Improving Co B's Diversity Management & Leadership
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This assignment focuses on improving the management practices at Company B (Co B) after a merger with Company A. Key areas for improvement include managing diversity, changing leadership styles from autocratic to contemporary, providing training instead of redundancies, taking time for strategic changes, and appropriately managing resources.
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Leading and Managing Organisational Resources
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Table of Contents EXECUTIVE SUMMARY.............................................................................................................1 INTRODUCTION...........................................................................................................................1 ANALYSIS......................................................................................................................................3 Models and approaches for manage acquisition.....................................................................3 CONCLUSION................................................................................................................................7 RECOMMENDATIONS.................................................................................................................8 REFERENCES..............................................................................................................................10
EXECUTIVE SUMMARY Acquisition is the process where one organisation purchase some or all of the ownership stakes of the other organisation. The business report demonstrates the acquisition of Co A which was acquired by Co B in September 2017. After post acquisition, the affect of the same can be clearly seen on leadership style which completely changed after acquisition. The post-acquisition leadership style implemented by Co B is autocratic leadership. In contrary to this, prior to acquisition,CoAwasfollowingtransactionalandtransformationalleadership.Thus, contemporaryapproachestoleadershipcanbedescribedasautocratic,transactionaland transformational leadership. The organisation culture of Co A has been completely changed after acquisition. The company was performing good in the past several years. The employees were providing higher productivity and company was attaining desired revenue. But after acquisition by Co B, the scenario completely changed in the manner which deteriorated performance of the company. According to the given scenario after acquisition company, B should lay emphasis on managing change within the firm. For this purpose, it can adopt Kaleidoscope model which aid inmanagingthechangewiththeorganisation.Thismodelisusedtosupportstrategic development and changes along with this other topic like organisational change. It contains eight components which help in measuring the positive, neutral and negative in the context of changes. From the analysis of the case, it was identified that due to financial issues and problems, Co A has been acquired by Company B. The corporate culture of Co A was efficient where management listen to the employees and they were allowed to participate in the decision making process of the company. The power is distributed among managers and leaders where they can take decisions which gives benefits to the organisation. INTRODUCTION An acquisition is known as corporate action in which a company control other company fully or partially. An acquisition take place at the time when a buying company obtains more than 50% of ownership in a target company (Mergers and Acquisitions.2015). The present report is based on given case study of company A and B.Company A is an old company which was established around 200 years ago. It carried out its business activities in different parts of the countries such as USA, UK China etc. Along with this company A also focused on its staff development and implement more innovative products and services. Further, organisation has changes its leadership style due to which its performance of the company gets down. Another 1
large company named B has acquired with the company A with the motive focus of finance. After acquire company B has adopted autocratic leadership style which lead to staff redundant and all its talent employee started leaving the firm.However company A has adopted 360 congruence model whichmeasure it all the leadership, culture, people and process systems. Due to inappropriate leadership and management style company suffer from lots issues and its skilled employees started leaving the firm. In the present study the analysis of the business organisation after acquisition has been made. Co B acquired Co A in September 2017 as the management was facing financial issues. In order understand the organisation culture, the cultural web model has been used in the report. The organisation culture of Co A has been completely changed after acquisition. The company was performing good in the past several years. The employees were providing higher productivity and company was attaining desired revenue. But after acquisition by Co B, the scenario completely changed in the manner which deteriorated performance of the company. After acquisition, transformational leadership was discontinued and replaced by autocratic leadership. This has led to significance difference in the organisation culture as employeeswereleavingcontinuously. Furthermore,to assesstheleadershipstyleof the organisation contemporary leadership styles has been studied. Leadership is required so that company may be able to perform well with adequate monitoring in all aspects and as such, employees productivity can be enhanced quite easily. Without leadership, organisation cannot work. In reference to leadership, charismatic leaders can be enumerated in this aspect. This type of leaders have clear vision to be accomplished by encouraging employees to achieve goals. After post acquisition, the affect of the same can be clearly seen on leadership style which completely changed after acquisition. The post-acquisition leadership style implemented by Co B is autocratic leadership. In contrary to this, prior to acquisition, Co A was following transactional and transformational leadership. Thus, contemporary approaches to leadership can be described as autocratic, transactional and transformational leadership. In order to evaluate to the power and politics of the organisation, the internal position and management style of managers has been assessed. According to the given scenario after acquisition company, B should lay emphasis on managing change within the firm. For this purpose, it can adopt Kaleidoscope model which aid inmanagingthechangewiththeorganisation.Thismodelisusedtosupportstrategic development and changes along with this other topic like organisational change. It contains eight components which help in measuring the positive, neutral and negative in the context of changes. 2
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Therefore, to cope up with changes company B need to focus on power elements. It helps in delegating the power to the employees and other stakeholders. ANALYSIS Models and approaches for manage acquisition Contemporary approaches to leadership Leadership is required so that company may be able to perform well with adequate monitoring in all aspects and as such, employees productivity can be enhanced quite easily. Without leadership, organisation cannot work. In reference to leadership, charismatic leaders can be enumerated in this aspect. This type of leaders have clear vision to be accomplished by encouraging employees to achieve goals. Co A which was the biggest heavy engineering company almost 200 years old was performing well in the past several years with adequate output and enhanced revenue. But it was acquired in 2017 by another giant Co B to double the resources and efficiency of company and to attain more revenue. After post acquisition, the affect of the same can be clearly seen on leadership style which completely changed after acquisition. The post-acquisition leadership style implemented by Co B is autocratic leadership. In contrary to this, prior to acquisition, Co A was following transactional and transformational leadership. Thus, contemporary approaches to leadership can be described as autocratic, transactional and transformational leadership. All these styles of leadership are different from each other in accordance to accomplishing objectives of the organisation (Cameron, 2011). Starting from autocratic leadership which follows strict influences oftakingtheirowndecisionswithlittleornoinfluenceofotheremployees.Thus,no participative decision is entailed and as such, autocratic leaders have full control over taking decisions. Subordinates have to follow rules provided by them so that goals can be timely achieved with much ease. On the other hand, transactional leadership means that employees are motivated to accomplish tasks with already established procedures. This implies that workers are encouraged to do tasks so that set targets can be achieved. In simple words, this type of leaders, provide guidelines to workers to achieve higher productivity and as such, strategic goals may be achieved within stipulated time frame (Cameron, 2011). Thus, this leadership model is based on the principle that leader supervises and instructs employees to attain tasks and activities in effective 3
manner. Thus, this leadership works successfully when there is structured atmosphere in the company. On the contrary, transformational leadership means that leaders clearly states the vision of the company and employees are inspired to accomplish tasks in the best possible way. Transformational leaders set clear goals and expects employees to perform in accordance to the objectives framed by the organisation (Castells, 2010). Thus, it clarifies that prior to acquisition, CoAwasfollowingtransformationalleadershipstyleclearlyfocusingoninvestingon employees' development and motivating them to achieve set targets in effective way. But after acquisition by Co B, firm has adopted autocratic leadership style which is led to redundancies in retention of employees quite adversely. The workforce has been reduced up to 10 % which has impacted overall organizational structure as well. Thus, it can be said that transformational leadership was much beneficial for the company which has resulted in retention of employees and enhancement in overall development of Co A prior to acquisition by Co B. Organisational culture The organisation culture of Co A has been completely changed after acquisition. The company was performing good in the past several years. The employees were providing higher productivity and company was attaining desired revenue. But after acquisition by Co B, the scenario completely changed in the manner which deteriorated performance of the company. After acquisition, transformational leadership was discontinued and replaced by autocratic leadership. This has led to significance difference in the organisation culture as employees were leaving continuously (Hunter, 2011). The organisation has gone significant change as leadership style followed by Co B is autocratic one which is disheartening employees as strict control is initiated on them to achieve goals within stipulated time. Transformational leadership which was earlier followed by the company has provided effective results in terms of profitability, operations and information system were good and Co A was providing good results. But after the acquisition, company policies significantly changed and firm lead to decrease in terms of employees workforce which has marked overall reduction of 10 % related to employees. This has changed organisational culture in quite adversely. The leadership style was transformational which was gaining results in effective way. This has lead to gaining good revenue within several years. Co A was focusing on staff development and attaining good productivity and efficiency so that overall production was enhanced. 4
The operations of company were also enhanced before acquisition. This is evident from the fact that organisation is able to inject operations in the effective way. The company has covered market of oil, gas, nuclear power and other industrial engineering goods to customer to enhanced their level of satisfaction. In relation to this, SCM (Supply Chain Management) was also good and timely demand of customers were also fulfilled in a better way. But after acquisition by Co B, employees turnover rate is continuously increasing which has led to severe downfall of performance of company quite adversely.Company A after acquiring company B has faced 10% reduction in the total number of employees that seems to be a vital cause of their changed culture. Earlier, they were operating within a transformational approach of leadership that was much more focussed on motivating the employees and engaging them in the process of decision making(Hunter, 2011). This later converted in transactional approach of leadership that was much more based on the procedure of supervising with less involvement of low level employees. This in turn depicted the application of autocratic form of leadership which a strict outlook of instructing the workers to perform well rather acknowledging their own set of interests. Kaleidoscope Model According to the given scenario after acquisition company, B should lay emphasis on managing change within the firm. For this purpose, it can adopt Kaleidoscope model which aid inmanagingthechangewiththeorganisation.Thismodelisusedtosupportstrategic development and changes along with this other topic like organisational change. It contains eight components which help in measuring the positive, neutral and negative in the context of changes. Therefore, to cope up with changes company B need to focus on power elements. It helps in delegating the power to the employees and other stakeholders. Power: As per the given case Company B has acquired A firm. Through evaluating it is identified that several changes are needed to be done in management such as roles changes etc. Further, B a parent company has fired 10% of global workforce. Along with this, it is using autocratic leadership style in order to manage the employees. This all changes lead to impact firm in positive and negative manner. B company need to focus on using participative leadership style so that it can motivate its employees and encourage them to provide innovative ideas for success (Lewis, 2011). 5
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Diversity: It is analysed that work culture can greatly affect due to the acquisition by company B. further new management use a different leadership style that negatively impacting previous employees. Hence it can be stated that it is important to manage diversity within the firm because many employees are leaving the firm. Scope: After the acquisition, the entire organisation is getting affected because previous employees are not able to manage within the environment and all the business activities are not carried out in a systematic manner. Along with this due to democratic leadership style employees are not able to accept the changes. Time: From the analysis, it can be stated that all the changes within the firm should be implemented on time. It is because employees are leaving the organisation which impacts the entire organisation operations (Phee and 2010). Along with this, other stakeholders who have associated with the firm also, directly and indirectly, getting impacted. Hence company need to use the systematic procedure in order to formulate new strategies and implemented them on time in order to manage changes in an effective manner. Preservation: After the acquisition, all the assets of company A has been transferred to company B. Further company B has also disbanded SPEAR team which is established by company A for the specific task. Hence it implies that essential assets that are employees of the firm got redundant. Therefore, it is essential for the company B to understand the importance of employees instead of firing them. Capability: Capability refers to the ability to manage the change within the firm. From the case it is analysed that company B has acquired company A but they are unable to manage changes within the firm successfully due to the inappropriate leadership and management style. Readiness: It is analysed that previous employees are not ready to accept the changes. Therefore, company B need to ensure that all its employees accept the changes. For this purpose, the company can use motivational tool or changes its leadership style (Tony, 2005). Knowledge transfer model Knowledge transfer is referred to sharing or disseminating knowledge and providing inputs to problem-solving. In organisational theory knowledge transfer is one of the practical problems in order to transfer knowledge from one part of the firm to another. According to the given case company B has acquired company A, therefore it needs to manage lots of changes within the firm. Here company needs to focus on transferring the information between its 6
employees related to the changes which they are implementing within the firm. Along with this, it focusses on providing information to its employees related to the new way of working or provide training and development facility in order to cope up with changes. Power and Politics From the analysis of the case, it was identified that due to financial issues and problems, Co A has been acquired by Company B. The corporate culture of Co A was efficient where management listen to the employees and they were allowed to participate in the decision making process of the company. The power is distributed among managers and leaders where they can take decisions which gives benefits to the organisation. After the acquisition, the corporate culture got transformed enormously as new CEO follows autocratic leadership style within the organisation. In this context, Power and politics of company B will be analysed: Power:Power is the ability to influence the person. It is not the same as authority, which refers to the power vested in a particular position . It is not synonymous with influence, either, since someone who has power may not be able to influence others while someone without power may have the ability to influence others. Power, authority, and influence are all integral parts of any organization. After the acquisition of Co A, the power of decision making transfer to the management of Co B. All the policies and procedures in the organisation are formulated by CEO of Co B. Power has been taken from employees and managers of Co. A that impacts on the behaviour of employees negatively. Politics:Organisational politics are activities that allow people in organisations to achieve goals without going through formal channels. Organisational politics influence the employees either positively or negatively (Woods, 2005). In context, with the present case, it was identified that management of Co B due to inappropriate managing style unable to manage the previous employees of Co A. They declare them redundant and disband SPEAR team which impacts on the behaviour of employees and they begin to leave the organisation. Thus, politics was seen in the newly acquired organisation. CONCLUSION From the above report, it can be concluded that company A was ready to acquire by company B because they know it is essential for carrying out the business for a longer time. Further shareholder of the firm also supports company A as because they know through acquisition total valuation of the firm can be enhanced. Here company A was operating its business in different 7
countries and its suppliers, customers and clients are an important stakeholder. After acquisition there are lots of changes take place within the firm such as leadership and management style were changeswhich lead to impactingcompany,previousemployees. Duetoautocratic leadership style employees started leaving the firm. Along with this many of the skilled employees were terminated by company B. Further, it is concluded that company can use Kaleidoscope model in order to manage the changes within the firm successfully. It is one for the effective tool that helps in understanding the process of transformation of the firm. It consists of eight elements that aid firm in managing the changes successfully. Along with this company can used cultural web model in order to manage the diversity within the firm. With the use of the cultural web, the model company can easily identify its six interrelated elements that help in implementing changes successfully. Power is the ability to influence the person. After the acquisition all the power has been transferred to company B. Therefore, they can make all the decision and manage changes by their own way. The power is distributed among managers and leaders where they can take decisions which gives benefits to the organisation. At last it is summarised that organisational politic also lead to influence employees. CompanyB need to focus on implementing changes within the firm without using power and politics in negative manner. RECOMMENDATIONS Merger and acquisition brings loads of changes in the organisation. It impacts on the overall corporate culture and employees behaviour. If the management unable to stabilise the situation efficiently, they have to face uncertainties and risks. Thus, it is very important for the management of the organisation to implement the changes accordingly and appropriately so that the goals and objectives of the company can be attained efficiently. In order to enhance the productivity and profitability, without compromising the internal assets of the Co B, the management has to follow the recommendations which are provided below: 1.Managing Diversity:From the analysis of the case, it was identified that employees of Co A was dissatisfied with the management of Co B as they were not able to manage diversity in the organisation. It is recommended to the management of Co B to manage diversity in the organisation appropriately so that organisational performance can be improve and redundancies can be ceased. 8
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2.Appropriate leadership style:From the analysis of the case it was identified that changes in leadership style creates dissatisfaction among the employees of Co A. Autocratic leadership style dominates them and forces them to follow the order of leaders. Thus, in order to increase the satisfaction of employees, it is recommended to the management of CoBtochangetheirleadershipstyleintocontemporarysothatorganisational performance can be enhanced. 3.Providing training to employees:Training anddevelopment is important for raising skills and abilities of employees. The new management of Co B declared employees as redundantwhichimpactsonotheremployees.Thus,itisrecommendedtothe management of Co B, that instead of declaring them redundant, the management needs to provide effective training to raise their skills and competencies. 4.Taking time for making changes:Management and employees needs to understand that changes cannot be made rapidly. In order to bring effective changes in the organisation it is recommended to the management to take time and formulate precise strategies which can develop the motivation and satisfaction of employees. Ultimately, the management will able to accomplish their desired aim and objectives efficiently. 5.Appropriately managing resources of organisation:After acquisition, Co B disband SPEAR team formulated in Co A. Furthermore, they have discarded some of the resourcesoftheorganisation.Inordertoraisetheprofitabilityandenhancethe performanceoftheorganisation,themanagementneedstomanageresources appropriately and effectively. 9
REFERENCES Books and Journals Cameron, K. S., 2011. Diagnosing and changingorganizationalculture: based on the competing values framework. 3rdedition. John Wiley. Castells, M., 2010.The rise of the network society. 2ndedition. Wiley Blackwell. Hunter, M., 2011.Thetransformational CIO: leadership and innovation strategies for IT executives in a rapidly changing world / Hunter Muller. John Wiley. Lewis, L. K., 2011.Organizationalchange: creatingchangethrough strategic communication. Oxford : Wiley-Blackwell. Phee, M. and E. J., 2010.Mastering strategic risk: a framework for leading and transforming organizations. John Wiley & Sons. Tony, M., 2005.Corporate riskmanagement.John Wiley. Woods, P. A., 2005.Democratic leadership in education. Paul Chapman. Online MergersandAcquisitions.2015.[Online].Availablethrough: <https://www.edupristine.com/blog/mergers-acquisitions>. 10