Analysis of Case: Who goes, Who stays?

Running head: CONTEMPORARY MANAGEMENT
Contemporary Management

2CONTEMPORARY MANAGEMENT
Executive Summary
In this report analysis of case titled–“Who goes, Who stays?”, has been presents. The
analysis of the case offered valuable insights and understanding about the issues that are
faced by companies during cross-border M&As. Combining DeWaal Pharmaceuticals and
BioHealth Labs is more likely to result several conflicting values such as leadership,
teamwork and accountability which are more likely to negatively influence during the
integration process of merger between the two companies which has been further elaborated
using social identity theory and acculturation. At the same time, the reports depicts that the
process that has been applied by the two leaders t work out integration has several drawbacks
such as it fails to recognise the cultural differences aspect of the two companies. Nonetheless,
it this reports, it is recommended to both leaders of the two companies to engage in open
communication and negotiate carefully to resolve the conflicting values and to ensure
successful merger between the two companies. In addition, it has also been suggested to
follow due diligence approach to deal with the issues relates to structure and top management
staffing. Moreover, all theories that have been applied including social identity theory anxiety
theory and acculturation theory along with the due diligence practices are analysed to be
critical for the successful cross-border merger of the two companies.

3CONTEMPORARY MANAGEMENT
Introduction
This report presents the analysis of case–“Who goes, Who stays?”, with particular
focus on people and culture. At the onset, the report presents the evaluation of conflicting
values with reference to the given case using appropriate theories. Next, the report presents
critical analysis of the process implemented to work out the details of the merger between the
two companies. Thereafter, this report provides resolving conflicting values as well as to
work out the details of the merger with regard to the organisation structure and managerial
staffing. Finally, this report presents the evaluation the suitability of the management and
organisational models as well as practices applied in the analysis of the case along with the
conclusion.
Evaluating Conflicting Values at Stake Using Relevant Theories
Based on the careful analysis of the case, it has been observed that there are numbers
of core values which are at stake that can have long lasting impact on the new megacompany,
DeWaal BioHealth, which is likely to be formed after combining DeWaal Pharmaceuticals
and BioHealth Labs. In this regard, leadership, teamwork, accountability, passion and quality
are identified as some of the main conflicting values at stake. In order to explain these
conflicting values, it would be vital to reflect on some important theories that have been often
applied to discuss the integration challenges of merger and acquisition. Accordingly, social
identity theory and acculturation theory are identified to be relevant to discuss and analyse
the conflicting values with respect DeWaal Pharmaceuticals and BioHealth Labs merger (Seo
and Hill, 2005).
Social identity theory relates with element of individuals’ identity, which is obtained
from membership organisation (Ashforth and Mael, 1989; Hogg and Terry, 2000). Notably,
combining DeWaal Pharmaceuticals and BioHealth Labs, creates requirement for the two
organizations to abandon exiting identity and embracing to a new identity. As per this theory
during M&A process employees are more likely to attain top position in the new
organisations which is apparent in the given case where CEO Steve Lindell and
chairman Kaspar van de Velde both are seen to be willing to take the

4CONTEMPORARY MANAGEMENT
leadership role in the new megacompany, DeWaal BioHealth (Haunschild, Moreland,
& Murrell, 1994). However, such situation can have severe impact leading to
ingroup/outgroup biases, which in turn have the tendency to serious inter-organizational
conflicts and put core values such as leadership, team work, accountability and quality at
stake (Marks & Mirvis, 1985).
In the similar context, acculturation theory states that changes occur due to the contact
between the groups from different culture. The given case provides a suitable example of
acculturation, wherein two companies DeWaal Pharmaceuticals (Dutch) and BioHealth Labs
(American) are identified to have agreed to merge to form new company DeWaal BioHealth.
As per this theory, it is stated that integration of two organisations from different culture
often results in integration problem as in the case of companies DeWaal Pharmaceuticals and
BioHealth Labs. Moreover, failure to agree on the integration mode by the members of two
organisations often create, acculturative stress among the organizational members, which can
be a source of inter-organizational conflict. Such conflict is further ascertained to have severe
impact on the corporate values (leadership, teamwork, passion, and quality), organization
structure and decision making processes (Seo and Hill, 2005).
Critical analysis of the approaches Applied to Work out the Details of the Merger
In the given case, the two leaders have agreed for appraisal process in which
the performance of all the top level managers of the two companies well
be evaluated in the formal manner. The formal appraisal process involved
measuring the performance of the all the top executives of the two
companies based on criteria such as executive competencies, objectivity
and fairness and benchmarking. Moreover, in order evaluate the
performance top level managers for the integration purpose, it was
decided to take help from external consultants.
Accordingly, this approach implemented to resolve the outstanding issue related to the
integration with respect to top managerial staffing and organisational structure can be
criticised using different theories. In this regard, it would be ideal to reflect upon anxiety
theory. According to this theory, M&A process usually is characterised by large scale change
in the organisations and hence it can be an important source of anxiety. In general, during the