Case Study:
In the past, the decision criteria for mergers and acquisitions
were typically based on considerations such as the strategic fit of
the merged organizations, financial criteria, and operational
criteria. Mergers and acquisitions were often conducted without
much regard for the human resource issues that would be faced when
the organizations were joined. As a result, several undesirable
effects on the organizations’ human resources commonly occurred.
Nonetheless, competitive conditions favor mergers and acquisitions
and they remain a frequent occurrence. Examples of mergers among
some of the largest companies include the following: Honeywell and
Allied Signal, British Petroleum and Amoco, Exxon and Mobil,
Lockheed and Martin, Boeing and McDonnell Douglas, SBC and Pacific
Telesis, America Online and Time Warner, Burlington Northern and
Santa Fe, Union Pacific and Southern Pacific, Daimler-Benz and
Chrysler, Ford and Volvo, and Bank of America and Nations
Bank.
Layoffs often accompany mergers or acquisitions, particularly if
the two organizations are from the same industry. In addition to
layoffs related to redundancies, top managers of acquiring firms
may terminate some competent employees because they do not fit in
with the new culture of the merged organization or because their
loyalty to the new management may be suspect. The desire for a good
fit with the cultural objectives of the new organization and
loyalty are understandable. However, the depletion of the stock of
human resources deserves serious consideration, just as with
physical resources. Unfortunately, the way that mergers and
acquisitions have been carried out has often conveyed a lack of
concern for human resources.
A sense of this disregard is revealed in the following
observation:
Post combination integration strategies vary in tactics, some
resemble to “marriage & love’ but in reality collaborative
mergers are much more hostile in implementing forceful decision and
financial takeovers. Yet, as a cursory scan of virtually any
newspaper or popular business magazine readily reveals, the simple
fact is that the latter are much more common than the former.
The cumulative effects of these developments often cause employee
morale and loyalty to decline, and feelings of betrayal may
develop. Nonetheless, such adverse consequences are not inevitable.
A few companies, such as Cisco Systems, which has made over 50
acquisitions
(https://www.cisco.com/c/en/us/about/corporate-strategy-office/acquisitions/acquisitions-list-years.html),
are very adept in handling the human resource issues associated
with these actions. An example of one of Cisco’s practices is
illustrative. At Cisco Systems, no one from an acquired firm is
laid off without the personal approval of Cisco’s CEO as well as
the CEO of the firm that was acquired.
Q1
Investigate the approach that Cisco Systems has used in its many successful acquisitions. What are some of the human resource practices that have made its acquisitions successful?
1.
Most of the companies planning for acquisition of another company check for the compatibility in strategic objectives and operational and financial criteria. However, the most important asset of a company i.e. its workforce is neglected. Cisco Systems understands the importance of its employees and has adopted adequate human resource practices to make successful acquisitions. CISCO has used Human centric approach for successfull acquisitions.The following strategy had led to better human resource successful implementation:
a. Retaining employees: Hr team works with the executives from the acquired comany to help the employees understand the organisation culture aand employment structure of the company
b. Works with internal Resources: They teach the employees to handle routine task such as employee set up in HR and pay roll systems.
c.Helps to reduce disruption and anxiety: Inorder to reduce disruption and anxiety of the transition process for new employees ,HR team are the first onsite representatives for the acquired company when the deal is anounced.
d.Electronic data: The hr team use of technology by storing data in electronic form which makes it easy to manage the work.
e. oreinetation program: They arrange oreintation and induction program for new employees joining from acquisitions.
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Case Study: In the past, the decision criteria for mergers and acquisitions were typically based on...
Case Study: In the past, the decision criteria for mergers and acquisitions were typically based on considerations such as the strategic fit of the merged organizations, financial criteria, and operational criteria. Mergers and acquisitions were often conducted without much regard for the human resource issues that would be faced when the organizations were joined. As a result, several undesirable effects on the organizations’ human resources commonly occurred. Nonetheless, competitive conditions favor mergers and acquisitions and they remain a frequent occurrence....
Case Study: In the past, the decision criteria for mergers and acquisitions were typically based on considerations such as the strategic fit of the merged organizations, financial criteria, and operational criteria. Mergers and acquisitions were often conducted without much regard for the human resource issues that would be faced when the organizations were joined. As a result, several undesirable effects on the organizations’ human resources commonly occurred. Nonetheless, competitive conditions favor mergers and acquisitions and they remain a frequent occurrence....
CASE Study - Cisco Mergers and Acquisitions strategies In the past, the decision criteria for mergers and acquisitions were typically based on considerations such as the strategic fit of the merged organizations, financial criteria, and operational criteria. Mergers and acquisitions were often conducted without much regard for the human resource issues that would be faced when the organizations were joined.1 As a result, several undesirable effects on the organizations’ human resources commonly occurred. Nonetheless, competitive conditions favor mergers and acquisitions...
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