-by Vinodkumar Pralia, Section-D1, 341/47
Is the business relationship between the Statler Group and Kellogg-Champion Securities a lost cause? How should the consultants and the client handle the status meeting? The crux of the problem is the incorrect framing of tasks to be undertaken by Statler Group consultants. This has been the cumulative result of the lack of understanding of merger situations by Kellogg and over-estimation of the progress of the merger by Gray. Since Kellogg hasn’t been involved in the people aspect of his firm and also, this being his first exposure to a merger situation, his understanding about the complexities arising out of mergers is limited. Despite important post merger tasks like finalizing hierarchical levels, reporting structures, executive titles still remaining, Kellogg is of the opinion that the merger is almost done. On the part of Gray, he has taken client’s viewpoints as the starting without himself doing any fact-finding to ascertain the progress of the merger and the tasks remaining for completion of the merger. This has led to situation where consultants’ task formulation includes only policies realignment without considering status of the other tasks. It’s next to impossible for the consultants to complete their assigned task of policies realignment without settling of the hierarchical levels and reporting structure. Even if we assume that the policies realignment task is achieved somehow, it will not be in the client’s interest as once the hierarchy and reporting issues are handled, need for policy changes would invariably arise. To tap the synergies of the merger, the client has to settle these pressing needs before it looks into the policies. As the scope of the work is bound to increase with the addition of new tasks, the first thing Gray has to do is be present in person for the next meeting to show his seriousness to the client and also to show that Statler Group has competent people to do the job. He should present to Kellogg how important it is to complete the hierarchy and reporting issues before beginning with policies realignment. To back this he should use his team’s findings in the firm till now and other research data on mergers. This would help Kellogg to understand the complexities involved in a merger situation. He should tell Kellogg that a merger situation is bound to create conflicting interests in its employees and it would help the firm to remove arising uncertainties as soon as possible. Gray should acknowledge the fact that he over-estimated the progress of the merger and should present a proposal for reframing the engagement to include the additional tasks like recommending hierarchical levels and reporting structure. Along with this he should present in details how he plans to accomplish them. He should share with Kellogg that the most important decision criteria for the tasks should be maximize the synergies which can be derived out of the merging entities. One of the key actionable of his plans should be getting Kellogg to introduce the team to the senior management to have everyone on the same page as far as their mission objectives are concerned. The management should come out with circulars stating interim policies till the process is on. This will serve in bringing down anxiety of the employees arising out of the merger situation.