOTAL ROLE in
MERGERS & ACQUISITIONS
Ajit Kumar
Mumbai, India
Abstract
Human Resource Management in Mergers & Acquisitions
Organizations of all sizes and across all industry sectors are increasingly looking to M&A to support their global growth strategies. The primary objectives for M&A’s are to cut costs, broaden market shares or take advantage of each other’s synergies and most typically to accelerate growth. Yet several studies indicate that more than half of all M&A deals fail to meet management’s strategic, operational and financial objectives.
The crux of the matter lies in the excessive focus on financial due diligence, risk assessments. Quite often, the people factor, i.e. issues that relate directly to people as workforce management and cultural integration, are left out of the due diligence process creating major challenges later during integration. In the past, HRM was expected to provide support in postintegration efforts, as well as increased business focus and knowledge to ensure that the full value of M&A deals is realized. For organizations, it important to believe in the fact that People are its key assets.
However, today we realize that, mastering the softer issues is the hardest part of integration and has the strongest influence on an M&A’s long-term success. HRM professionals are expected to be ready to manage the people, opportunities and the risks associated in these transactions. Managing organizational change and business / culture integration requires more attention by Leadership and HRM to M&A deals.
______________________________________________________________________________
HRM in M&A
By Ajit Kumar on May 18, 2013
2
Background
Mergers and Acquisitions (M&A) is an aspect of corporate strategy and management dealing with the buying, selling, and combining of different companies and similar entities that can help an enterprise grow rapidly in its sector, or a new
References: 1. Why HR Can Make or Break Your M&A (2002) - By Andrew F. Giffin and Jeffrey A. Schmidt 2 By Ajit Kumar on May 18, 2013 11