Organizational Behavior in Recent Years, Particularly During

Organizational Behavior

In recent years, particularly during the height of the high technology boom, the number of mergers and acquisitions skyrocketed to unparalleled heights. Acquisitions and mergers provide companies with financial benefits from items such as new products and technologies as well as enhanced productivity in the form of additional employees. However, acquisitions and mergers often impose changes, both expected and unexpected, on both companies and employees. In order for an acquisition or merger to be successfully completed and executed, both companies and employees need to be acclimated to the acquisition or merger and the challenges it presents.

This paper analyzes and examines the multitude of issues related to acquisitions of one company by another. Part II outlines a strategy to motivate employees for the change. In Part III, the issues expected to arise are discussed. Part IV discusses the human elements that arise out of an acquisition.

STRATEGY TO MOTIVATE EMPLOYEES FOR THE CHANGES number of strategies exist and may be implemented in order to motivate employees for the changes, both expected and unexpected, that frequently arise out of acquisitions of one company by another. First, managers need to keep the lines of communication open in order to handle the inevitable emotional fallout and uncertainty that is commonly associated with the announcement that a company is being acquired. ("Leading Through Uncertainty to Success"). Next, managers should keep employees focused on work and meeting customer needs, perhaps by re-negotiating performance objectives and incentives as well as deciding which projects should stop and which are to proceed. ("Leading Through Uncertainty to Success").

Third, employers need to take advantage of the fact that rules about "the right way to do things" often fade out in this transition period and should encourage employees to try out creative methods without the usual obstacles. ("Leading Through Uncertainty to Success").

Prior to and upon an acquisition, companies must ensure that the proposed deal is sound from strategic, economic, and implementation perspectives. ("Reduce the Risks of Mergers and Acquisitions With Buyer's Due Diligence on Company Management"). During this period, employers should assist negotiators and employees in understanding the potential impact of people, organizational and cultural issues to enhance the deal's chances for success. ("Reduce the Risks of Mergers and Acquisitions With Buyer's Due Diligence on Company Management"). In the integration planning stage of the acquisition, successful acquirers or merger partners need to create a comprehensive plan for all aspects of integrating their businesses and organizations. ("Reduce the Risks of Mergers and Acquisitions With Buyer's Due Diligence on Company Management"). Employers should help to ensure that people, organizational, and cultural issues are found, evaluated and resolved in a timely and expert manner. ("Reduce the Risks of Mergers and Acquisitions With Buyer's Due Diligence on Company Management"). Upon completion of the acquisition, employers should continue communicating with employees as well as executives in order to ensure that the maximum benefits associated with the acquisition are realized.

III. ISSUES EXPECTED TO ARISE

Various issues, both expected and unexpected, generally arise when one company acquires another company. First, there will likely be an adjustment to financial performance, both in terms of costs of the acquisition as well as an initial "adjustment period" while both companies are getting used to the integration. ("The SHRM Foundation"). Next, there may be an initial loss of productivity as the companies adapt to becoming joined and transformed into one company. ("The SHRM Foundation"). Third, there may be a clash of management styles/egos and/or an inability to manage/implement change. ("The SHRM Foundation"). Fourth, objectives/synergies may not be well understood initially, complicating and/or prolonging the adjustment period associated with the acquisition. ("The SHRM Foundation").