Business Issues: HR Functions and Strategies in a Merger Context

This report delves into the critical aspects of business mergers, focusing on the challenges and strategies involved when two firms with different products merge. It explores external factors like economic conditions and globalization that impact businesses, emphasizing the need for market research and stakeholder involvement. The report highlights the crucial role of HR functions in supporting change management, creating communication infrastructures, designing training modules, and developing policies to ensure a smooth transition and address employee concerns. It emphasizes the importance of strategic planning, resource allocation, and data utilization in developing effective strategies that consider stakeholder perspectives. Ethical issues such as partiality, value clashes, and data privacy are discussed, underscoring the need for ethical considerations in the merger process. The report concludes that effective HR management, strategic planning, and ethical considerations are vital for the success of mergers.

BUSINESS ISSUES
AND
THE CONTEXT OF HUMAN
RESOURCE

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Contents
Introduction...........................................................................................................................................1
External factors......................................................................................................................................1
HR functions support at the time of change...........................................................................................2
The way in which organisation must develop strategies........................................................................2
Ethical issues that needs to be considered.............................................................................................3
Conclusion.............................................................................................................................................3
References.............................................................................................................................................4

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Introduction
Two firms merge to become a larger firm and hence many types of changes had to be brought
in the organisation in order to ensure that the merger becomes effective for the organisation
(Maksimovic, Phillips and Prabhala, 2011). In the current business environment when many
kinds of challenges exist it is critical that firm look at various functional aspects that could
support their business at the time of change or at the time of developing strategies. This
report will be addressing the areas that need to be taken care of when two firms having
different products merge.
External factors
The external factors that are having impact on the businesses include:
 Economic: There is economic crisis going on in the world which has also shown
impact on the growth of the UK’s economy and hence people are not spending much
as expected. The decisions such as Brexit will again have impact on the growth of the
small business especially when the bigger firms are controlling the market and hence
the growth of the small firms is hampered due to resource scarcity of dealing with
bigger firms (Hair Jr, Page and Brunsveld, 2019).
 Globalisation: Globalisation along with the use of technology has empowered the
bigger firms from other parts of the world to do business effectively. It is due to
globalisation that smaller companies are unable to make their mark.
In order to find out the external factors that are impacting their business can be done with the
help of research of the market. This marketing research also needs to be done with the help of
data that firm that accumulated in so many years of business (Brinckmann, Grichnik and
Kapsa, 2010). This will show the areas in which their businesses are lagging and hence the
factors that is making the changes. It can also be found by conducting surveys in both the
firms between all the stakeholders. This will tell about the internal factors that are not letting
the company to develop.
It is apt to use this approach to deal with these external factors as joining of both the firms
will result in improving their synergy and also increase their scale of business which will give
them resources to deal with the problems that individual firms are facing especially in the

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areas like marketing and productions. This approach was also effective in the organisation as
it will reduce the challenges that are faced by the company due to lesser amount of resources
(Schmidt, 2015). They will also combine their skills which the individual firm might not have
and will also help in increasing the overall firm’s performance.
HR functions support at the time of change
HR functions have a critical role in the management of business and hence they can act as a
support mechanism at the time organisation is changing. HR functions will ensure that lesser
amount of time will be required in the whole change management. This is done by them by
setting the proper guidelines. Since it is often seen that dissatisfaction of the employees is on
the higher side at the time of merger and at the same time there is also seen that many types
of conflicts arise in the firm. For managing these problems it is critical that firm makes a
proper communicational infrastructure which is again the responsibility of the HR functions.
HR functions can also support the company at the time of change as it will create a training
module which will help in understanding each other’s value and will also help in building a
better organisational behaviour that will improve the functions of the organisation. HR
function will also design a platform where all the stakeholders related with the firm can
discuss the functionalities and hence can make strategies that will help in dealing both
internal and external factors having impact on the performance of the company. HR functions
also have a critical role in the development of the policies that could help in giving control
over the change process (Reilly, 2012). HR functions are also help in designing of the new
HRM policies i.e. from recruitment to appraisal everything and in this also there must be
incorporation of the employees so that employee’s relationship remains on the better side. HR
function will have to ensure that employees from both the firms respect each other and the
organisational culture of each other.
The way in which organisation must develop strategies
In the time when the strategies play a critical role in the development of the organisations, it
is critical for the management to develop strategies that would help in reducing the challenges
related to the business and the challenges that are created by the market. The first thing that
the organisation must consider while making the strategies is that whether it will be feasible
in terms of the amount of resources the firm has. It is also critical to evaluate the strategy on
the basis of its impact on the business operations hence the strategies that will have positive

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impact on all the stakeholders needs to be accepted. Since the challenges in the businesses are
getting complex hence it is necessary that all the stakeholders are involved in the process of
making strategies. This will give new and creative ideas to improve the strategies that are
made in the organisation and at the same time it will also improve the motivational levels of
the company which will have direct impact on the performance of the firm (Trentin, Forza
and Perin, 2012). It is also critical that at the time of development of strategies there must be
utilisation of as much data as possible. This is necessary for gaining success.
It is important to involve more numbers of players in the strategy making process as it
enables a firm to understand the challenges that every stakeholder will face due to these
challenges. On the other hand use of data is important as it provides evidence to the
organisation about what are the things that needs to be done (Casadesus-Masanell and Ricart,
2010). It is also important to develop strategies in this manner as it will help the organisation
in making strategies that are unique and analyses all the aspects of the strategy development
in an effective manner. This is the way to develop strategies that will affect the organisation
in the long term. By doing all these it becomes easier for the firms to integrate all their
organisational processes.
Ethical issues that needs to be considered
There are different ethical issues that can be faced by the organisation at the time of merger.
It needs to be dealt in a proper manner so as to ensure that company’s performance remains
on the better side. Ethical issues such as partiality with any employee from any particular
company are common. It is also seen that when two firms merges there is a change in the
HRM policies of the company which has a direct impact on the growth of the organisation
(Vaara and Monin, 2010). Ethical issues such as clash of values can also occur which has a
direct impact on the performance of the company. This is not good for the company in the
long term. The ethical issues such as privacy of data can also be one of the major things that
can bother the firm’s management.
Conclusion
From the above based report it can be concluded that with the help of surveys internal
environment of the organisation can be found out. The external environment can be found
with the help of research that is done by the organisation. HR function has different kinds of
responsibilities and these responsibilities are supporting the change management process. The

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ethical issues such as conflict are very much common in the case of mergers which need to be
managed in an appropriate manner.

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References
Brinckmann, J., Grichnik, D. and Kapsa, D., 2010. Should entrepreneurs plan or just storm
the castle? A meta-analysis on contextual factors impacting the business planning–
performance relationship in small firms. Journal of business Venturing, 25(1), pp.24-40.
Casadesus-Masanell, R. and Ricart, J.E., 2010. From strategy to business models and onto
tactics. Long range planning, 43(2-3), pp.195-215.
Hair Jr, J.F., Page, M. and Brunsveld, N., 2019. Essentials of business research methods.
Routledge.
Maksimovic, V., Phillips, G. and Prabhala, N.R., 2011. Post-merger restructuring and the
boundaries of the firm. Journal of Financial Economics, 102(2), pp.317-343.
Reilly, P., 2012. Transforming HR to support strategic change. People and Organisational
Development, a New Agenda for Organisational Effectiveness, Chartered Institute of
Personnel and Development, London, pp.125-141.
Schmidt, B., 2015. Costs and benefits of friendly boards during mergers and
acquisitions. Journal of Financial Economics, 117(2), pp.424-447.
Trentin, A., Forza, C. and Perin, E., 2012. Organisation design strategies for mass
customisation: an information-processing-view perspective. International Journal of
Production Research, 50(14), pp.3860-3877.
Vaara, E. and Monin, P., 2010. A recursive perspective on discursive legitimation and
organizational action in mergers and acquisitions. Organization Science, 21(1), pp.3-22.