Organizational Development in Corporate Mergers and Acquisitions

Introduction to Organizational Development Goals

Organizational development serves as a means of virtually overhauling how a company operates, with the aim of improving effectiveness across all facets of business operations and at every level of the organization. The first step, keeping organizational development principles in mind, is setting goals. Common goals for organizational development include increased performance and productivity, enhanced employee morale, and improved profitability.

One of the first steps in producing a goal that could promote synergy is assessing Company A's paid three-month sick leave policy. This kind of benefit will not align well with Company B, especially since Company B will own roughly 85% of Company A following the acquisition. The aim, therefore, becomes to reduce the amount of paid sick leave offered to 1.5 months, or six weeks.

Leave Banks and Sick Leave Policy Alignment

While this reduction may upset some employees in Company A, it will fall in line with the attitudes and work ethic at Company B. Company B values efficiency and has achieved a cash-rich status because of its work policies. One way to manage resistance to such changes in Company A is to institute leave banks. Leave banks have "replaced the traditional separate programs for vacation, sick leave, and holidays. Commonly these forms of paid absence from work have been combined into a maximum number of days per year for the employee in his/her bank" (Folsom & Boulware, 2014, p. 156). Employees can donate their paid sick days and receive additional paid sick days depending on their individual circumstances. Since Company A has family members within its employee population, this approach could provide some valuable additional options for affected workers.

Leave banks are just one way to bring Company A more in line with the expectations and mindset of Company B. The next step, beyond goal setting, is employee development.

Employee and Executive Development

Development plans operate at both the employee and executive levels. In terms of executive development, goals may include improvement in decision-making, communication, and change management. Goals for employee development may cover a wide range of activities. Since both companies are sales- and service-driven, key areas for improvement would include communication skills, technical proficiency, creativity, and problem solving.

Company A's employees can receive training from Company B to improve productivity, communication, and other key performance markers. Research suggests that when companies invest in their employees and make them part of development changes, employees feel a greater sense of connection — something Company A already fosters through its family-oriented structure. As Hughes (2016) notes, "the employee also feels greater connection and commitment to the organization which has invested in their development and made clear how this development assists in the attainment and maintenance of competitive advantage within the wider marketplace" (p. 93).

Company A sought to advance to the next level, which is central to its decision to allow Company B to acquire it. If Company B shares the strategies behind its success and provides training opportunities for Company A employees, this may help bridge the gap in standards while also creating a sense of connection. This approach can be effective at both the executive and employee levels.

References

Folsom, W., & Boulware, R. (2014). Encyclopedia of American business (7th ed.). Infobase Publishing.

Godbole, P. (2013). Mergers, acquisitions, and corporate restructurings (2nd ed.). Vikas Publishing House.

Hughes, C. (2016). Bridging the scholar-practitioner gap in human resources development. IGI Global.