Contemporary Management

This article discusses the impact of merger and acquisitions in the modern business world and analyzes the challenges faced in the integration process. It provides solutions and recommendations for effective management.

Running head: CONTEMPORARY MANAGEMENT
Contemporary Management
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Author Note

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Table of Contents
Introduction:...............................................................................................................................3
Conflicting Values at Stake:.......................................................................................................3
Critique of the process of the integration:..................................................................................5
Solutions:....................................................................................................................................7
Recommendations:.....................................................................................................................8
Useful Theories:.........................................................................................................................9
Conclusion:..............................................................................................................................11
References:...............................................................................................................................12
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Introduction:
The impact of the merger and acquisitions in the modern business world is observed
to be significantly high as the mentioned strategies have the potential to improve the business
operations and the operational activities of the modern organizations. The concept of merger
is associated with considerable number of opportunities for the modern organizations as it
enables the companies to gain the chances of conducting sustainable business without the
conventional infrastructure set up or without facing the strictness of the legislation regarding
the trade licenses (Schmidt, 2015). The merger enables the companies to enjoy a strong and
established brand. The paper is focused in the elaboration of the case of the merger that
took place between two of the multinational organizations in the form of DeWaal
Pharmaceuticals and BioHealth Labs. The paper analyses the specific factors that contributed
to the formation of the merger and along with that, the paper discusses regarding the impact
of the events that occurred after the merger. Apart from this, the paper summarizes the
conflicting values that are at stake in the case and the analyses them with the application of
the relevant theories. In addition to this, the paper critiques the process of the integration with
a precise focus on the structure and the staff management procedures applied in the merged
organization. Considering the findings of the analysis, the paper provides some of the crucial
recommendations for the improved solving of the conflicting values and along with that, the
paper also recommends regarding the better management of the better management of the
details of the integration with a precise consideration of the top level management structure
of the merged organization.
Conflicting Values at Stake:
The idea of the merger between the above mentioned two companies and the
implementation of the idea was observed to be subjected to significant number of conflicting
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values primarily in the aspect of the people of the employee management. From the
comments of Alison Whitney, it is pretty evident the entire workforce at BioHealth is
significantly panic-stricken.
Considering the Anxiety theory, it is understandable that the impact of the merger and
the uncertainty associated with it, has produced considerable amount of detrimental impact
on the sense of job security amongst the employees of the merged organization (Veen, 2013).
Many of the efficient employees of the organization are considering other job opportunities
for them which had the potential to restrict the success of the merged company. On the other
hand, one of the crucial reason responsible for the existing chaos inside the organization is
the incapability of the senior management of the organization in effective decision making.
Both the leaders, the CEO of the merged organization, Steve Lindell and the chairman,
Kaspar van de Velde were observed to apply he contingency form of leadership nad that was
pretty evident with their style of leading. Steve was more concerned regarding the formation
of the structure and wanted to haphazardly create the structure of the senior management of
the organization and was even read to revise his decision later if they fail. On the other hand,
Kaspar was more of a leader who never acknowledged the urgency of the formation of the
structure for the merged organization. Hence this created considerable amount of problems
inside the organization in the effective formation of the roles and responsibilities of the
employees and senior executives of the merged organization. This too some extent created
considerable amount of role conflict inside the organization (Rossi, Yedidia Tarba & Raviv,
2013).
As Steve was more focused in the formation of the structure inside the organization
with higher level of urgency, the steady approach of Christian Meyer which includes the
testing of the emotional intelligence and focuses on the establishment of the fairness in the
process was avoided by Steve. This had the potential of placing the organization in such
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position where there was high possibility that the company selects inappropriate candidates
for their positions. On the other hand, the company was seen to be affected with considerable
amount of cultural differences and that is pretty obvious with the comments and the actions
of both the senior leaders of the origination. Both Steve and Kaspar desperately wanted their
men in the top most positions of the organization and that is visible with their conversation
regarding the continuation and the closure of the operations in Bombay, Indonesia, Shanghai
and Bangalore. The problem with the selection of the management team of the organization is
pretty evident as both of their leaders were observed to put on their cultural glasses during the
time of the selection of the candidates for the managerial positions in the merged
organization. Hence the reflection of the cultural differences from the top leaders to the
employees of both the companies is pretty prominent (Bauer, Matzler & Wolf, 2016).
Critique of the process of the integration:
The process of the merger included considerable amount of issues in the effective
management of the employees, the formation of the roles and responsibilities of the
employees for the merged organization, the effective alignment amongst the members of the
both the organizations. The main reason responsible for the creation of this sort of scenario
was the point of ineffective leadership from the part of the senior managers of the
organization. The process undertaken by the Steve and Kaspar was significantly opposite.
First of all, Steve was observed to achieve the much required sense of urgency for stabilizing
the organization after the merger and was seen to put strong emphasis in the formation
management team urgently (Burke, 2017).
However, his style of selecting the individuals for the management team were
haphazard in nature. Hence this had the potential of creating a team that is inappropriate for
leading the organization during the change. Apart from this, Steve’s idea behind the urgent
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formation of the management team was that he will be fine to conduct the odd changes,
however with the current situation, he wants to make sure that he select the management team
and proceed with it. In the modern business world, it was significantly premature however,
the sense of urgency felt by him was pretty effective for the organization in the effective
management of the changes. On the other hand, the reflection of the contingency style of
leadership from the part of Kaspar was highly ineffective for the management of an
organization that is undergoing a significant change (McCleskey, 2014). Kaspar was less
bothered about the urgent formation of the structure of the merged organization. Though the
sense of urgency was necessary to be incorporated, however ignoring the stable approach of
Christian Meyer in terms of selecting the individuals for the managerial positions of the
organization had the potential of making sure that the organization appoints the suitable
candidates (Pollack & Pollack, 2015). However, the lengthy procedure of testing the
emotional intelligence was contradictory to the urgency of implementing the change.
Apart from this, the reflection of the style of leading and the urge of them in selecting
their men for the managerial positions portrayed considerable amount of cultural differences
amongst the employees and the leaders of the organizations. A common trend in the
operations of both Steve and Kaspar was prominent as both the leaders were trying to place
their preferred candidates at the higher ranks of the organization. This was significantly
promoting the cultural differences inside the organization and was responsible for a declining
corporate culture inside the merged organization. One of the major drawback of the
leadership of both the leaders was their incapability in the establishment of the much required
transparency in the business operations and the selection of the individuals for the managerial
positions. Christian Meyer was observed to be pretty vocal about this and that was evident
with Meyer’s recommendations for the establishment of the transparency in the process of the
appraisal in the merged organization. However, the prescribed process of Meyer which
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includes the scope of investigating the emotional intelligence of the employees for placing
them in the senior management positions, was partially appropriate for the selected as the
process was more of a combination of the latest human resources trends rather than a method
that is well developed in terms of meeting the business needs that the merged organization is
facing.
Solutions:
Considering the declining corporate culture inside the organization, the major reason
responsible for such condition was the organizational and power conflict. In addition to this,
the merged organization was observed to be affected with the increasing the cultural
differences and the increasing urge of the leaders of the organization in favouring their own
men. The absence of the transparency in the appraisal and in method of selecting the
individuals for the managerial positions was an influential factor for the declining condition
of the selected organization (Klimkiewicz & Beck-Krala, 2015). Considering the Kotter’s
model of change, it is pretty visible that the achievement of the sense of urgency is much
required in the establishment of the organizational changes and the evaluation of the
condition of the merged organization is pretty significant in stating the need of incorporating
the sense of urgency across the various stakeholders of the organization (Parker et al., 2013).
As Kaspar had shown no sense of urgency, it is important for the senior management
including the CEO of the organization to convince him regarding the need of increased
consideration on point of structuring the organization from his part. On the other hand, both
the managers need to get out of their comfort zone and start utilising the efficient individuals
for the effective management of the change without any sort of consideration towards their
origin.
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This will be crucial in not only improving the stability of the organization, but also in
motivating the employees towards the achievement of the improved skills and competencies.
Considering the lack of transparency in the process of promoting the employees of both the
organizations to the managerial positions of the merged organization, it is important to make
sure that both Steve and Kaspar acknowledges the importance of the comments of Meyer and
establishes an unbiased performance evaluation system in the form of the external
consultants. This will be of great significance for the selected organization in making sure
that the selection of the employees of the organization are conducted on the basis of the
outcome of the in-depth structured interviews in addition to the results of the 360 degree
assessment. This will be crucial for the higher authority of the organization in the
achievement of the assessment of the employees that is not affected by any sort of internal
politics, loyalties or by the impact of any sort of cultural differences or the power clashes
(Parker et al., 2013). The perfect and transparent evaluation of the employees will be crucial
for the organization in selecting the best suited candidates for the important positions in the
merged organization.
Recommendations:
The main issue in the organization is the selection of the top management structure of
the merged organization. As mentioned earlier that the organization is suffering from the lack
of transparency or the much required fairness in the process of selection of the employees, the
HR team or the two senior executives of the merged organization is in need to make sure that
they introduce an appraisal process that has the provision for the external evaluation. As the
selection of the employees in the merged organization is required to be conducted on the
same basis, it is recommended that the senior executives of the organization come up with a
proper description of the required competencies or the skills that they are searching in their
employees for placing them in the managerial positions of the organization.
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One of the major issue in the evaluation of the performances or the level of
competency in the employees is the biasness of the raters and from the selected case, it is
pretty evident that the senior management of the organization is significantly affected with
the own culture and is seen to favour their own men for the higher rank positions. With the
introduction of the external consultant for the assessment of the performances or the
suitability of the employees for the managerial positions, the company has the chance to
completely eradicate the biasness of the senior executives from the process of the selection of
the employees. One of the major issue in the organization was the role conflict or the power
clash between the two senior executives and that is pretty evident with the sense of insecurity
of Steve from the dynamic media management of Kaspar. This increased the level of
intensity of the senior managers in placing their preferred candidates in various positions of
the merged organization.
However, considering the volatility and uncertainty associated with the selection of
best suited candidates, the application of the external assessment will be crucial for the
selected organization in making sure that they source the best quality individuals for the
effective and efficient management of the change inside the organization. From the analysis
of the above mentioned case, it is pretty visible that the level of complexity associated with
the process of selection that Steve and Kaspar are introducing will be ineffective for the
sustainability of the organization, hence the proper specification regarding the required
competency and skills for the employees to be appraised and to be promoted to the high rank
positions of the merged organization will be crucial for the organization in making sure that
they provide the much required benchmarking for the employees to follow. The
benchmarking of the employees will be crucial for the organization in not only selecting the
most suitable individuals but also in letting others know about the level of competency that
they are required to achieve for getting the appraisal in the merged organization.
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Useful Theories:
Some of the crucial theories that are significantly helpful for the effective
understanding of the case and the condition of the merger are the power conflict theory,
organizational culture, the appropriate performance measurement theory, cultural differences
and the Herzberg two factor theory (Alshmemri, Shahwan-Akl & Maude, 2017). The power
conflict theory is significantly helpful in educating the impact of the power clash inside the
organization between two senior executives of the organization, Kaspar and Steve (Van
Evera, 2013). The theory helps in the identification of the factors that influences the
organizational conflict inside the merged company and the reason behind the declining
organizational culture in the company. On the other hand, the concept of cultural differences
is crucial in understanding the reason of apathy of the senior executives in positioning the
employees of other organizations at the high rank positions (Moran, Abramson & Moran,
2014).
The theory is significantly helpful in understanding the reason of such an
organizational environment where both the workforces were seen to have an attitude such as
“they are not like us so they are no good” (Moran, Abramson & Moran, 2014). This was an
important factor in understanding the possible reasons of the declining organizational culture
in the merged company and along with that, the theory plays a crucial role in the
identification of the possible triggers that led to such immense organizational conflict that the
managers were unable to find out the appropriate organizational structure for them. The
appropriate performance measurement theory is significantly crucial in understanding of the
need of incorporating the much required transparency in the process of selection of the
employees for the managerial positions in the organization and it also has a major role to play
in identifying and understanding the need of the external consultant for the evaluation of the
performances of the employees inside the organization with a precise focus on the capability
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of it in the effective management of the detrimental impact of the internal politics. Apart from
this, the Herzberg two factor theory portrays the need of the benchmarking for the employees
to motivate them towards the achievement of the skills and the competencies required for the
promotions inside the organization (Yusoff, Kian & Idris, 2013).
Conclusion:
On a concluding note, it is pretty evident that the merger and acquisitions have greater
significance for the modern organizations owing to the benefits that it provide to the
organization taking part in it. However, the success of the merger depend on the effective
management of the change inside the organization and the organizations with the appropriate
organizational culture and spirit has the possibility of achieving their objectives with the
implementation of the mergers. The presented case provides significant evidence of the
impact of the inappropriate organizational culture and at the same time, portrays the method
in which the power conflict is affecting the merged organization. The company is in need to
establish the much required transparency in their process of appraisal as that have the
potential to provide the benchmark for the employees inside the organization and will be a
key step for the management of the organization in improving the organizational culture.
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leadership development. Journal of Business Studies Quarterly, 5(4), 117.
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Rossi, M., Yedidia Tarba, S., & Raviv, A. (2013). Mergers and acquisitions in the hightech
industry: a literature review. International Journal of Organizational Analysis, 21(1),
66-82.
Schmidt, B. (2015). Costs and benefits of friendly boards during mergers and acquisitions.
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Van Evera, S. (2013). Causes of war: Power and the roots of conflict. Cornell University
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thesis, University of Twente).
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