Merging Two Companies Into One

Merger & Acquisition The author of this report has been asked to do an assessment that involves the author's company acquiring a major competitor. The person piloting the acquisition has just asked the author to do a few things. Those things include an overview of the issues that would exist in merging the two organizational structures, the compensation systems for the two companies and so forth.

The author is asked to recommend the tools to help manage things like stress resulting from the merger, the sharing of information internally about the merger and the merger process itself. There is also the concept of evaluating how the merger is going in general. The reasoning and justification for each step will be explained along the way. While merging the operations and cultures of two businesses can be very difficult, it is possible to do well if done diligently and carefully.

Analysis One major hurdle when it comes to merging two companies is the fact that the company that is being merged will most likely be on edge. It could very well be that the company being bought was just a hostile takeover or a strategic acquisition. The acquired company may very well be doing fine in the grand scheme of things. However, many companies that are being acquired are not doing so well and sometimes they are actively looking for acquiring companies to snap them up.

Indeed, this can lead to a lot of stress, rumors and other issues within the organization being acquired. To be sure, there is going to be a lot of redundancy and other issues to deal with when a company is being bought but whatever can be done or said to ease the minds of the people in the company being acquired should be done.

They should be assured that there will be a great amount of transparency and communication about the process, what is being done and why and the over timelines that will be adhered to as the process goes along. Anyone supplanted by the merger should be given the chance to shift to another role unless there is a reason why that is not prudent or wise (AJE, 2016). Another hurdle that would have to be dealt with is merging the structures and departments of the two businesses.

Obviously, the structure of the buying business will probably be the only (or at least the main) guide as to how the new and combined company will look. However, it is possible that elements from the acquiring company will be prominent as well. It really depends on what is best for the combined company and what is required given the elements of the two companies being combined.

In any event, the single combined business will almost surely look more like the buying company rather than the acquired company when all is said and done. Also, the transition from the separated companies to the combined companies needs to be done in a neat an orderly way so as to not upset the proverbial apple cart. Decisions will have to be made, however, when it comes to redundancy and so forth.

Indeed, each company will have a Chief Executive Officer and the one from the acquired company will surely be let go or at least demoted under the new company (AJE, 2016). Another set of structures that can be difficult to merge are the company cultures. Company cultures in the same industry might be similar but they can also be very different. Leadership styles between the two companies may be different as well. For example, one company's leaders might be transformational while the other company's might be more transactional.

Mixing and melding the two in such cases can be tricky. Merging of other things like compensation structures, time off accruals and so forth can be hard as well. Generally speaking, keeping a unified structure for everyone is optimal but there might be some grandfathering and transition schedules necessary to ease the move from one structure to another (Stanford, 2016). The tools that can be used would largely center on tracking metrics and seeing what new assets the company has acquired. Assets can be both tangible and intangible.

Tangible assets would include computers, desks and so forth. Intangible yet realistic assets would include the knowledge of the employees, customer lists and sales leads. These assets need to be inventoried. When it comes to knowledge of employees, the skills, traits and so forth of the acquired employees should be assessed so that they can be placed within the new structure or even make a decision as to who will be let go if layoffs are needed.

Other tools that can be used would include surveys of the employees (both pre-existing and acquired) to measure their mood and perception of what is going on. What is found out from these questions can be used to react in the proper way and to calm the nerves and apprehensions of employees.

Where the employees will work, how they will work, who they will report to and so forth should all be figured out as quickly as possible and the proper introductions, training and so forth need to be conducted and reinforced as the merger process.