HR Strategy for Bank Merger: Challenges and Solutions
This paper examines the human resources challenges and strategic solutions involved in merging two fictional financial institutions — We Will Hang Onto It Savings and Lenders Are Us Bank — with contrasting lending cultures. Drawing on the failed Daimler-Chrysler merger as a cautionary example, the paper identifies four core challenges: providing employee direction, reducing costs, improving efficiency, and attracting talent. It then outlines an effective HR strategy encompassing cultural assessment, ally recruitment, training and development, performance evaluation, and a restructured compensation model. The paper concludes with actionable recommendations for successfully integrating the two organizations into a single, fiscally responsible institution.
- Introduction: The Role of HR in Mergers and Acquisitions: HR's critical role illustrated by Daimler-Chrysler failure
- The Possible Challenges of Merging the Two Companies: Four key obstacles when merging banks with opposing cultures
- The Most Effective Elements of an HR Strategy: Assessment, training, evaluation, and compensation reform steps
- Recommendations for Successfully Merging the Two Entities: Prioritized action plan for integrating the two institutions
- Conclusion: Summary of HR elements needed for successful merger
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What makes this paper effective
- Uses a real-world case study (the Daimler-Chrysler merger) to anchor an abstract HR argument in concrete historical evidence, giving the analysis immediate credibility.
- Follows a logical, problem-solution structure: it first identifies specific challenges, then proposes matching HR interventions, and finally synthesizes them into actionable recommendations.
- Grounds its prescriptions in employee-level detail — anonymous surveys, manager evaluations, tiered compensation reform — rather than staying at a vague policy level.
Key academic technique demonstrated
The paper demonstrates applied organizational analysis: it takes general HR management theory (drawn from Mathis, Kroon, and Jackson) and maps it systematically onto a specific merger scenario. Each theoretical principle — cultural assessment, ally creation, training sequencing — is explained and then translated into a concrete action step for the fictional case, showing how academic frameworks guide practical decision-making.
Structure breakdown
The paper opens with a theoretical and historical introduction, then moves into a four-part challenge analysis, followed by a multi-element HR strategy section that covers assessment, training, evaluation, and compensation reform in sequential depth. A dedicated recommendations section consolidates the strategy into a prioritized action plan, and a brief conclusion restates the thesis. This funnel structure — broad context → specific problems → detailed solutions → summary — is a strong model for applied business writing at the undergraduate level.
Introduction: The Role of HR in Mergers and Acquisitions
One of the most important elements for any business is the human resources department (HR). HR plays a vital role in ensuring that the various concerns of employees are met so that the business can maximize its profits. Yet beyond this obvious function, HR plays a more important role during times of mergers and acquisitions, when it is essential in helping to ensure that the staff and management of both companies are able to merge their different policies and procedures into one unified framework. In most situations, the HR department can effectively blend two different cultures into a hybrid that produces the desired effect.
However, merging two different companies can sometimes be very challenging when the managers and staff of both organizations hold completely different views and attitudes about how business should be conducted. Once this occurs, the ability of the HR department to effectively consolidate the various policies and procedures becomes more difficult, and the chances of a successful merger decrease accordingly. A compelling example of this dynamic is the merger between Daimler and Chrysler. The new company was touted as a merger of equals, with Chrysler gaining a foothold in the European market while Daimler-Mercedes would benefit from access to the North American market. However, problems became apparent quickly, as Chrysler favored a more aggressive management strategy toward the automobile industry — one that clashed with the traditional, conservative values that Daimler had long been known for. The HR department was never able to reconcile the two different attitudes about management style. The company subsequently saw a decline in sales and market share as the conflicting views created internal conflict that hurt the overall bottom line. This illustrates how any merger or acquisition requires the HR department to successfully integrate two distinct cultures into one (Mathis, 2008).
In the case of We Will Hang Onto It Savings, its merger with Lenders Are Us Bank could prove problematic, as two organizations with very different approaches to lending are being brought together. We Will Hang Onto It Savings is purchasing Lenders Are Us to prevent it from going into liquidation, after the latter engaged in a number of questionable lending activities over several years that left it in a precarious financial situation once the economy slowed. Making the merger work requires that the HR department implement a strategy encompassing the views of both companies. To achieve this objective, it is necessary to examine the possible challenges of merging the two companies, identify the most effective elements of an HR strategy, and offer recommendations for successfully integrating the two entities.
Bibliography
Jackson, S. (2009). Managing Human Resources. Mason, OH: Cengage Learning.
Kroon, J. (1995). General Management. Pretoria: Kagiso Tertiary.
Mathis, R. (2008). Human Resource Management. Mason, OH: Thomas Southwestern.
What is a Compensation Package. (2010). Retrieved June 10, 2010 from Wise Geek website: http://www.wisegeek.com/what-is-a-compensation-package.htm
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