An Analysis of Mergers and Acquisitions

The assignment provided is a comprehensive analysis of mergers and acquisitions, covering topics such as interorganizational relationships, corporate strategies, and institutional logics. It includes essays on product recalls, mergers & acquisitions, and strategic alliances, providing insights into the governance of corporate spinoffs, merger and acquisition decisions, and post-acquisition performance. The document also explores the role of interorganizational trust in the merger and acquisition process and discusses the performance effects of top management team gender diversity during M&As.

LEADING AND
MANAGING
ORGANISATIONS

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
ANALYSIS......................................................................................................................................2
CONCLUSION................................................................................................................................6
RECOMMENDATIONS.................................................................................................................6
REFERENCES................................................................................................................................8

EXECUTIVE SUMMARY
Acquisition is the process through which one organisation takeover another organisation
in order to enhance the productivity and profitability of company. The hot topic of present study
is acquisition and chosen organisation is Hayward Tyler group and Avingtrans Plc. Avingtrans
acquired Hayward Tyler group in September 2017. In this context, the present study
demonstrates the factors of acquisition and its process. Merger and acquisition are done by the
organisation in order to establish more value compared to being on an individual. Merger and
acquisition impacts on the leadership, business operations and employee behaviour. Behavioural
theory has been applied in the report to assess the factors that determines the behaviour of
employees. From the analysis of the case study of Hayward Tyler, it was identified that there
were situational leadership style which has been followed by the organisation in order to guide,
motivate and influence the employees. After the acquisition, autocratic leadership style has been
followed in the organisation which impacts on the motivation of the employees. There were
many factors that influences the directors of Hayward Tyler to agree with the acquisition with
Avingtrans plc. In order to increase the productivity and profitability of the organisation and
sustain in the competitive environment, the management of organisation acquired the other
organisation.
INTRODUCTION
Merger and acquisition are concerned with the combination of two or more organisation.
When the two separate companies combine to form any new company in order to sustain in
competitive market or build new source of revenue, then this process is known as merger
(Mellewigt and et.al., 2017). Acquisition is the process through which one giant organisation
acquire or obtains the majority of stakes of other relatively small organisation in order to
maximise its profits and customers but did not transform its legal structure or change its name.
Merger and acquisition are done by the organisation in order to establish more value compared to
being on an individual. In accordance with this context, the following report will focus on
acquisition of two companies which were Hayward Tyler and Avingtrans plc of United
Kingdom. Both the organisation specialises in heavy engineering, designing and manufacturing
motors, pumps, compressors and steam turbine generators for applications across power, oil and
gas and nuclear sectors. In this context, the effects on leadership, direction and culture of both
the organisation will be analysed. With the help of theories and analysis of literature, the concept
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of acquisition will be acquired in this report. Furthermore, the key factors of merger and
acquisition will be discussed in this report.
ANALYSIS
According to Greve and Zhang, 2017 acquisition is the process through which one
organisation takeover another organisation in order to enhance the productivity and profitability
of company. Acquisitions can be taken place by purchasing assets of company, purchasing
common shares, exchanging shares for assets and by exchanging shares for shares. The
acquisition of organisations has been made due to many reasons. Steinbach and et.al., 2016
enunciated that a company acquire other company or group of companies in order to robust the
financial positions, improving the performance of organisation, economies of scale, increasing
the range of products, enhancing market share, strategic realignment and technological change,
tax consideration and diversification of risk. The process of acquisition is segregated into four
steps. The first step is establishing target choice where the company apply two criteria which are
strategic fit and organisational fit (Koo, 2015). The second step is negotiation where both the
organisation make and formulate certain agreements of acquisition. Integration is the third step
or process in acquisition where the extent of strategic interdependence and need for
organisational autonomy has been decided by the organisation. The last process is results where
the acquisition results has been considered by the organisations. Acquisition is done by the
organisation in order to enhance its productivity and profitability. Hayward Tyler is 200 year old
heavy engineering company with worldwide business operations. The company has effective
culture, leadership and business skills. After the acquisition of the organisation, the leadership,
operations and culture was greatly affected. Immense transformations in the business operations
can be observed after Hayward Tyler got acquired by Avingtrans plc. Leadership in the
organisation refers to the practices where leaders or managers guides or influence their
employees. From the analysis of the case study of Hayward Tyler, it was identified that there
were situational leadership style which has been followed by the organisation in order to guide,
motivate and influence the employees (Parola, 2015). After the acquisition, autocratic leadership
style has been followed in the organisation which impacts on the motivation of the employees.
Furthermore, the organisational culture has been effected since the acquisition in the
organisation. According to the Behavioural Theory, the behaviour of individual greatly
influenced by the conditions he or she is been gone through (Nason, Bacq and Gras, 2017.).
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After the acquisition of Hayward Tyler, the behaviour of employees drastically changes. They
remain unable to adapt in the autocratic leadership environment. This impacts on the quality of
production and employee motivation and satisfaction. Employees unable to adapt in the new
corporate culture left the organisation and other take the voluntary retirements. There were many
factors that leads the organisation towards acquisition. There were many factors that influences
the directors of Hayward Tyler to agree with the acquisition with Avingtrans plc. In order to
increase the productivity and profitability of the organisation and sustain in the competitive
environment, the management of organisation acquired the other organisation (Busenbark, Lange
and Certo, 2017). Researchers and scholars have analysed the leadership and organisational
culture transformations and contends that due to acquisition, the acquiring company imply norms
and regulations on the acquired company. This either boost up the morale and motivations of
employees or degrades and increases dissatisfaction among employees. Leadership and talent
retention are critical HR-related components in post-merger and acquisition (M&A) integration,
but the extent to which these factors interact with each other and eventually contribute to the
success of post-M&A integration is under-explored. Malhotra, Morgan and Zhu, 2016 argues
that there were many challenges that faced by the management of organisations after the merger
and acquisition. The first challenge is communication challenges. The managers faced issues in
making effective communication in the organisation due to transformation in policies and
regulations. When mergers and acquisitions occur, employees and management are generally left
in the dark. Fear and lack of answers deter top management from providing the information that
employees need to redirect their actions in the merged company. Management faced another
challenge of retention of employees. As in case of acquisition of Hayward Tyler, it was
identified that employees were not able to adapt in the autocratic environment of Avingtrans plc,
they left the organisation. Here the management of Avingtrans faced employee retention
challenge and it impacts on the goodwill of the organisation. Furthermore, the company 10 per
cent of global workforce of 500 employees were made redundant by the organisation. This,
negatively impacts on other employees and colleagues working within the organisation. Cultural
challenges is yet another challenge that impacts on the organisational operations. Mergers and
acquisitions usually occur because financial and business rationale add up, but fail to realise the
cultural implications that may occur. Culture in organisation refers to the interpersonal
relationship between employers and employees, shared values, beliefs and attitudes towards each
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other. Researcher identified that culture of organisation got transformed greatly because of
acquisition. It becomes difficult for previous employees to adjust in the new environment and
thus conflicts and disputes can be observed in the organisation. As per the case study analysis of
Hayward Tyler and Avingtrans Plc, it was identified that huge transformations in the
organisational culture has been observed after post acquisition of the organisation (Sarkis, 2014).
Thus, it implies that organisations and management faced many difficulties and challenges due to
merger and acquisition. It is the duty and responsibility of the management to make effective
policies that will help in increasing the productivity and profitability of the organisations. The
factors that lead to acquisition of Hayward Tyler group are described below: Increase the revenue: The organisation was facing issues in generating revenue since
previous years. Heavy losses has been observed in the past by the management which
lead to increase in the overall debt to the company (Feldman, 2016). The major reason for
acquisition of the organisation is to increase the revenue of the company so that losses
can be recovered effectively and efficiently.
 Increasing the shareholder value: The shareholder value of the Hayward Tyler group
kept on declining in the past which impacts on the overall growth and development of the
organisation (Parola, Ellis and Golden, 2015). This was consider as another reason or
factor of acquisition of the organisation.
The overall congruence of the merger and acquisition of the organisation is described below: From leadership perspective: After analysing the case study of the acquisition of the
companies, it was identified that leadership style and structure got transformed to
autocratic leadership style. According to Morresi and Pezzi, 2014 autocratic leadership
style refers to authoritarian leadership style which characterised an individual to make
little involvement of employees and formulate decisions and strategies without any
consent of workers. This affects the behaviour of employees of Hayward Tyler greatly.
Further, the special team which was known as SPEAR team got disband in the new
acquired organisation which was Avingtrans plc. Thus, the acquisition was not successful
for leadership perspective. Employee Behaviour: Employee behaviour plays prominent role in the growth and
development of the organisation. After the acquisition, the company made 10% of global
workforce of 500 employees redundant. This impacts on the behaviour of existing
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employees and many of the previous employees left the organisation and others applied
for voluntary retirement scheme. Thus, from this it can be understood that in terms of
employee behaviour, the acquisition of the organisation is not much congruence. Growth and development: Growth and development is the essential factor that impacts
the organisation performance. The main motive of acquisition was to increase the
revenue and sales of the organisation. In order to sustain in the competitive environment
it is very important for the organisation to make efforts that helps in enhancing the
productivity and profitability of the company (Phillips and Zhdanov, 2017). As Hayward
Tyler got acquired by Avingrans Plc which was more larger in terms of market share. The
organisation increases its production capacity and thus leads towards growth and
development. Shareholder value: According to Changphao, 2016 shareholders are those persons who
purchase the share of the organisation. Nobody wants to purchase the share of those
companies whose market value is going down rapidly. Same was in the case of Hayward
Tyler group as the market and share price of the company was going diminishing,. Thus,
it influences the share holder of the organisation negatively. After the acquisition, the
company stock price got increases and shareholders begin to retain (Thornton, 2017).
Thus, from the shareholder value perspective, the acquisition consider be congruence and
successful. Organisational culture: Organisational culture plays prominent role in the company. The
positive organisation culture increases the harmony and environment of trust in the
organisation and negative organisational culture increases disputes and conflicts within
the organisation (Mellewigt and et.al., 2017). After analysing the case of acquisition of
Hayward Tyler and Avingtrans plc it was identified that the culture of organisation got
transformed dramatically influencing both the management and employees negatively.
Thus, from the view of organisational culture, the acquisition is not congruence and
successful.
 Business operations: From production to distribution, from marketing to managing the
human resources, all the aspects has been greatly affected after merger and acquisition
(Greve and Zhang, 2017). As in the acquisition case of Hayward Tyler and Avingtrans
plc, the day to day business operations has been affected due to increase in dissatisfaction
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among employees. Thus, it implies that organisation needs to focus on the business
operations in order to reduce the impact of acquisition on employees.
CONCLUSION
From the above study, it can be concluded that merger and acquisition takes place when
one or more organisations were unable to generate the revuene or maintain the shareholder value
which are essential to sustain in the competition. In this context, the hot topic which was
acquisition has been covered in this report by covering all the aspects of acquisition. With the
help of acquisition case of Hayward Tyler group and Avingtrans plc, the factors of acquisition
and its impacts on leadership and management has been assessed in this assignment. The report
aid in analysing the researchers reviews regarding the acquisition and it was identified that a
company acquire other company or group of companies in order to robust the financial positions,
improving the performance of organisation. There were many factors that influences the
directors of Hayward Tyler to agree with the acquisition with Avingtrans plc. In order to increase
the productivity and profitability of the organisation and sustain in the competitive environment,
the management of organisation acquired the other organisation. Researchers and scholars have
analysed the leadership and organisational culture transformations and contends that due to
acquisition, the acquiring company imply norms and regulations on the acquired company. The
process of acquisition has been described briefly in the assignment. With the help of 360
congruence, the impact of acquisition has been assessed in the report. Thus, it can be understood
that the acquisition was not much successful as previous employees are found to be dissatisfied
with the new policies and leadership styles.
RECOMMENDATIONS
After analysing the acquisition case of Hayward Tyler and Avingtrans plc, many issues
and problems has been identified that impacts on the aggregate growth and development of the
company (Steinbach and et.al., 2016). Thus, below are the recommendations provided which will
help in enhancing the brand value and organisational culture of the newly acquired company. Improving leadership style: Earlier the situational leadership style was followed in the
Hayward Tyler group which helps and guide employees effectively. Autocratic
leadership style after the acquisition impacts on the behaviour of employees. Thus, it is
being recommended to the management to focus on the leadership style and transform it
efficiently so that employee motivation can be increase.
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 Focusing on employee motivation: Employee becomes dissatisfied and demotivated in
the acquired organisation due to rigid policies and tight regulations (Koo, 2015). It is
recommended to the organisation and human resource management to formulate and
implement efficient HR practices and policies that helps in regaining the motivation of
employees. Employee participation in management: Employee participation in management will
help in boosting up the morale and motivation of employees (Parola, 2015). Thus, it is
recommended to the management to follow the practice of involving employees in
decision making which leads to positive corporate culture in the organisation.
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REFERENCES
Books and Journals
Busenbark, J.R., Lange, D. and Certo, S.T., 2017. Foreshadowing as Impression Management:
Illuminating the Path for Security Analysts. Strategic Management Journal, 38(12),
pp.2486-2507.
Changphao, P., 2016. Essays on interorganizational relationships and corporate strategies:
Product recalls, mergers & acquisitions, and strategic alliances. The University of Texas
at Dallas.
Feldman, E.R., 2016. Dual directors and the governance of corporate spinoffs. Academy of
Management Journal, 59(5), pp.1754-1776.
Greve, H.R. and Zhang, C.M., 2017. Institutional logics and power sources: Merger and
acquisition decisions. Academy of Management Journal, 60(2), pp.671-694.
Koo, J., 2015. CEO characteristics of acquired firm and post-acquisition performance: Focusing
on Korean in-bound deals. Waseda Business and Economic Studies, 50, pp.55-79.
Malhotra, S., Morgan, H.M. and Zhu, P., 2016. Sticky Decisions: Anchoring and Equity Stakes
in International Acquisitions. Journal of Management, p.0149206316664008.
Mellewigt, T., and et.al., 2017. Alliance or Acquisition? A Mechanisms‐Based, Policy‐Capturing
Analysis. Strategic Management Journal, 38(12), pp.2353-2369.
Morresi, O. and Pezzi, A., 2014. Cross-border M&As: Theory and Strategic Process. In Cross-
border Mergers and Acquisitions (pp. 85-135). Palgrave Macmillan, New York.
Nason, R., Bacq, S. and Gras, D., 2017. A Behavioral Theory of Social Performance: Social
Identity and Stakeholder Expectations. Academy of Management Review, pp.amr-2015.
Parola, H.R., 2015. The role of interorganizational trust in the merger and acquisition process.
Florida Atlantic University.
Parola, H.R., Ellis, K.M. and Golden, P., 2015. Performance effects of top management team
gender diversity during the merger and acquisition process. Management Decision, 53(1),
pp.57-74.
Phillips, G.M. and Zhdanov, A., 2017. Venture Capital Investments and Merger and Acquisition
Activity Around the World (No. w24082). National Bureau of Economic Research.
Sarkis, H., 2014. A cognitive perspective of decision making in acquisition programs: insights
from the high technology industry. The Journal of Modern Project Management, 2(1).
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Steinbach, A., and et.al., 2016. Peering into the executive mind: Expanding our understanding of
the motives for acquisitions. In Advances in mergers and acquisitions (pp. 145-160).
Emerald Group Publishing Limited.
Online
Thornton, D., 2017. Avingtrans getting to grips with Hayward Tyler acquisition. [Online].
Available through:<http://www.growthcompany.co.uk/avingtrans-getting-grips-hayward-
tyler-acquisition-2556563/>
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