NHRD Journal - National HRD Network

can be done, to manage these, so as to effect a
smooth transition and deliver value in line with
the strategic objectives for the merger. The
success, which is meeting the strategic and
financial objectives set forth, depends upon the
ability of management to identify and foresee
key issues and problems that come up and
evolve a plan, driven by the objectives and
factoring in the context, realities and issues
with respect to both, organization and people.
This paper attempts to understand the process
by which the People and Organizational issues
can be managed in the context of Merger. This
is done through:
• Understanding the Variables which will
Determine the Integration Plan.
• Studying the different Approaches of the
Integration Plan.
• Key Actions in the Integration Plan.
Understanding the Variables Which Will
Determine the Integration Plan:
The management mantra for mergers and
acquisitions, more often than not, has been
'make them like us', depending on the power
equations based on the nature of deal. Research
and practice, have indicated that this is
perhaps not the best approach to management
of a merger and point to the consideration of
additional criteria for deciding on the extent of
change required, depending on the mode of
value accrual. The value accrual in the context
of merger would be through either Resource
Sharing, Skill Transfer and Combination
Benefits, or a combination of these. Given that
fact, in a pioneering research, Haspeslagh and
Jemison (Haspeslagh and Jemison, 1991) have
stated that the integration plan to be adopted
should be based on two additional criteria:
• Need for Strategic Interdependence - This
relates to the degree of strategic
interdependence that needs to be
established between the two companies.
This is drawn from the strategic objective of
the merger, which spells out the mode of
value accrual. For example, for value
creation through Resource sharing and
skills transfer, a high-to- moderate strategic
interdependence may be required, while for
value creation through combination
benefits, the strategic interdependence
required may be low.
• Need for Organizational Autonomy - This
relates to the extent to which it is necessary
to maintain the autonomy of the company
in order to preserve its distinctive skills. The
extent of Organizational Autonomy would
relate to both, the need from a business
strategy and need from an organizational
point.
Studying the Different Approaches of the
Integration Plan
The consideration of these characteristics will
enable the choice of an appropriate Integration
Plan. The integration plan, will determine the
extent of changes in either one or both the
organizations, which in turn, will need to be
factored in, the roll out of Key actions. Even
though both these variables exist on a
continuum and plotting them would require
data collection and analysis, for the purpose
of having a better understanding of the
process, both these variables have been shown
as 'high' and 'low'. Figure 1 illustrates the
context, taking into account the two variables
and suggests an approach in each context
(Haspeslagh and Jemison, 1991).
Need for
Organizational
Autonomy
Low
Holding
Low
Acquisition Integration Approaches
(Haspeslagh and Jemison, 1991)
Absorption
High
Need for Strategic
Interdependence
• Symbiosis: A scenario, where the strategic
interdependence required for value creation
88
November 2007 NHRD Journal