Management Report: Addressing Management Challenges in M&A Scenarios

This report examines the management challenges faced during mergers and acquisitions (M&A), focusing on a case study involving two companies, DeWaal and BioHealth. The analysis identifies key issues such as conflicting values between leadership, lack of planning, and ineffective staffing processes. The report delves into the impact of these challenges on employee integration, organizational structure, and overall success of the M&A. It explores the importance of resolving conflicting interests, the functions of HR executives, and the usefulness of management theories in addressing these issues. The report recommends strategies for effective communication, team management, and the implementation of modern management practices to ensure a smooth transition and successful integration of the merged entities. The study emphasizes the need for a well-defined organizational structure, proper staffing procedures, and a focus on employee well-being to mitigate the risks associated with M&A and achieve long-term success. The report concludes by highlighting the critical role of leadership in navigating the complexities of M&A and fostering a positive work environment.

Running head: MANAGEMENT
Management
Name of the Student:
Name of the University:
Author’s Note:

Executive summary
Merger and Acquisition is one of the common and useful steps being undertaken by the
organizations in this modern day scenario. Mergers and acquisitions usually help in forming one
powerful company that works with the amalgamated expertise of both the firms. However, there
are many issues faced by the companies if they lack a well organized and planned organizational
structure. They have to hire experts externally who will be helping them to undertake an in-depth
analysis of the individual employee performance and set the structure for the newly made
merged company.

Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Conflicting values........................................................................................................................3
Lack of matching mentality.........................................................................................................3
Lack of planning..........................................................................................................................4
Staffing process............................................................................................................................4
Resolving Conflicting interests........................................................................................................6
HR Executives functions.................................................................................................................7
The usefulness of management........................................................................................................8
Conclusion.....................................................................................................................................10
References......................................................................................................................................11

Introduction
Merger and acquisition are considered to be one of the most essential kinds of business
set up in the modern day scenario. Many companies or organizations are trying to enter into a
joint venture or collaborative business ventures so that they can benefit from the resources and
the expertise of one another. However at the same time, it must be made sure that the business
owners are focusing over the planning and the organization of their merger so that they can move
forward in a step by step and time optimizing manner (Khorasani & Almasifard, 2017) This
report has mainly dealt with the two companies that are DeWaal and BioHealth, who are about to
enter into a merger and acquisition setup but they need to be much focused and over the
problems (Light, 2001).
Discussion
Conflicting values
Lack of matching mentality
It is evident from the given case study that there are sharp differences in the thinking
pattern of the two business owners. The very first difference is the selection of the business
meeting venue. As per the opinion of Ashkenas et al. (2015), one of the major issues faced in
any of the merger and acquisition is conflicting value and conflicting interest. Steve and Kaspar
belong from two different regions and thus it is normal for them to have a certain difference in
their mindset. As a result of this, they have to understand the differences and work for
overcoming the same. However it is evident that Kaspar chose one of the restaurants in New

York as their business meet venture while Steve wanted to stay in the office cafeterias itself.
Apart from this, there is a sharp difference seen in the attitude and the behavior of the two
managers. Steve realizes that their prior objective must be to focus on the important business
issue like staffing, employee structuring whereas Kaspar seems too reluctant. He is not really
concerned about speaking over these issues. The classical theory of management abides by the
view that compensation is the best way by which they can retain their employees. However it is
evident that the two managers have not really decided about the ways in which they can render
support to their employees.
Lack of planning
As per the opinion of Waring (2016), Bureaucratic management theory needs to be
implemented while structuring and restructuring the organization. However, Steve realizes that it
is important for him to keep some valuable employees like Alison in his business. However, he is
spending too much time in understanding the ways of Kaspar rather than acting with speed. Huda
et al. (2019) have stated that speed is one of the most important tools that the entrepreneurs have
to use in the speedy formation of the newly merged and acquired business venture (Tarba et al.,
2016). They were not having any rough sketch of their organizational structure or which
employees they needed and the ones that they wanted to dismiss. As per Weber, the bureaucratic
theory is of utmost importance as it not only helps on forming the organization structure but also
helps in checking the unchecked and unethical hierarchical bureaucracy that might often grow in
the business. Thus it is needed for both Steve and Kaspar to focus over the formation of at least
the top management so that they can aid in taking care of the issues arising the subordinate
layers.

Staffing process
Integration is one of the core elements of a successful M&A. As stated by Bal and De
Lange, (2015), a successful merger and acquisition cannot run properly unless there is proper
staffing created. The staffs or employees are the most valuable assets of the organizations and it
is the duty of the managers to take care of them. Particularly in case of a merger and acquisition
employees go through many difficulties. They are unable to understand “where they are going”
(Light, 2001). As is evident from the given case study, Alison one of the ablest and ideal
employee of BioHealth wanted to talk with the manner that is Steve regarding this new venture.
She was naturally confused and tensed regarding the organizational and structural changes that
would take place. She expected Steve to give her some assurance. However, the reply that was
given by Steve showed that he was not concerned about other things rather than getting
regulatory approval. The reply given by Steve was -“I can’t guarantee anything, but I want you
in this organization. Pick up the phone anytime you’re bothered, but don’t look for another job.
And come see me if you’re offered one (Light, 2001).”
It is evident from this speech that Steve was not focusing on top management staffing.
Alison was one of the best employees of Steve and was working as the head sales representative.
Steve knew that without her efforts it would not have been possible for him to survive in the
business (Ahmady, Mehrpour & Nikooravesh, 2016). He has to keep Alison in the top most
executive staff group. Thus it can be said that the bureaucratic theory is management is being
hindered in this aspect. Neither Steve nor Kaspar are ready with the methods of Staffing.
As stated by Granlund and Lukk (2017), the contingency theory of management must
be used in order to focus on integration. Contingency management theory abides by the belief
that using modern and upgraded scientific methods are always very helpful in working over the

communication system. This will help the organization in getting all the feedback and the
opinion of their employees before taking any final decision. Steve has forgotten that power is one
of the most crucial factors in M&A. He has to emphasize who is using power and how. Steve has
to immediately select some of the best management people and form the cores or the top
management level. This will reduce his workload as the top management officials will then be
able to take care of the employees working in the subordinate sectors. Thus the administrative
organizational theory must be used in this merger and acquisition venture (Thompson, 2017).
Steve and Kaspar have to focus on the proper staffing and structuring of the organization so that
they can easily carry on with their business (Tarba et al., 2016).
People issue is one of the most crucial aspects that must be taken care of while entering
into merger and acquisition ventures. People or the employees are surrounding with many
doubts, fears, and queries while their companies undertake some merging and acquisition
projects. They often suffer from their job security as well. Thus it is the duty of the managers to
assure them. In order to give this assurance, the managers have to undertake an in-depth
performance analysis. It is suggested that external experts' are hired who will help in carrying on
the staffing process in a fast and unbiased manner (Neesham & Wolfram Cox, 2017). The
external experts will use tools like 360-degree feedback procedures (Karkoulian, Assaker &
Hallak, 2016). This will help the company to make a list of the employees that they have to keep
in their organization, the ones that will be shuffled and also those employees who have to be
dismissed. They will also have to focus over finishing the new and alternative employment
opportunities for those employees who will be dismissed from their current employment
(Brueller, Carmeli & Markman, 2018).

Resolving Conflicting interests
 It is recommended that Steve and Kaspar try to get over their cultural difference.
They have to understand that protecting their employees by not letting them face
challenges will be a foolish thing to do. They have to abide by the changing
situations. The modern theory of management must be used. The modern theory
considers the organization as an open system. This means an organization
consistently interacts with its environment, so as to sustain and grow in the
market.
 As they are about to operate in this 21st-century dynamic market they will have to
follow an open system. In other words, they will have to understand the benefits
of interacting with the employees before taking any crucial business decision
 It is recommended that Steve works over his communication skill. He will have to
focus on building effective communication. He will also have to focus on team
management. In order to get full support from his team he will have to support the
employees and assure them that no matter whatever is the situation, he will
always take care of the interests of his employees.
 Focusing on integration and staffing by using modern methods is of utmost
importance. They have to get rid of the old traditional methods. They have to
focus on the hiring of external employees who will be helping in carrying on the
employee appraisals in a time optimizing and less expensive manner. This will
reduce the work pressure over Steve and he can look after the other affairs of the
organization.

HR Executives functions
 It is recommended that the two senior executives focus on the integration and staffing of
their organization by using modern methods.
 Steve has to form the top management level so that he can reduce some workload from
his shoulders. At the same time if he is finding it difficult to talk and communicate with
so many employees at the same time, then he will be helped by the top management level
employees. Thus forming the organizational structure is of utmost importance.
 Steve has to realize that Kaspar needs to be corrected on his attitude and behavior. A
major lacking that is seen in Steve is speed and communication. However, Steve has
better farsightedness and long term thought about the M&A project. He must stop
wasting time in just understanding the ways of Kaspar. Steve has to work at a faster pace.
He is moving very slowly and in this way, be will never be able to run his new venture in
a successful manner.
 It is also recommended that the two executives work for not only forming the top
management but also arranging for cross cultural competency program. They have to
separate their culture of a candidate from their own. They need to embrace the cultural
difference rather than misjudging employees just for their separate cultural orientation.
Usefulness of management
The administrative organization theory must be of great use for this organization as they
will be able to utilize the modern administrative methods by getting rid of the age old rigid
methods. Rather than only focusing over the ways in which the efficiency of employees will be
increased the managers have to think over then organizational structure. Granlund and Lukka, K.
(2017) have stated that in order to survive in the long run the managers have to focus over

staffing. It is evident that the managers of both companies that is DeWaal and BioHealth will
have to focus on integration and staffing in order to carry on with their M&A. Forming the
organizational structure will help them to carry on with the work in a very easy and less time-
consuming manner. They will be able to form the top level management which in turn will help
them to focus over any kinds of issues arising in the subordinate levels. This theory will help the
organization to follow the top down approach (Reilly & Williams, 2016). The current position of
the DeWaal and BioHealth M&A proves that they are suffering from a properly planned and
well-organized structure. Thus they have to focus on increasing the efficiency of the
management before emphasizing on the individual efficiency of the employees.
The modern theory of management is useful as this will help the two executives to
develop an open approach. In particular, Steve will have to focus on making himself more
approachable and open while discussing the business affairs with his employees. He will have to
prepare all the data points and focus on matters that are more prior. For example, he will have to
communicate with his employees like Alison in an open and free manner. He must be able to
follow the dynamic and probabilistic approach. This will help him to give a clue about the
upcoming uncertainties to his employees and will also help him to assure that no matter,
whatever happens, he will be there to take care of the interests of his employees.
The bureaucratic theory will be useful for this merger and acquisition project as this
will help the two executives to deal with their staffing and integration issue. According to Max
Weber, the bureaucratic organization is the most rational means to exercise vital control over
individual workers.They will have to work over the formation of the rules, regulations, and
principles in such a way that they can establish a proper hierarchical structure in their
organization. The promotions or the appraisals of each employee will take place mainly on the

basis of the merit and the handwork that is being put forward by the employees. Thus hiring the
experts’ from outside will help them to conduct the employee appraisal procedure in a very
unbiased and error free manner.
Conclusion
Thus on a concluding note, it can be said that both the two companies DeWaal and
BioHealth have the capability of becoming a successful merged company. However, they need to
work over their planning and organizational skills. Hiring experts from outside will help them in
focusing on the unbiased and proper team formation. They will be able to reassure employees
about the constant support from the end of management.

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