Cross Culture

Cross Cultural Integration - HR Issues

During the first quarter of this year, the total value of mergers and acquisitions reached approximately $900 billion, up 44% from the same period last year. Companies have always used this strategy to grow and consolidate, and to eliminate competitors. Moreover, one of the main arguments for carrying out these deals has been that they create synergies

The first phase of Mergers and Acquisitions there are various aspects of business that is affected which needs to be streamlined. These processes have a direct relation with the success of the integration. This process such ideally called synergy but it is called integration as not all mergers and acquisitions synergies the processes of both the parties. Closer look at the different aspects that can be affected by a cross-cultural integration.

Human Resource: People issues in case of M&A are the most sensitive and critical aspect to handle. Effective communication is the key to keeping the rumors of an effective M&A. In today's world there is always a continuous struggle to get the right talent for your job. Imagine loosing your war just because your warriors have lost path to your goal.

Very little importance is given to human capital concerns at the time of M&A. Following can be the reasons:

People issues are not viewed as priority since there are other process driven challenges to be addressed

Top management views people issues too sensitive to address so try not to discuss the same

Lack of information with the top management

In case of lay-offs don't know how to deal or communicate with the employees.

The value for human capita is marginal for some managers

There are concerns of having their ground stable first then people issues would be addressed

The flow of an M&A process:

Before Integration

During Integration

Solidification and Post integration

Step 1

HR issues during integration:

Identifying a pilot who can spread the information. This person should be a very good communicator, have good analytical abilities, have the good connect with the staff and should be unbiased

Keep infusing accurate information with the help of that pilot. Constant communication to be in touch with your employees

Cultural assessment

Creating practices for learning and knowledge transfer

Step 2

HR issues during combination

During integration of the company there needs to be an extra care to be taken care of:

Deciding on who will be retained and who will be not

Communication here is the most critical. Communication should be handled in the most sensitive manner

Establishing a HR culture, policies and practices is essential

Systematic approach towards the selection of the team

Integration can be poorly implemented leading