Change Process and Organization Development Research Paper

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Organization Development and Change Process

Merger and acquisitions refer to the combinations of two or more companies forming a new company. In other words, mergers and acquisitions (M&A) are the strategic move of corporate organizations dealing with an aspect of dividing, buying and selling of different companies of similar entities to assist the enterprises to grow. One of the examples of the major merger was the merging of Uniphase Corp. And JDS Fitel Inc. In 1999 where the two companies formed JDS Uniphase. A major example of acquisition is an acquisition of John Hancock Financial Services Inc. By Manulife Financial Corporation's in 2004. Typically, merger and acquisitions make a big news in the business world because millions or billions of dollars are generally involved. In the United States, Wall Street bankers and analysts arrange M&A transactions daily bringing separate companies forming single larger companies. Major goals of embarking in M&A is to create shareholders' values, enhance more competitive market advantages and form cost efficient company. Some companies implements the M & A initiatives with the goals of gaining greater market shares. Despite the benefits to be derived from merger and acquisition business scenario, M&A is a very risky investment, some companies have lost millions or billions of dollars from the investment.

Since 1980s, the United States has witnessed a wave of corporate M & A (merger and acquisitions) driven by the dramatic changes in the global business environment, and the goal of M&A is to achieve competitive market advantages. Although, M&A are undertaking for good reasons, however, almost two-third of the M&A operations do not work. Love (2000) points out 30% of the M&A are sold off within 5 years, and 90 of these 30% never live up to their expectations. Many M&A fail because the management do not integrate effective and efficient HR (human resources) roles in the M&A process. In the contemporary business environment, human resources plays critical roles in the successful outcomes of M&A in the United States and other part of the business world.

Objective of this paper is to evaluate the role of HR in the successful implementation of M&A in the business world.

Identification of Major Mergers within the past 20 Years

This section identifies different mergers that have taken place within the past 20 years while some of the mergers are successful, some mergers end up in failure. Their failures show that merger is inherently risky and need a proper strategic planning.

The lists below are the major mergers that have been carried out in the last 20 years:

1.Tokyo Electron (TOELY) and Applied Materials (AMAT)

Transaction Value: $10 billion

2. Spectra Energy Partners (SEP) and Spectra Energy Corp.'s (SE)

Transaction Value: $9.8 billion

3. American Airlines (AAMRQ) and U.S. Airways (LCC)

Transaction Value: $11 billion

4. Thermo Fisher Scientific (TMO) and Life Technologies (LIFE)

Transaction Value: $13 billion

5.Liberty Global (LBTYA) and Virgin Media

Transaction Value: $16 billion

6.Publicis Groupe (PUBGY) and Omnicom Group (OMC)

Transaction Value: $17 billion

7.Comcast (CMCSA) and NBCUniversal Media

Transaction Value: $17 billion

8.Michael Dell and Dell

Transaction Value: $25 billion

9.3G Partners and Berkshire Hathaway (BRK.B) and H.J. Heinz

Transaction Value: $23 billion

10.Verizon (VZ) and Vodafone (VOD)

Transaction Value: $130 billion

11.Exxon and Mobil

Transaction value: $81 Billion

12.Disney and Pixar

Transaction value: $7.6

13. Sirius and XM radio

Transaction value: $1.6 Billion

14.Mattel and The Learning Company

Transaction Value: $3.5 Billion

15.Sprint and Nextel

Transaction Value: $35 Billion

16.Boston Scientific Corp and Guidant

Transaction Value: $27 billion

17.AOL and Time Warner

Transaction Value: $111 Billion

18.Quaker and Snapple

Transaction Value: $1.7 Billion

19. Vodafone and Hutch

Transaction Value: $13.3Billion

Identification of Successful Merger and the Role Played HR

Organizations involving in merger and acquisition often pay a great attention on operational element of M&A that include legal and financial aspects. However, executives are to realize that successful merger require managing the human side to maximize the real value of the transactions. (Armour, 2000).

The merger between Vodafone and Hutch is one of the most successful mergers in the business world with the value of the transaction of $13.3 Billion. At the pre-merger stage, both parties agree they need to change their corporate cultures and integrate their culture forming a new culture. At this phase, HR played important role in the integration process. At pre-merger stage, the role of HR was to align the organizational intangible assets that comprised HR culture and issue. Thus, the organization formed an informal task force comprising of the HR leaders and business leaders.

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The task force composed of 40 members that consisted of senior members of both parties. At this stage, due diligent was carried out to achieve the talent profiling to understand the available skill set.

At the post-merger phase, the organizational changes were met with feeling of doubt and anxiety, and the feeling was positive when the organization implemented a layoff and redundancy of employees. At this stage, HR took care of employee feeling through series of stress workshops. The company also used the online communication to facilitate communication and diffuse visual and audio information. HR also communicates with employee through the internet. Face-to-face communication was also carried out to employees aware about the company activities. HR also performed the functional expertise role to assist in talent acquisition, and talent retention.

The HR also performed the role of human capital development using the technical training, softskills training, orientation programme, team intervention and career pathway. Typically, orientation programme was used to enhance knowledge of employees about new changes that had taken place within the organization since

Vodafone had developed a new organization culture and values that occurred through cultural integration, and human resources carried out the role of career management for the employees' promotion. The outcome of the merger makes Vodafone to be one of the leading operators of Indian mobile market making the company becoming a leading operator in telecommunication sector .

The merger between Exxon and Mobil is one of the most successful merger that has ever occurred in the business world with the value of the transaction is $81 Billion. Typically, the transaction makes Exxon Mobil to acquire the status of becoming the largest company in the world. The merger was so big, and forced the FTC (Federal Trade Commission) to restructure some of the gas stations of the Exxon & Mobil's to prevent monopolization despite that FCT 40 approved the merger. The outcome of the merger makes ExxonMobil to become one of the largest oil company in the world with a hold in the international market, which makes the company to enjoy dramatic earnings. In essence, ExxonMobil remains largest publicly traded company in the world.

Other successful mergers are:

Merger of Citicorp and Travellert forming Citigroup.

J.P. Morgan and Chase forming JPMorganChase.

Disney and Pixar merger was also other successful merger and deal was $7.6 Billion. The merger allows the company to exploit both organizational and financial synergies. Typically, the merger has made the company to increase their stock prices, which assists the company to achieve growth rate.

The merger between Sirius and XM radio merger is another successful merger with the value of the merger worth $1.6 Billion. The merger between the two companies assists them to deliver broader offering to customers. Moreover, retailers such as Circuit City, Best Buy, RadioShack, Wal-Mart and other retailers are able to benefit from the product offered by the company. The merger has also made the companies to achieve financial performances and assist them to manage the costs of operations effectively. The merger has also assisted the companies to achieve competitive market advantages in the audio entertainment.

Love, (2000) argues that human resources play a diligent role in the successful merger outcome. Typically, the ExxonMobil has been able to derive success from the merger because of the diligent strategy that the organization employs to manage its HR process at both pre and post -- merger stages. Typically, ExxonMobil uses a seven-step model developed by the McCann & Gilkey (1988) to define the role of HR in the merger process. McCann & Gilkey (1988) developed a useful framework that assists the ExxonMobil to manage the human resources through the M&A process.

Typically, the human resources played a critical role at the pre-merger process because the ExxonMobil involved employees who were knowledgeable in the negotiation process in the pre-merger process. Moreover, the companies created an effective team to manage the M&A process. It is essential to realize that some mergers fail because corporate executives do not integrate human resources who are familiar with change process. (Marks and Cutcliffe, 1988).To avoid the pitfall associated with the merger, the ExxonMobil used a group of personnel who were highly skilled in the change management to implement the pre-merger process.

Bramson, (2000) discusses the key role of human resources in the merger between Shaw supermarket and Star supermarket, and the transaction value worth $500 Billion. In the merger and acquisition process, human resources of both companies play critical roles in the integration.....

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