Conflicting Values in Mergers: A Critique and Recommendation

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Mergers
Essay
Date
Student’s Name
University

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Introduction
The news about merging of an American pharmaceutical BioHealth and a Dutch-based
pharmaceutical De Waal was at the top of the story showing Kaspar the chairman of the Dutch-
based firm and Steve Lindell smiling at each other. De Waal had established itself in the
European market as a reputable pharmaceutical while BioHealth was making significant strides
in the American market. Both pharmaceuticals were involved in selling the drugs ranging from
painkillers to HIV/AIDS medications over the counter. The merging of the two firms was
strategic as they would see be enjoying large economies of scale due to their large size regarding
resources and capabilities and this will ensure that their products get pushed through the
appropriate distribution channels.
Alison one of the directors in charge of sales and marketing had risen to this position
after working hard for so many years. However, Alison is worried and unhappy due to lack of
proper communication on where their company was heading1. She laments how some employees
considered as assets were weighing options after being given offers by other competitors due to
the looming uncertainty engulfing the merged firms. According to her, she believes Kaspar is the
man responsible for causing problems for their employees. She is concerned after seeing five of
Bio Health’s employees exit the company and others were still considering to leave the
company.
Conflicting values at stake
Based on past research conducted on the topic of merging, communication was
considered one of the elements responsible for the failure of most mergers. Steve, on the one
1 K. Srdan, M. Abdullah and M. Dev,"Business cycle and aggregate industry
mergers." Journal of Economics and Finance vol. 35, no. 2, 2011 pp. 239-259.

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hand, fails to have a communication plan that would be vital in informing employees of their
fate. Some very talented people who have exceptional talents are considering leaving the
company due to lack of proper communication by their leaders.
The perception that Steve and Kaspar have regarding selecting employees considered as
assets to the company and the methodology employed may be best termed as a fallacy, and thus
they seem to have lost their way based on three justifications. It is no secret that Kaspar and
Steve have opposing views when it comes to urgency needed in recruiting key executives for
management purposes. Kaspar seems unconcerned about the slow pace in hiring key
management team while Steve, on the other hand, shows concern for the matter as he
understands the importance of having a management team in place.
However, it is wrong for Steve to think that he can solve issues in the short term and fix
such problems in the long-run when they fall out of place. The selection of the senior executive
team will determine the success or failure of the new firm. It is poor decision making that is
considered to have a long-term negative impact.
It is irresponsible for Steve and Kaspar to fail using data and well-archived resources in
helping them crucial decisions and may negatively affect the operations of the company. It looks
unwise for both Steve and Kaspar to draft a plant proposal over the meeting at lunchtime when
such a plan requires conducting research and detailed analysis to capture components such as
cost analysis, quality issues, and services provided when making such decisions. It would sound
viable if data were used in informing decision-making process and giving assurance to
employees that essential choices involving them are not being made randomly.
Recommendation of the process to be employed by the HR and the executives

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The entire selection process should be explicit, and both Steve and Kaspar have to make
business objectives and goals as clear as possible. It is imperative to set parameters that
recommend whether the pool of candidates to be interviewed for key positions are to be assessed
by performance or other issues. A clear framework should also be provided to guide on what
factors are to be considered in choosing company executives based on geographical or functional
abilities. Having a balanced senior executive team based on a 50-50 share of slots is crucial
regarding this particular context. The possibility of having candidates who have the same values
requires establishing a tiebreaking framework to help and guide in such matters.
It is always imperative to have the process of selecting employees particular those
regarded as assets to the company in stages. In the first stage, it should help in developing the
second stage2. Though, the entire process should be wanting but not boring. The company is
anticipated to conduct interviews entailing many candidates considered to have potential where
each candidate portrays uniqueness. It is also in this context that reviews get evaluated regarding
the past performance of such potential candidates. Time and again, soliciting evaluations from
external independent consultants, for instance, outsourcing services of human resource to
provide objective feedback and assessments of the pool of candidates. It is essential to give
reservations for those talented employees who will not be selected to fill all immediate slots in
the company. However, it is how the human resource departments sustain such candidates in a
formal way that is crucial.
Giving assurances to employees that are deemed assets for each side of the company that
they will be considered in the future in lucrative positions should be done. However, such
2 N. Steigenberger,"The Challenge of Integration: A Review of the M&A Integration Literature."
International Journal of Management Reviews, vol. 19, no.4, 2016, pp. 5.