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Merger Integration: Resolving Conflicting Values and Structuring Top Management in 'Who Goes, Who Stays?'

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Added on 2024/06/27

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This report analyzes the Harvard Business Review case study "Who Goes, Who Stays?" focusing on the conflicting values and integration challenges faced by DeWaal Pharmaceuticals and BioHealth Labs during their merger. It examines the cultural clashes, leadership styles, and top management staffing issues, applying relevant management theories like Resource-Based Theory and Institutional Theory of Diversity Management. The report provides recommendations for resolving conflicts, structuring the top management, and integrating the two organizations effectively.

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Assessment 2
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Contents
Introduction......................................................................................................................................3
1 What conflicting values are at stake in the case? Identify and explain, using relevant management
theory and concepts. Contextualise your answer with reference to literature on integration
problems in mergers and acquisitions, with specific reference to people issues.............................4
2. Critique the process that is being applied to work out the details of the integration, particularly
with regard to structure and top management staffing using relevant management theory and
concepts. Ground your answer in evidence regarding people and culture issues in merger
integration studies............................................................................................................................ 5
3 How would you recommend the conflicting values be resolved?................................................7
4. What process would you recommend that the two senior executives and their HR people follow
to work out the details of integration in regard to the top structure?...............................................8
5 Evaluate the usefulness of the management and organisational theories and practices from the
subject that you have applied in analysing the case........................................................................ 9
Conclusion..................................................................................................................................... 11
References......................................................................................................................................12
2

Introduction
When a company enters into a contract or merger or an acquisition, the company goes through
various changes which might have positive as well as negative impacts on the company. This
makes it important for the organization to make sure that these issues are identified at an early stage
such that mitigation strategies for the same can be effectively undertaken. In the management
report provided below, the impact of merger has been explained taking into consideration the case
study of Harvard Business Law i.e. “Who goes, who stays?” (Light, 2001). The analysis of this
case has been presented in the report which would be presented in the form of answers to some
specific questions.
3

1 What conflicting values are at stake in the case? Identify and explain, using
relevant management theory and concepts. Contextualise your answer with
reference to literature on integration problems in mergers and acquisitions,
with specific reference to people issues.
The conflicting values that have been identified in the case presented below are related to the
cultural issues in both the firms. Due to these cultural issues the head of both the companies i.e.
Steve and Kaspar are having a hard time in continuing this merger. This puts both the companies in
a bad position which is required to be effectively solved by the higher management of the
organisation. the cultural differences that are being faced by the organisation can be further studied
by the Resource-Based theory of Diversity Management.
The main aim of the Resource-based Theory is to identify the impact of diversity implementation
in a particular place. In the case of study presented, the implementation of diversity is felt on both
the firms i.e. DeWaal Pharmaceuticals and BioHealth Labs. It can be understood from the model
that both the companies due to the merger are facing the issue of placing qualified and talented
workers in a position best suited to them. The main reason behind the problem is inability of
companies to understand the needs and requirements of the employees. This makes it important for
the head of the organisation to ensure that this model is effectively implemented as this can help the
company to become a more diversified workplace and help talented employees to get uplifted as
well. apart from this, the organisation can also take into consideration the consultant Approach for
diversity management which can help the employers to better understand the needs and
requirements of their consumer base effectively (Grant, 2016). If the company is able to create a
positive diversity in the workplace, they would be able to transform the diverse differences into the
economic success of the company.
When a company enters into the merger process, the main issue that is faced by the organisation is
the amalgamation of diversity due to which the company is required to consider the needs of each
and every employee which causes the situation of a dilemma for the higher management. With high
diversity, the company is required to analyse the various behaviours of the employees as well
which puts the company in a position which is not viable. It has been identified that at times, the
company also might face the issue of high employee turnover. This might have a negative impact
on the reputation of the firm as well (Rispal & Servantie, 2018).
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2. Critique the process that is being applied to work out the details of the
integration, particularly with regard to structure and top management
staffing using relevant management theory and concepts. Ground your
answer in evidence regarding people and culture issues in merger integration
studies.
Corporate culture can be stated as the manner in which the company conducts its business. the
corporate culture of the organisation begins with a simple manner in which the management of the
company chooses to operate its business and percolates down the same to form the managerial
structure. In the corporate culture, there are various essential elements such as the manner in which
decisions are made, strategy of hiring employees, marketing efforts of the company etc. This
makes it important for the company to ensure that their corporate culture remains intact and there is
no interference from outside world which might harm this culture of the company (Frijns, 2016).
Though an organisation generally carries out its corporate culture for a lifetime, at times the
company enters into mergers or might be acquired by another firm as well. This issue makes it
important for the company to ensure that their organisational values are not harmed as this might
impact the working of the company in a negative manner. This issue is relevant to the facts gained
after reading the HBR case study. It should be noted that if the people in the company act on
rational calculation, the problems and issues faced in the mergers would not be faced and the
organisation would work in a smooth manner. It is important to note that the people that are
involved in the process of mergers are driven by culture and their individual personalities as well
due to which the organisation has to face various implications in this process (Banks, 2015).
In the case study presented by HBR, it has been found that the major issues faced by the firm are
generally related to the diverging interests if the employees of the company. Both the companies
want their managers to be placed at higher positions due to which the negative impact is levied on
the process of merger in the company. According to the case, the major issue that is faced by both
the companies is to determine who would be responsible for taking major decisions in the
company. as effective integration of the company required rapid decision making, it has been
found that this is the main issue which was found between heads of both the firms. This issue was
easily resolved by keeping Kaspar as the head decision maker due to his short tenure left before his
retirement (Alvesson & Sveningsson, 2015).
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Determination of the leadership style that would be followed in the company is another issue that is
faced by both the companies. The shift in leadership style can generate the turnover among the
employees that feel hesitant or might resist the change in the organisation. this is especially seen in
the higher management of the company which is also evident in the case itself. In case of both the
organisations, it has been found that there are various employees who have left their jobs as they
feel reluctant about the current changes (Martin, 2014). Loss of top talent in the company can
undermine the value in integration as it drains the company out of intellectual talent. Apart from
this, it has also been identified that often cases the employees in the company do not have the
ability to change with the environment and the conditions which are being faced by the
organisation. This impacts employee’s as well as productivity of the company. It also hampers the
strategic implementation in the company. this is not a profitable situation for the firm and it only
increases and created inevitable difficulties for the company (Wilson, 2014).
One of the major issue that the company faces in this manner is the inability of people to work with
employees with different cultures. It has been identified that in the merging of the two organisation
i.e. DeWaal and BioHealth, an interface between the major functions of the company has been
created which makes it important that the legacy of both the companies should be integrated with
the employee behaviour. If the cultural assumption of companies is inconsistent, the processes of
the organisation might frustrate the colleagues as they would have no idea about how the work is
required to be done (Westrup et. al., 2018). This breakdown and inconsistencies in the company are
one of the major issues that is seen in cultural and people related aspects that might hamper the
operations of the company. This may further disrupt the manner in which the company achieves its
goals and objectives.
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3 How would you recommend the conflicting values be resolved?
It has been identified that there are various ways which can help both the companies to resolve the
conflicting values that are being faced by both the organisation in the merger process. It has been
found that the first step that both the companies can take during the process of merger is to make
sure that the interest of the employees is taken care of. It is important for the organisation to
remember that there are various types of employees in the company and keeping focus on senior-
level employees can harm the interest of the lower cadre employees (Harinck & Druckman, 2017).
This issue might increase the employee turnover ratio in the company and the company might lose
out on its performance as well. this makes it important to consider the interest of each and every
employee.
Apart from this, it has been identified that while Steve is rushing things about the merger, Kaspar is
taking things slowly. It is important for both the heads of the company to recognise the value of this
merger and ensure that both the employees put efforts into this event. It is important for Steve to set
hit foot as well and not to go with demands of Kaspar. Influential way of speaking is one of the
major strengths of DeWaal CEO, and this might push Steve to take a decision that he might regret
in future. This it is important for him to talk about his plans as well.
It is important for Steve to take a constructive approach towards negotiation process. The meeting
about placing employees at senior position should be done taking into consideration things that are
negotiable and things that are not. There are certain things that cannot be negotiated such as
position of some senior employees of the company (Veage et. al., 2014). It has been identified that
in the case of this merger there are various positions that should be taken by the employees of
BioHealth which are currently being negotiated. It is important for Steve to work as a leader and
protect the rights and interests of his employees as well.
7

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4. What process would you recommend that the two senior executives and
their HR people follow to work out the details of integration in regard to the
top structure?
During the course of merger in the company, it is important to ensure that both the companies
should effectively consider the organisational structure of both the organisation and structure the
company in the manner such that long and short-term objectives are fulfilled. The HR and the
senior executives of the company are required to analyse the reporting structure and hierarchies
such that classes in the structure can be identified and synchronised. After the completion of initial
review in the company, it is important to appoint an integration team that will speak to core
employees and gain their perspective as well on the company merger (Kossek et. al., 2015). It is
important for the employees to be open about their needs and demands and they are also required to
suggest the higher management in their opinions as well.
As two big organisations become one it is important for the company heads to embrace the
challenge of difference in perspectives. This situation can become of the greatest advantages of the
company if it is taken effective care of. This can be understood from the example of senior
employees of the company that are losing power, as even these employees have valuable
information to offer to the company. it is important for the management of the company to treat and
respect the people of different cultures as this can not only smoother the processes in the company,
but can also help in repairing damages relationships as well (Manuti et. al., 2015). Collective
wisdom is the key here.
When there are various parties in the organisation that face the situation of conflict, it is important
for the company to incorporate innovatively and outside the box thinking. It is not necessary that all
the there is a win-lose outcome from a particular conflict and this makes it important to incubate
innovative or design thinking. This strategy can help in creation of a win-win situation.
8

5 Evaluate the usefulness of the management and organisational theories and
practices from the subject that you have applied in analysing the case
In order to analyse the case that has been presented, there is a critical use of various theories of
conflict management. These theories can help in gaining a general understanding of the issues and
conflict of interest that has been analysed in the case. The first theory that has been considered to
analyse the case is Institutional Theory of Diversity Management. According to this theory, it has
been analysed that in the organisational structure, the social environment of the company is an
essential constraint and it cannot be separated. If there is a change in the social environment, the
employees of the company might find it difficult to cope up with the same and this might create a
situation of chaos in the organisation which is seen in the case of BioHealth as many employees,
especially the senior management is now looking forward to leaving the firm (Bolman & Deal,
2017). This makes it important for both the CEOs to effectively understand the employee
behaviour and the limiting factors of the company as well. When two organisations have similar
norms, they tend to develop similar administrative structures as well and this is not seen in the case
of DeWaal and BioHealth. The conformity has shown that both the companies are willing to be
consistent with these norms and have started garnering the legitimacy of their operations as well.
this can be understood by the negotiation meetings taking place between Steve and Kaspar. In order
to sum this, it is important for both the companies to become diverse in their operations and ensure
that this cultural diversity is sustained to provide long-term benefits to the company (Greene &
Kirton, 2015). In order to do so, the senior management of the organisations is required to take
some corrective and important steps that can help the company to norms of diversity management.
Another theory that was used in order to analyse the situation was Resource-Based Theory of
Diversity Management. According to this theory, it is important for the management of the
company to ensure that implementation of diversity does not affect the resources within the
organisation which is also inclusive of human resources. There are four types of resources which
are possessed by an organisation i.e. financial, physical capital, corporate capital and human
resources. These resources might assist or inhibiting the organisational operations. This theory
states that more diverse the organisation is; more advantage it might gain over other organisations
that are homogeneous in nature. Racial diversity in the company might help in increasing the
financial performance of the organisation especially when the company uses innovation or growth
9

strategy (Bratton & Gold, 2017). It should be noted that when the companies use diversity
management, the organisation experience. low employee turnover which might put the company in
a situation of an advantage as compared to that of the situation of other organisations in the
marketplace. This diversity management also interacts with the innovation strategy in a sportive
manner as well. It should be noted that when the organisations are diverse in nature they are also
able to manage the employee interests in an enhanced manner which is the main core of the issue
that has been analysed in the case study.
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Conclusion
To sum up the report, it can be concluded that racial diversity and conflict management are
important aspects of every business. It is also important for the company to take effective measures
to ensure that needs and demands of employees are fulfilled. If the company fails to do so, the
internal conflicts might arise in the organisation which is not an advantageous situation for the
organisations that are competing in a market of intense competition. It has been analysed that
diversity management can help the companies gain various advantages over its competitors. This
makes it important to effectively implement these strategies of diversity management.
11

References
 Alvesson, M., & Sveningsson, S. (2015). Changing organizational culture: Cultural
change work in progress. Routledge.
 Banks, J. A. (2015). Cultural diversity and education. Routledge.
 Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and
leadership. John Wiley & Sons.
 Bratton, J., & Gold, J. (2017). Human resource management: theory and practice.
Palgrave.
 Frijns, B., Dodd, O., & Cimerova, H. (2016). The impact of cultural diversity in corporate
boards on firm performance. Journal of Corporate Finance, 41, 521-541.
 Grant, R. M. (2016). Contemporary strategy analysis: Text and cases edition. John Wiley
& Sons.
 Greene, A. M., & Kirton, G. (2015). The dynamics of managing diversity: A critical
approach. Routledge.
 Harinck, F., & Druckman, D. (2017). Do negotiation interventions matter? Resolving
conflicting interests and values. Journal of Conflict Resolution, 61(1), 29-55.
 Hlady‐Rispal, M., & Servantie, V. (2018). Deconstructing the way in which value is
created in the context of social entrepreneurship. International Journal of Management
Reviews, 20(1), 62-80.
 Kossek, E. E., Thompson, R. J., & Lautsch, B. A. (2015). Balanced workplace flexibility:
Avoiding the traps. California Management Review, 57(4), 5-25.
 Light, D. A. (2001). Who goes, who stays?. Harvard Business Review, 79(1), 35-41.
 Manuti, A., Pastore, S., Scardigno, A. F., Giancaspro, M. L., & Morciano, D. (2015).
Formal and informal learning in the workplace: a research review. International journal of
training and development, 19(1), 1-17.
 Martin, G. C. (2014). The effects of cultural diversity in the workplace. Journal of
Diversity Management (Online), 9(2), 89.
 Veage, S., Ciarrochi, J., Deane, F. P., Andresen, R., Oades, L. G., & Crowe, T. P. (2014).
Value congruence, importance and success and in the workplace: Links with well-being
and burnout amongst mental health practitioners. Journal of Contextual Behavioral
Science, 3(4), 258-264.
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 Westrup, C., Jaghoub, S. A., Sayed, H. E., & Liu, W. (2018, February). Taking culture
seriously: ICTs, cultures and Development. In Proceedings of IFIP WG9. 4 Working
Conference on ICTs and Development: New Opportunities, Perspectives and Challenges.
 Wilson, E. (2014). Diversity, culture and the glass ceiling. Journal of Cultural
Diversity, 21(3), 83.
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Merger Integration: Resolving Conflicting Values and Structuring Top Management in 'Who Goes, Who Stays?'

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