Essays on Managing People And Organisations In Mergers And Demergers Assignment

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Managing People and Organizations In Mergers And DemergersIntroduction A lot of organizations think about mergers and demergers, so that they enjoy a strategic alliance with an equally successful company. A lot of cases show that the main reason behind a merger is that it usually ensures long-term sustained success in terms of profit for the business. As the entire business world has become highly competitive, the companies need to keep up with the fast moving diversified international market. The only alternative left for businesses today is to merger with another company, so that it can have an edge over the market A merger is the combining of two or more companies into a single corporation (Merger Definition 2010).

This can only be done if one business acquires the assets of another business. The outcome of this act is the creation of one single organizational structure. This new organizational structure maintains its old identity in the market According to Paton (2007) statistics state that every nine out of ten mergers and demergers are unsuccessful in fulfilling the expectations which are made at the beginning of the merger.

The reasons as to why such failures take place are not fulfilling the objectives, low profits, and assimilation of technology with the culture and management of the company. This paper will highlight the management as the sole reason of failure of mergers. As after the merger takes place the most important person is the manager, he controls the employees and the important processes of the comply being merged. Analysis Mergers or Acquisitions are complex challenges for the management. There are major challenges most importantly employee related issues.

Need for competent management is paramount with focus on the human resource audit as whatever, the merits of an acquisition on financial and business criteria, it is people who make it all happen. The employees need to be motivated and well informed about their future within the company Successful mergers can be differentiated from unsuccessful ones by analysis a number of dimensions. These dimensions are mostly based on pre- merger faults and post merger faults, regarding faulty integration management. Recent years the primary reason for failure has been sited at the inability of managers to mesh cultures and company strategy (Kole & Kenneth 2000).

Fundamentally this means management put a lot of time and efforts into crunching the numbers of what could be if they joined forces, but they do not spend nearly enough time hashing out how they will integrate what they are really buying, which are the people who make each organization run and make money in what is possibly two completely different organization styles. Cartright and Cooper [1995] carried out a study on forty companies.

Each and every one of these companies carried out a thorough financial and legal assessment of the company they planned to merger with, but, not even one of the above mentioned companies tried to carry out an assessment of the company's human resources and culture to evaluate the hardships they could face while integrating the company they were merging with organization they were acquiring (Warrilow 2009).

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