Merger between Dewaal and BioHealth: A Critical Analysis

This paper analyses the merger between Dewaal and BioHealth, focusing on the impact of cultural differences, inappropriate management of organizational assets and the haphazard assessment of employee performances. The paper recommends significant helpful steps in order to restructure the HR segment along with modifications in their operations.

Running head: CONTEMPORARY MANAGEMENT
Merger between Dewaal and BioHealth
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Executive Summary:
The purpose of the assignment is to develop understanding and knowledge regarding the
concepts of management theories which are relevant in the current business environment.
While taking strategic decisions the company has to establish a number of analysis and data
points based on which policies or decisions are formulated. The mergers and acquisitions are
important tactics in the modern day business world in order to expand the business. A merger
is considered as an agreement which is used to unite two active organizations into one single
company. The purpose of any merger or acquisition is to grow the business. But along with
the gains of the tactics, the method also includes significant amount of conflicting values and
troubles in the process of smooth integration. The paper analyses one such merger between
the BioHealth and Dewaal. The focus of the report is on the impact of cultural differences,
inappropriate management of the organizational assets and the haphazard assessment of the
performances of the employees. The paper is able to be recommending significant helpful
steps in order to restructure the HR segment along with modifications in their operations.
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Table of Contents
Introduction:...............................................................................................................................3
Conflicting Values at Stake:.......................................................................................................3
Critical Analysis of the Process of Integration:.........................................................................4
Solution to the Organizational Conflict:....................................................................................7
Recommendations for the Smooth Integration Process:............................................................8
Usefulness of the Management Theories:................................................................................10
Conclusion:..............................................................................................................................10
References:...............................................................................................................................12
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Introduction:
The organizational change is an important aspect of the organizational proceedings
where the organization generally restructures the different elements of it in order to get better.
The general organizational changes are visible in the form of business expansions which
generally focuses on increasing the profitability of the organization (Alvesson &
Sveningsson, 2015). The general form of the business expansion will include the mergers and
acquisitions. The merger is generally aimed to improve the current situation of the
participating organizations but it is also observed that the organizational conflicts between the
participating organizations may also demoralize the growth of the new organization
(Trautwein, 2013). The paper discusses the context and the conflicting issues related to a
merger and the solutions for the issues as well.
Conflicting Values at Stake:
The major conflicting issue for the formation of the new company is the incapability
in the decision making from the part of the CEO Steve Lindell and the chairman Kaspar van
de Velde. According to the study of Lubatkin (2013), one of the major important factor in the
merger and acquisitions is the synchronization among the two companies or the employees of
that concerned organizations. The first obstacle in the smooth conduction of the merger was
the trust issue of Steve on Kaspar as it was observed that Steve feared the excellence of
Kaspar in managing the media. Steve was afraid of the fact that Kaspar would pretend in such
a way to the media that it will reflect he has more importance in the decision making for the
new organization. One of the most important theory in the stabilization of the workplace in
cases of merger is the assurance of the continuation of the important and efficient employees
(Ahammad et al., 2016).
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It is necessary to have the people who will do the task with rapid speed rather than the
people who will take some extra hours to sort things in case of the mergers. But both Kaspar
and Steve were not acknowledging the fact. Steve was right with his thought of increasing the
speed in the process of the merger but in case of any organization the process of collecting
people haphazardly in order to assign them important posts and then if something goes wrong
the try of fixing them is not appreciated at all. The process recommended by Steve will
incorporate certain level of vulnerability among the employees and that would eventually
result in the separation of efficient employees from the organization. On the other hand
Kaspar was also not concerned about the speed in the process of the merger. Along with these
the merger faced the significant challenge of the cultural differences when both of the
individuals were not able to address the issue. Steve was observed to favour to favour his
own employees whereas Kaspar was significantly concerned with the impact of his decision
on the people of Rotterdam. The senior level employees of both the organizations felt the
same issue as they were significantly observed to have an attitude like “they are not like us”.
It was believed to have a major impact on the organizational culture of the merged
organization. Lastly the process of selecting the key employees for the new organization was
also a point of concern as both of them were observed to ignore the in depth of analysis of the
facts and figures of the performances of their employees in the selection for the merged
organization. In accordance to the contingency theory of management, the top level
management executives were observed to forget to set the benchmark for the other employees
and it seemed that the competency to manage the organization was absent from their part
(Otley, 2016)). This created significant amount of annoyance and chaos among the
employees of both the organizations.
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Critical Analysis of the Process of Integration:
The general strategy that is used to acknowledge the process of integration is the
Appraisal or rewarding policy. When Allison informed Steve about the fact that considerable
amount of people are concerned about their job and some of them are thinking of getting
separated as well due to the well-structured offers from other organizations, Steve was
significantly concerned with current situation of the organization. He significantly tried to
assure people that the best ones for the business will be retained by the organization which is
visible from the conservation of Him with Allison. With the concept of the merger price in
the business, the organization was subjected to an increment in the shareholder values as well
(Miller et al., 2016). This will be instrumental for the rewarding policy as well.
In the process of the integration of the organizations, a major influential factor was
the fairness issue. As Christian Meyer significantly focused on the above mentioned issue
with precise focus on the IQ and emotional intelligence tests of the employees, Steve felt that
the fairness is appreciable but the under the circumstances of the merger, it is not the correct
time to have these specified tests. Steve felt that it will increase the consumed time for the
integration in a significant manner which according to him was not good at all as he was
incredibly focused on increasing the speed of the process. From the concept of effective
management, it is justified to establish the fairness among the process of the integration but it
is also desired that the increment in the speed of the process will also be there (Williams,
2015). The process of the integration was observed to be involved in significant conflicts
with the closure of the operations in the Indonesia plant. Kaspar was significantly concerned
with the people of Rotterdam regarding the proposal of Steve of closing the Indonesia plant.
The concept of favouring own people in this case was significant barrier for the smooth
restructuring of the new organization. Even Steve was observed to have the same issue when
he expressed his dissatisfaction on the people of Dewaal in his conversation with Bruce. For
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an effective and fruitful merger the synchronization of each and every party related to the
merger is significantly needed which was absent in the above mentioned case in a notable
manner (Armano & Reger, 2013).
Meyer was partially right about the demand of fairness as the employees of the
organization had no idea about the professional objectives that will be used to assess their
competency in the organization. Along with this, the employees were also unaware of the
benchmark that they need to reach in order to retained and rewarded by the organization. As
mentioned earlier this was a drawback for the organization which created significant amount
of chaos in the organization. The integration process was facing notable challenges due to the
issue. The integration process was observed to face the intense barrier with the selection of
the HR for the new organization as both the suitable options for the post was not up to the
desired mark. The issue with Meyer was that he cannot make decisions on the spot which
under the circumstances of the merger was significantly desired. He depends on the thorough
analysis for any sort of organizational decision making. In context of the mergers, Meyer’s
process was significantly time consuming. On the other hand, Bruce was a notable figure who
does not hold back and does not have any sort of fear in telling the absolute truth to Steve.
But his behavioural presence was acknowledged as funny. For a top level leader of the
organization, it is right to have a good communication and friendly mode of interaction with
the employees of the organization but it is not desired that he will lose the authority over the
employees in doing so. Steve feared that the recruitment of Bruce will create the above
mentioned issue.
Along with this, there were certain issues regarding the proper analysis of the
performance statistics of the employees in the selection of the workforce of the new
organization as both the leaders were observed to have a general lunch meeting in order to
sort such an important issues regarding the recruitment of the workforce. At the end Steve
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tried to inject the belief in his employees that each and every effective employee will be taken
care by the organization and the rewards for the ones who stay connected to the organization
after the merger was the reflection of the sense of urgency that Steve felt.
Solution to the Organizational Conflict:
One of the major conflicts in the organization was the concern of the fairness in the
organization. As both the leaders of the organization were observed to favour their respective
workforces in the merged organization, the concept of fairness becomes significantly
important. Hence the solution for the conflict will be the process of implementing a
transparent method of conducting the proceedings of the organization, may that be the
selection of the employees or the rewarding policy. The perfect evaluation of the performance
statistics should only be implemented in order to promote the employees. The assessment of
the performance of the employees will be best if it is done by external consultants. The need
of the external consultant is significant for the organization under the circumstances of the
merger as it would eradicate the internal politics, loyalty issues of the investigator, power
clashes and the cultural differences. The assessment of the external consultant will not be
biased as the consultant will be indifferent to support any of the parties of the merger. The
introduction of the external consultant will be instrumental as it would be able to provide
expressively treasured inputs to the HR integration along with the conduction of the detailed
structured interview sessions. In addition to this, the assessment of the external consultant
will also be able to incorporate a 360 degree feedback of every party related with the
organization which will be significant in understanding the exact condition of the
organization. The external consultants will also be helpful in conduction of a comparatively
correct assessment. The assessment of the external consultant will be significantly creative in
the identification of the roles inside the organization for the effective and productive
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employees. The assessment will also produce a benchmarking perspective to the ones who
came second in the race of getting selected in the merged organization.
Along with the above mentioned issue the merged organization faced significant
difficulty in portraying the managerial competencies where the top level executives of the
organization were not sure about the definition of the required competencies and their
behavioural indicators which they need to incorporate in themselves. The managerial post
holders of the organization were not competent in conducting their trade as they are observed
to be biased in their operations. The presence of cultural difference was also a significant
issue.
The employees of the two different organizations having their base in two different
nations were belonging two different cultures as well. Hence the employees of the different
organizations were able to inform the difference of them from the other employees by the line
“they are not like us”. The cultural differences in the workplace will be significantly affecting
the organizational culture as the important aspects of the organization like the communication
between the employees or the team work will get significantly hampered by the presence of
the differences in culture (Bochner, 2013). Hence the merged organization must introduce
several language and cultural assimilation training to both sets of employees so that an
appropriate and desired form of working environment gets established.
Recommendations for the Smooth Integration Process:
The merger created several issues for the two senior leaders of the mentioned
organizations. The list of the issues kept increasing from the cultural differences, merger
dynamics to recruitment procedures.
 As mentioned earlier the organization is recommended to include trainings on the
cultural assimilation, language and also they should advise the employees of different
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cultures to participate in the socio cultural activities of the new society. This will
significantly help the merged organization to have their employees get aligned to a
particular working culture where the environment of the workforce will be
appropriate (Matsumoto & Hwang, 2013). This will also help the employees of the
workforce in order to get along with employees of different culture where the
communication gap or the issues in team working will be eradicated.
 The need of a fair recruitment and performance assessment policy is significant for
the merged organization as both the organizational leaders were observed to favour
their people unethically. Hence the possible recruitment of external consultant is
incredibly valuable for the organization. The introduction of the consultant will enable
the organization to have an unbiased assessment of the performances of the
employees of both the organizations as the assessment of the external consultant will
not be subjected to the internal politics of the organization, loyalty issues to any team
or the cultural preferences (Nguyen, Reiter& Rigo, 2014). This will also be valuable
for the employees as the operation of the external consultant will also produce the
benchmark for them.
 Apart from this Steve and Kaspar should reconsider their process of decision making.
As the haphazard manner in such decisive planning from Steve is not appreciated at
all. Along with this Kaspar was not able to get the sense of urgency as well which can
be detrimental for the growth of the merged organization. Hence both the leaders need
to focus more on the ground problems so that they be effective enough to deal with
the problems which will be there even after the merger. The leaders must focus on the
growth of the merged organization rather focusing on their individual organizations
which will be implemented by focusing on the reduction of the operating cost and
increment of the quality of the service and product that they offer. The leaders need to
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effectively manage the ethical dilemma and the questions like the identification of the
tiebreaking criteria when two individuals are equally valuable for the organization, or
will there be any organization which will have more importance in the merged
organization due to its larger size or both the organization will be valued equally.
Usefulness of the Management Theories:
The leaders of the organizations were observed to use the contingency management
theory where there will not be any specific method of conducting the business of the
organization or there is no described method of leading the organization. In the mentioned
management theory, the leader applies his or her own style of leading according to the
assessment of the condition (Van de Ven, Ganco & Hinings, 2013). This was one of the
drawbacks of the merged organization as the absence of a prescribed method of leading the
organization created significant chaos inside the organization as both sets of employees were
insecure regarding their job in the merged organization. The theory of the cultural assessment
in organizational context is also helpful in the evaluation of the cultural difference among the
employees of two different organizations belonging to two different cultures (Banks, 2015).
The theory was instrumental in the correct evaluation of the solutions that need to be
taken by the organization in order to reduce the culture shock among the employees. This
also enabled the employees to have a better understanding between each other which will be
significant in the long run as the productivity of the employees will increase as a result. The
improvement in the communication is an influential factor in the theory of management and
the 360 degree feedback method is significant in implementing a better interaction between
the employees and the managerial post holders of the organization. This was significant in
analysing the performances of the employees on the basis of opinion from the employees of
other department as well.
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Conclusion:
On a concluding note it can be said that the merged organization significantly lacked
the synchronization of the two companies that were forming the merger. The detailed analysis
with the specific focus on the issues like the sense of urgency, proper method in restructuring
the workforce of the merged organization would have guaranteed the success of the merged
organization at a very primitive stage.
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cross-border acquisition performance: The impact of cultural distance and employee
retention. International Business Review, 25(1), 66-75.
Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural change
work in progress. Routledge.
Armano, M. J., & Reger, S. J. M. (2013). U.S. Patent No. 8,401,866. Washington, DC: U.S.
Patent and Trademark Office.
Banks, J. A. (2015). Cultural diversity and education. Routledge.
Bochner, S. (Ed.). (2013). Cultures in contact: Studies in cross-cultural interaction (Vol. 1).
Elsevier.
Lubatkin, M. (2013). Merger strategies and stockholder value. In Mergers & Acquisitions
(pp. 43-57). Routledge.
Matsumoto, D., & Hwang, H. C. (2013). Assessing cross-cultural competence: A review of
available tests. Journal of cross-cultural psychology, 44(6), 849-873.
Miller, N. H., Remer, M., Ryan, C., & Sheu, G. (2016). Pass‐Through and the Prediction of
Merger Price Effects. The Journal of Industrial Economics, 64(4), 683-709.
Nguyen, A. T., Reiter, S., & Rigo, P. (2014). A review on simulation-based optimization
methods applied to building performance analysis. Applied Energy, 113, 1043-1058.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, 45-62.
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Trautwein, F. (2013). Merger motives and merger prescriptions. In Mergers & Acquisitions
(pp. 14-26). Routledge.
Van de Ven, A. H., Ganco, M., & Hinings, C. R. (2013). Returning to the frontier of
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Management Annals, 7(1), 393-440.
Williams, C. (2015). Effective management. Cengage Learning.
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