TMH0805_Contemporary Management

Running head: CONTEMPORARY MANAGEMENT
Who Goes, Who Stays?
Student’s name
Name of the Institute

TMH0805_CONTEMPORARY MANAGEMENT
Executive Summary
The report discusses the various aspects of people management during mergers and
integration. Various management theories and concepts are included to understand the given
case. The case talks about merger of two pharmaceutical companies. One company belongs to
American continent and other from European continent. In spite of clearance of regulation, the
companies faced a big hurdle in integration of culture, retaining the top performing employees,
decision making etc. There is issue in proper structure and communication. This has led to
increase in conflicting values. The report discusses these conflicting values during integration.
There are many like anxiety, social identity, role conflicting, fairness etc. It also highlights the
processes involved during integration such as leadership structure, cultural discrepancies,
defining vision and mission, benchmarking and measurement, resolving key issues etc. The
report also highlights different ways to manage conflicting values like there should be proper
decision making process. It is also necessary to give culture due diligence. In the later section of
the report, the function of top leaders and HR executives are determined to set things in place.
The major functionalities of any leader involve planning, organizing, leading and controlling.

TMH0805_CONTEMPORARY MANAGEMENT
Table of Contents
Introduction.................................................................................................................................................4
Conflicting Values......................................................................................................................................4
Integration Process of Staff and structure........................................................................................5
Resolving conflicting values...................................................................................................................8
Recommendations to work out details of integration in regard to top structure..............9
Importance of management and organizational theories and practices:..........................10
Summary and conclusion.....................................................................................................................11
References:.................................................................................................................................................13

TMH0805_CONTEMPORARY MANAGEMENT
Introduction
The case “Who Goes, Who stays” reflects the issues executives face during mergers.
There is merger announcement between Biohealth Labs of US and DeWaal Pharmaceuticals of
Netherlands. Both companies make and sold wide range of drugs. The merger will help in
reaping the benefit of economies of scale, leveraging distribution network. But the main obstacle
is bringing two different cultures together quickly and efficiently as possible. The senior
managers of both companies are looking from their cultural perspectives which hamper the
integration of companies (Ang & Van Dyne, 2015). Also the share price of the company is
dipped. Employees are confused and there is high attrition.
Conflicting Values
The conflicting values that are at stake fairness, synergy, and shareholders’ profit
maximization, goodwill, future goals, product improvement, Human capital management and
decision making etc. (Bolden, 2016). Following theories explain the conflicting values at merger:
Anxiety Theory: This occurs when human resources have uncertainty about job. It has negative
impact on the individuals which results in high attrition rate (Cartwright & Cooper, 2014).
Social Identity Theory: In this case study two cultures Dutch and US are integrating. This will
lead to loss of old identities .So it is necessary that the employees are convinced that they will
have advantages in the long run. There is sense of loss, grief, denial and refusal of change. There
is conflict during interaction with other organization’s members (Rahim, 2017).

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Role Conflict Theory: It states the conflicting and ambiguous roles. In this case role of both
Steve and Kasper was confusing. The leading members have not properly defined the
responsibilities which have led to confusion in the minds of employees. It is seen that Kasper has
upper hand in the decision making which may lead to future conflicts in the organization. This
may lead to low job satisfaction and low productivity.
Job Characteristic Theory: It is change in job environment post Mergers and Acquisitions. In this
scenario, there are 120 people on two continents for about 65 senior level jobs. It is necessary to
have efficient decision making to select top management. Poor decision has long term impact.
Organization Justice Theory: It signifies perceived fair treatment to the left employees. In this
case Alison, director of BioHealth’s marketing and sales. Acquisition and mergers can transform
systems, processes, structures and cultures of both companies (Harper, 2015).
Acculturation theory: There is difficulty in adjusting to different culture. One belongs to
American culture and other belongs to European culture. This does not create only people issues
but if limits are not defined on time than it might have negative impact on the vision and mission
of merged organization (Knies & Leisink, 2014). It is necessary to foster cultural due diligence,
facilitating intercultural learning, promote multiculturalism. It will help in resolving inter
organizational conflict and tension.
Employees are the asset to the organizations and they should be considered before taking
decisions on mergers.

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Integration Process of Staff and structure
Organizations are open systems. They need appropriate management to satisfy needs and
adapt to environmental circumstances. Generally management tries to achieve alignments and
good fits. One of the most important variables in integrating two organizations is situations’
favorableness (Graebner & Vaara, 2017). There is significant mutual trust, confidence and
respect between the subordinates and leaders. It is generally respected and accepted by followers.
The tasks are clearly defined and structured. There is formal authority. There is rational decision
making which means select the alternative which results in most preferred set of all the
consequences. The organizations generally try to determine and specify in detail its goals,
objectives, ends, means and values. The entire decision process is generally based on right
information being available to right people at the right times. There must be a business process
which is structured, rigorous (Melchers & Beck, 2018).
The entire integration process includes the following:
Leadership Structure: The structure of the company is defined and clearly presented. This
includes selecting top management executives to be retained. There is integration timeline, unity
and agreement on issues and key topics (Hoffman & Tadelis, 2018). In the current scenario,
Steve is struck with determining the official heads. Moreover, CEO considers the issue is not
important and mistake can be corrected later.
Cultural Discrepancies, Analysis and Solution: Extensive research is generally done to
understand the cultural differences within each organization. There are cultural strengths and
weaknesses of organizations. The common grounds are laid down to build the cultural
differences (Moran & Moran, 2014). The social media is used to build consensus such as share

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point to bridge the gap. In the current scenario, employees from both ends are reluctant to cross
the ocean and shift (Arslan & Simsir, 2016). Neither people from New York want to shift to
Europe, nor are European employees comfortable in changing their location.
Set up communication council: During Integration, companies has key functional leaders to do
the necessary communication. The talking points are made transparent, honest and motivating
regarding payoffs, expectation for future and timetables. The companies engage change
management professionals who help in building necessary architecture. The new
behaviors/attitudes are required for successful merger to take place.
Define the new culture: It is necessary to unify both cultures in order to build a common
platform for employees. There are some standard rules which are followed by all MNCs .These
rules helps in reducing cultural discrepancies. Rewrite the new cultural manifesto, how it came
together and leads to future success.
Vision, Mission and Values: The new culture is eliminated by determining the vision, mission
and values. Seek out opinions, provide feedback and report progress at all level.
Cultural Communication plan: Senior executives are generally given this responsibility.
Communication is not something to be given to low level functional authorities. A proper
systematic, tactical and sequential plan is laid down to set timeline. The new technological
innovations are communicated regularly and frequently.
Measurement and Benchmarking: It is necessary to understand the progress of merger or
integration over time. It is necessary to evaluate the success of the organization and report the

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findings through regular communication at all levels in the organizations (Hambrick & Gupta,
2015).
Resolve Key issues: It is necessary to understand the people issues during integrations and select
the best alternative which will maximize the shareholder value and keep the spirit of company
alive. There should be proper processes laid down for this.
Resolving conflicting values
The following ways can be used to resolve conflicting values:
Focus on tangibles and measurable: There should not be soft, vague and poor definition of
conflicting values (Liu & Spector, 2018). Instead, executives discuss issues that are well defined,
specific and supported by specific examples to achieve the business results. This should be
enhanced by interventions and analysis to increase measurable collaborations. In the current
scenario, it is necessary not to avoid the low morale of the employees, stock market values.
There is proper Evidence Based Management to decide the future of plant and employees
working over there. Steve is taking pain but he needs to make sure that results are delivered on
time. The human asset is getting impacted. Make culture an important component of change
management.
Consider the strengths of existing cultures and not weaknesses: It is necessary to make the “best”
of each company’s culture and merge them. It means to retain separate core capabilities of both
organizations. For example, employees’ assessment of both cultures can be integrated. This will
help in evaluating who go and who stay. There should be relationship management between
business results and cultural assumptions.

TMH0805_CONTEMPORARY MANAGEMENT
Implement a decision making process that is not hampered by value differences: The decision
making process should involve defining the problem, identifying limiting factors, developing
potential alternatives, analyze the alternatives, select the best alternatives, implement the
decision ,establish control and evaluation system. Leaders of the related companies might face
the situation where they need to take a decision quickly. There could be varying decision making
styles of two different companies. So a proper decision making process should be incorporated
which acts as win-win situation for both organization and their shareholders
Design new organization model: When there is business critical integration points and short time,
it is necessary to focus on the flow of work (Bolman & Deal, 2017). It is necessary that
information in the network should be shared effectively. The interface must be designed in a way
that adds business value. If the employees personal goals are achieved than the mutual trust and
respect can be built among employees who have not worked together prior.
Recommendations to work out details of integration in regard to top structure
A proper management approach is needed to work out details of integration in regard to
top structure. The four managerial functions i.e. planning, organizing, leading and controlling of
human and other resources to achieve the successful integration (Mahoney & Godfrey, 2014).
The top level executives and HRs are responsible to supervise the decision to meet the company
goals.
Planning: The executives and HRs must choose the right goals to pursue. Then it is their
responsibility to effectively use the resources to achieve these goals. In the current integration, it
is necessary to define the competencies of both organizations and top executives. The emphasis

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should be given on business success, decisiveness and communication and relationship skills.
Before every meeting with the counterpart it is necessary to define certain acceptance points.
Organizing: It is necessary to come out with mechanism which evaluate the executives in a way
that is transparent .There should be fair mechanism which allow each employee to present their
credentials and demonstrate their competencies. All executives should be measured against the
peer outside the company. External consultants can be used to get valuable insight for HR
integration, in-depth interview, structured interviews and feedback. The evaluation of top
executives should be considered as part of due diligence. There should be alternative jobs for
employees who have to exclude from the top 65.
Leading: Executives must be notified with proper communication process. Employees who are
vital for the success of the organization must be reassured. It is necessary to boost the employees
who are trying to become defectors. There should be excellent communication by the top leaders
Controlling: It is necessary the top management is put in place soon and process of meeting with
them should be started. It is necessary that entire team should work together on delivering the
key result of merger. The benefits of merger were delivered as promised to shareholders. The
entire organization must follow the defined suit to achieve desirable results. The people must
come together quickly and find effective ways to run the organization better. All the crucial
elements of the merger should be given proper concentration.
Importance of management and organizational theories and practices:
Strategic Planning: The theories and management practices helps to monitor the nature and
changing character of forces. These help in doing strategic planning and execution which is fair

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and robust (Hill & Schilling, 2014). The major forces which lead to instability are technologies,
regulation, culture and business needs (Green, 2016).
Defining roles and responsibilities: There is very fine line between who is responsible for what
(Mullins & Schoar, 2016). So these theories and management practices defines the roles and
responsibilities from low level executives to the top leaders. It is mentioned in the case study hat
Steve has spent time on approvals .Instead, he should be involved in communicating with the
employees and planning the methods to retain the top performers.
Organization Management: The theories help in leading the employees in the organization.
Executives use mixed management theories in daily activities to manage organizations more
effectively. These theories are necessary to attain the organizational goals. They are vital in the
management of the organizations. Management theories are relevant for the modern management
practices
Globally Accepted: The management theories are accepted globally. During mergers if these
theories are followed then cultural discrepancy can be reduced. Decision making and other
specific actions become easy to take. There is regularity in the system. The situations of
uncertainty, ambiguity can be resolved properly. There is better alignment of technology,
processes, structure and people.
Summary and conclusion
It can be concluded from the report that there could be multiple reasons for failure of
integration. One of the reasons is cultural values conflict. It is necessary that every aspect of
merger should be taken into account by the key leaders. In order to have fair play third party

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consultancy could be involved to bring the two companies at par. In order to reap Economies of
scale or economies of scope proper management theories should be applied to achieve desired
result. Also there should be proper structure and reason for every decision. Haphazard decision
may not lead to long term results.

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Ang, S., & Van Dyne, L. (2015). Handbook of cultural intelligence. Routledge.
Arslan, H. B., & Simsir, S. A. (2016). Measuring takeover premiums in cross-border mergers
and acquisitions: Insights from Turkey. Emerging Markets Finance and Trade, 52(1),
188-203.
Bolden, R. (2016). Leadership, management and organisational development. In Gower
handbook of leadership and management development (pp. 143-158). Routledge.
Bolman, L. G., & Deal, T. E. (2017). Reframing organizations: Artistry, choice, and leadership.
John Wiley & Sons.
Cartwright, S., & Cooper, C. L. (2014). Mergers and acquisitions: The human factor.
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Graebner, M. E., Heimeriks, K. H., Huy, Q. N., & Vaara, E. (2017). The process of postmerger
integration: A review and agenda for future research. Academy of Management
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Green, M. B. (2016). Mergers and Acquisitions. International Encyclopedia of Geography:
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Hambrick, D. C., Humphrey, S. E., & Gupta, A. (2015). Structural interdependence within top
management teams: A key moderator of upper echelons predictions. Strategic
Management Journal, 36(3), 449-461.
Harper, C. (2015). Organizations: Structures, processes and outcomes. Routledge.

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Hill, C. W., Jones, G. R., & Schilling, M. A. (2014). Strategic management: theory: an integrated
approach. Cengage Learning.
Hoffman, M., & Tadelis, S. (2018). People Management Skills, Employee Attrition, and
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Research.
Knies, E., & Leisink, P. (2014). Linking people management and extra‐role behaviour: results of
a longitudinal study. Human Resource Management Journal, 24(1), 57-76.
Liu, C., Nauta, M. M., Yang, L. Q., & Spector, P. E. (2018). How Do Coworkers “Make the
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United States. Applied Psychology, 67(1), 30-60.
Mahoney, J. T., & Godfrey, P. (2014). The Functions of the Executive at 75: An Invitation to
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Melchers, R. E., & Beck, A. T. (2018). Structural reliability analysis and prediction. John Wiley
& Sons.
Moran, R. T., Abramson, N. R., & Moran, S. V. (2014). Managing cultural differences.
Routledge.
Mullins, W., & Schoar, A. (2016). How do CEOs see their roles? Management philosophies and
styles in family and non-family firms. Journal of Financial Economics, 119(1), 24-43.
Rahim, M. A. (2017). Managing conflict in organizations. Routledge.