Importance of Mergers
The objective of this article is to write on the emphasis of effective of change management. The article talks about the importance of managing the organizational change in the merger of the two companies in Starbucks industry. Importance of Mergers: As the world is becoming more and more global, the big companies are going for the option of merging with other firms. The merging of companies is working quite well as it helps the both the companies to share their resources and work help each other out in running business successfully.
The mergers help in sharing the opportunities and risks together and expanding the market share. The different types of mergers include Strategic alli...
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...ances, Joint ventures etc. Well, where there are many benefits of mergers in companies, there are also management issues, which are to be handled. Although all these issues can be solved by negotiations, but the main adjustments that are to done is from the employees of the companies. Need to Change: Although through mergers, the companies manage to get profits but the work force and employees are the main people, those need to adapt to the new culture.
Before the mergers, both the companies have their own organizational cultures, norms and beliefs, which they are accustomed to. However after mergers, they need to compensate each other and establish a new culture, which suit employees of both the firms. This is the situation where HR comes and helps in adjusting the making the merger work smoothly. The effective organizational change consists of making the awareness of change. Then that change is to managed and directed. The employees are convinced to implement the change and then make sure that change is anchored in the organization. Change Process:
Now the problem is how to handle this change process that will take place from the merger of the two firms. The most suitable change that can help in better merger is incremental change. Through these incremental changes, the firm can make small improvements and that can be accumulated. These continuous improvements (KAIZEN), the firm can manage to make significant change over a time. Although, this takes long time, but it is quite low cost and less prone to risks. Such type of change will also help the employees to slowly adapt to new habits and cultures, and get more time in understanding the each other.
Most of the firms that follow these incremental changes also encourage participative change, in which employees are consulted and sometimes involved in decision-making process. The participative change helps in establishing better goodwill and commitment, and motivates them. Stages of Change Process: The main stages that are involved in organizational change are: Unfreezing, Moving and Refreezing. Now lets apply these stages in this case. In Unfreezing stage, the employees are needed to tell the need to change. They are communicated the advantages of adapting to the new change of merger.
The employees are needed to be convinced to change from the existing behaviors and adjust with that of new merger environment. Then comes the Moving stage. In this stage, the employees have to change to the new culture. This is considered as the most difficult stage, as employees have to adjust to new change. The employees often find change as one of the most difficult thing as they are accustomed to old way of doing job, and do not feel comfortable in changing to the new environment. The employees usually resist change and many employees opt to leave once they get depressed and unable to adapt to change.
Once the employees are done with the moving stage, they need to adapt to the Refreezing, in which are need to stick and anchor the new change. The new change is to be settled in the organizational structure and culture. The workers of both firms need to give up their previous practices and work together to adapt to new culture. Managing the Resistance of Employees: There are many reasons that make employees resist to change. They are not communicated the reasons for change. They think that change won’t give them any personal advantage, rather they think that their previous power will decrease.
So it is the duty of the management to establish strategies to take the employees along with them. The employees are needed to communicate the benefits of change, and tell them the personal advantage and improvement they are going to get from it. Special rewards are also needed to given to the employees in order to attract them to the change. Role of Stakeholders: The commitment of senior management is very important in order to make change successful. The top management has to show the employees a clear picture and communicate them of what is required.
The involvement of top management makes employees more sensitive, and get motivated. However, there different types of stakeholders, each having its own role and responsibilities. The one with the highest authorities are the Sponsor(s), who not only initiate the change, but also provide financial and other useful resources that are needed. The sponsor may be CEO of the firm. Then comes the Steering committee. They consist of functional heads and other executives, who role is to take the actions and make the decision regarding the change.
Then comes the Change manager. The change is dedicated person, who heads the daily operations and supervises the activities of the employees. He is directly involved with the people and has to effectively communicate the change. Role of Human Resource: Although all the above mentioned stakeholders play an important role in managing the change, however the HR people are the main players those need to work with the work force and help them adapting to the change. They organize special training programs, in which employees are taught of new working environment.
Special HR teams are made that communicate and collaborate the need of change. The people need to explain the need of change to the people and provide them all the necessary support and skills required for changing. The people, those who initially resist, are given more care and are convinced to adapt to change by encouraging them. The HR department creates a bridge between the top management and the employees, and communicates the change. Especially in case mergers, they need to solve the legislative issues and need to integrate the culture between the merged firms.
They design strategies to build understanding between the organizational cultures of the firms.
• Mike Bourne, Pippa Bourne (2007) Change Management in a week. London: Hodder & Stiughton Educational
• Donald L. Kirkpatrick (2002) Managing Change Effectively. Boston: Butterworth-Heinemann publications.
• Gunter Stahl, Mark Mendenhall (2005) Mergers and Acquisitions: Managing Culture and Human Resources: Stanford University Press • Ethan A. Winning (2005) HR’s Role in Mergers and Acquisitions. Retrieved February 18, 2008, from Website: http://www. ewin. com/articles/manda. htm