Challenges and Issues in Mergers and Acquisitions

Running head: CONTEMPORARY MANAGEMENT
CONTEMPORARY MANAGEMENT

Contemporary Management 1
Executive summary
This report follows the case study of the merger between two major firms, New York-
based BioHealth Labs and Holland-based DeWaal Pharmaceuticals and the major issues or
problems associated with mergers. Conflict management as well as resolving communication
barriers has been identified as major hurdles for the company. Additionally, the conflicting
values of both the firms as well as the organisational and cultural differences have been
highlighted in this report. Recommendations to overcome these challenges have been proposed
with respect to several relevant theories, such as Vroom’s Expectancy theory, Job
Embeddedness, Herzberg’s Two factor theory, Communication Accommodation theory,
Cognitive Dissonance theory. The overall process of integration of the merger has been
discussed along with the evaluation of the proposed theories for this purpose.

Contemporary Management 2
Table of Contents
Introduction......................................................................................................................................3
Conflicting values at stake in the case.............................................................................................3
Critical analysis of the process for integration with respect to structure and top management
staffing.............................................................................................................................................5
Recommendation on resolving the conflicting values.....................................................................7
Process to be implemented for the two senior executives and their HR for following integration
to the top structure...........................................................................................................................9
Evaluation of usefulness of the management and organisational theories and practices from the
subject............................................................................................................................................10
Summary and Conclusion..............................................................................................................11
References......................................................................................................................................13

Contemporary Management 3
Introduction
Mergers and acquisitions are key factors involved in the corporate growth strategy of
firms. It aids in the progress and development of a firm, both in financial as well as
infrastructural terms. Regardless, there may be a number of challenges following the completion
and implementation of the merger, which may come from the top management to the staff of the
company. This paper focuses on the case study of the M&A between BioHealth Labs and
DeWaal Pharmaceuticals and the associated challenges and issues following the implementation
of the M&A. There have been conflicting values identified between the Chairman and the CEO
has been evident, which causes a panic among the staff, which results in the disintegration of the
skilled employees. The integration of the suggested solutions to the problems is mentioned,
along with the application of relevant management theories for the better practices of the firm.
Conflicting values at stake in the case
The CEO Steve Lindell and the Chairman, Kaspar van de Velde has demonstrated
perfectly the ability to work and collaborate together. Regardless, the issue in the values and
opinions causes delay in the implementation of the eminent and necessary decisions. It may be
stated in this regards that there are positions or designations for 65 individuals, in both New
York and the Netherlands, with 120 people competing for the positions (Light, 2001). Both the
companies BioHealth Labs and DeWaal Pharmaceuticals have skilled and qualified individuals
fit for the positions (Light, 2001). Since, the M&A had taken place between firms from two
different countries, a major difference in the cultures has been evident, as is prominent in case of
the work cultures. Firstly, a challenge of communication is evident between the leaders of both