DeWaalBioHealth Merger: Conflict Resolution and Integration Strategies

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CONTEMPORARY MANAGEMENT
ASSESSMENT ITEM 2

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Table of Contents
Introduction......................................................................................................................................3
Assessment item 2...........................................................................................................................4
1. Conflict values and integration problems in mergers and acquisitions.......................................4
2. The details of integration and relevant management theories.....................................................6
3. Recommendations for conflict values be resolved....................................................................8
3. Process recommendations for the senior level executives and their HR people for integration
.......................................................................................................................................................10
5. Evaluation of the usefulness of management & organizational theories...................................11
Conclusion.....................................................................................................................................12
References......................................................................................................................................13

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Introduction
This report explains the conflict values and integration issues related to mergers and acquisition
with the company. In this report, two big drugmakers company were about to merge, but without
proper management and planning, so things were not going well. The importance of management
theories during the time of the merger will be explained. The recommendations for solving those
conflicts and process of effective integration will be discussed in this report as well.

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Assessment item 2
1. Conflict values and integration problems in mergers and acquisitions
The two big companies were about to merge and start a new company. The merger could never
be an easy process for companies and especially for large companies which have different
working cultural and much senior and junior level management as well. Things would be tough
for the administration from both companies who were involved in the merging and managing the
stuff during the merge. There were some value conflicts were found according to the case study;
those were the following:
 No mutual understanding – Since both, the companies decide and agree for the merger,
the top level management was trying hard to solve the differences into knowledge and
make some mutual decision. They both want to make decisions which will be suitable for
the company which they are planning to start soon. Both parties wish to their people in
the management team of the new company. They have some understanding issues as well
so that they are not trying to understand the differences with each other company and
take the initiative to stop being very bossy to each other when it comes to making
decisions.
 The cultural difference – It would be considered as one of the most prime issues of the
companies' merger because they have different working cultures in their companies and
have their star performers according to that working cultural also. It would be difficult for
them to work in a different environment that made the situation more critical in the time
of the merger. According to intercultural management theory, it is easily understandable
that cultural differences could make a big reason for the failure at the time of the merger
of two culturally difference companies.
 No belief – Since the news about the merge of the company spread all over. The
management or higher authorities has not been decided yet for the new company. The
company's employees started losing their faith and belief in the company because there
was no assurance about that they will go to have their spot in the new organization or not.

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Thus, make them thinking about finding a new job, and few of them left the company,
and a few more were planning to go to the company very soon. According to the system
management theory, employees play an essential role in the successful merger of the
companies (Pelley et al., 2015).
The following are the integration problems which companies identified during the time of merge:
 Ill-conceived HR strategy – Both the companies' management did not plan for any
specific approach to maintain their human resources stay with the company because both
companies have, but they did lose their hopes with the merge and left the companies.
 No proper planning for merge – Both companies should try to do an appropriate plan
for the merger because both are large scale companies and not being able to wrap up
everything. Effective management starts with effective planning and execution of that
planning as well.
 Slow decision-making process – The decision-making process prolonged during the
merge phase from both the companies and they both don't have such compromising
attitude which required to make a merge successful. They did not have any mutual
understanding and which leads them to slow decisions making the process.

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2. The details of integration and relevant management theories
The issues which develop during the merger or integration process between two organizations
with relevant management theory are given below:
 Leadership related issues: The integration between the DeWaal Pharmaceuticals and
BioHealth Labs leads to the outcome of leadership issues between the CEO Steve Lindell
and chairmanKaspar van de Velde as both CEO of DeWaalPharamaceuticals and
chairman of BioHealth Labs has the urge within them to become the leader of the new
mega-company DeWaalBioHealth. This issue emerged from the integration of the two
company is related to the contingency management theory as this theory includes the
concept of leadership of organizations. The leadership issues directly affect the
functioning and development of the new emerging company in the market as if the
administration would be defective then the working of the employees would be miserable
along with the poor performance of the new company in the market. (Strauss, et al.,
2018.)
 Culture-based issues: The integration of two companies to establish and introduce a new
mega-company in the market faces the problems related to the different culture of the two
companies. The cultural differences among the two companies hold back the active
development of the new mega-company in the market. The CEO of the de Waal
Pharmaceuticals wants to keep their staff at the top management while the chairman of
BioHealth Labs wants to protect their staff in Indonesia. Both the companies avoided
rising above the cultural differences of the company to promote equity within the new
company which may lead a corporate culture of the companies and potential performance
of the new company in the competitive market. This issue is generally related to the
system management theory as this theory consists of a management system of
organizations, interrelations and interdependence of the organizations. (Brahm, et al.,
2016)
 Selection issues: The development of the new company needs potential, and productive
employees and these employees are hired when the merged companies carry out the

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process of selection of candidates. The combined companies further face issues related to
the collection of candidates as both the companies DeWaal Pharmaceuticals and
BioHealth Labs wanted their staff to be at the senior management position in the new
company. The emergence of this selection issue develops a conflict between the two
companies and becomes a barrier to the development of the new company. This selection
issue is related to the scientific management theory as the scientific management theory
deals with the scientific management of employees, employees work performance and
how a business must be conducted. The scientific management theory provides
appropriate methods to deal with management and marketing leading the process of an
organization. (Cicmil, et al., 2018.)
 Communication Issues: The merged companies face the problem related to the
communication process while building a new executive team for the new mega-company.
As for the development of a new company in the market the communication of both the
leaders of the two companies must appropriate to influence the newly hired employees.
The communication issues that the merged companies face include an unsatisfied
description of the new company policies and working process, inadequate explanation
about the salary and bonus, etc. The CEO of DeWaal Pharmaceuticals, Steve lacks
efficient communication with the people or while building the executive team of the new
mega-company DeWaalBioHealth which leads the whole company to face the
communication issues. The communication issues are related to the Neo-human relation
management theory. The Neo human relation management theory is related to human
motivation such as stay pay, incentives, satisfaction, etc. (Midler et al., 2016)
 Strategy Building Issues: The merged companies also face the issues related to building
appropriate strategies for developing the new company along with improving their
existing company. The CEO of DeWaal Pharmaceuticals aims to create a plan of closing
down the Dewaal plant in Indonesia and to keep the BioHealth plant in Shanghai. The
program also includes to the new opening of DeWaal plant in China and India while the
chairman of BioHealthwas of the opinion of keep running the Indonesia plant and that by
who would be running the different plants. These issues among the two companies lead
to delay in the building the strategy for the developing new company. This strategy
building issue is related to classical management theory as this theory consists of

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operation process, production process and guidance for management of decision-related
to the development of companies. (Engert, et al., 2016)

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3. Recommendations for conflict values be resolved
It is well-known that the merger is not an easy process to be completed. It often leads
complications from both ends. There were many factors which can create conflicts values during
the process, but if companies pay some attention to the issues and plan for their effective conflict
solutions, it would be helpful to make them solve and gives success to the merge which planned.
The following are the few recommendations for the merge which both companies were about to
go:
 Engage in relation building – Steve and Kasper are two top-level representatives of the
company, and according to the case study, they both did not have much mutual and clear
understanding of upcoming things. For making the merge successful, it would be required
to be engaging in building the relationship with each other.
 Open communications – Communication is the key to make things successful. Some of
the management levels persons left the job because of that uncertain situation after
merging, if management pays attention that they need to inform about the ongoing
activities for the merge. Open communication would be helpful to make the staff calm
and stay with the company for the future.
 Effective human resources management – Both the companies were large scale and
had many employees working for them. There was a complicated and confusing situation
for the employees from both the companies. Therefore, some employees were left even
before the things were finalized. An effective human resources management could help
both the companies in that situation very well. Employees are the essential pillars, and
without them, merging things could be successfully implemented.
 More focused planning – Kasper and Steve both claimed according to the case study
that they were focused, but it didn't seem into their communication, planning and
decisions as well. Two big companies merger is not, but it is not impossible though. The
focused plan would be helpful to the companies
 Focus on achieving performance goals – Both the representative should focus on
making the goals and objectives of the new company which is the merged company, a
new venture for both of them. A proper set of performance goals helps them to become

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more explicit about the roles and responsibilities of the management and employees as
well, and it would be helpful to achieve success for the newly merged company.
 Finalization of new management fast – Their completion of modern management for
the company was prolonged going process that makes the process more slow and unclear
which creates complications so far. If they can decide a management team faster for the
company, it would be easy for them to make the whole process quickly.
 Mutual understanding – Steve and Kasper both need to understand the importance of
mutual understanding for making the merging process successful. Having different
opinions is not a problem but not able to mutually agreeing on the important decision
could be problematic for the future. Mutual understanding plays a vital role in the
successful mergers, and both companies should involve that in their process (Lebeinch et
al., 2018).

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3. Process recommendations for the senior level executives and their HR people for
integration
 Align leadership across all the teams – high-level executives and their HR should focus
on the aligning leadership across all the associated teams so that all the team members
from different groups will be informed and guided for completing their tasks at the time
of merging to other organizations. It would be helpful to build up faith and belief in the
organization and its policy.
 Effective team management – It is primarily considered to be related to the team leaders
and human resources people job to settle down all the issues associated with the
teammates because solving their issues can reduce many other problems in different
upcoming levels of the process of mergers. It will be helpful for the company to make the
good employees stay with the company for a longer run and team leaders can help them
to provide some guidance (if required any) (Radha et al., 2013).
 Make the right people available right time – It is HR manager responsibility to make
the right people available on the right time for the company so during the merging
company can easily avoid unexpected issues for the future. Lack of good team could be
one reason which leads to merging failure in future.
 Proper planning – senior-level executives should do some proper planning for the
company for best responding at the time of joining with other organizations. Adequate
planning and its executions can only help to avoid unexpected failures.
 Make quick decisions – Senior level management should complete all the required
preparations on time which would be helpful to them to make smart decisions that make
them quickly respond to the situations and take advantages of the jobs fast.
 Role and responsibilities – Senior management should be aware of the importance of
the effective distribution of roles and responsibilities in the team to achieve success
especially when an organization is merging with other organization which is culturally
very different from each other. It makes the process smooth.

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5. Evaluation of the usefulness of management & organizational theories
Management theories are a set of rules and regulations which are helpful to guide the managers
to manage the organizations. These theories will be beneficial to apply effective management
during the merging time of the company. Organizational methods include those consists of
approaches which help analyze the structure and manage them to achieve organizational goals
and meet their targets as well. The following are the theories of management and usefulness:
 Method of scientific management – This theory is one of the most effective
management theories among all others. It believes that only one thing which can make
people motivate for increasing their productivity is 'Money'. It helps to understand that
Steve was using the bonus and incentives process for encouraging employees
productivity.
 Organizational management theory – This theory includes 14 principles of
management and which helps to understand the importance of roles/responsibility
division to achieve better results.
 Behavioural management theory – This theory helps to identify the importance of
giving importance to the employees and personally address them about their issues. It
helps to understand that it only increases their productivity but also increase the
company's profitability. If senior level management were able to communicate to
employees openly, there were chances that the company would not lose many of its
valuable employees.
 Contingency management theory – This theory helps to identify the importance of the
role of a leader in the organization, especially in difficult times. Steve was utterly a
failure that time because employees were losing faith in the company and only a good
leader can manage a good team and act accordingly to encourage them to increase their
productivity and have faith in the company even if it's difficult (Angus & CF, 2014).