The document provides a summary of issues, recommendations, risks, and contingencies for integrating the cultures and human resource management (HRM) policies between Treelin (American) and Toivonen (Finnish) following an acquisition. Key issues include constraints due to industry/facility, integrating cultures with different practices, and developing new integrated HRM policies. Recommendations include new machinery, long-term contracts, cross-cultural training, a unified promotion structure, and integrating compensation/benefits. Risks include costs of changes and management resistance. Successful integration requires implementing recommendations in stages while assessing new strategies and policies.

1. HNC Consultants
Bilal, Jagdeep, Jennifer, Max, Reena, & Sarah

2. Agenda
1 Issues
2 Recommendations
3 Risks and Contingencies
4 Conclusion
5 Q&A

3. Issue #1: Constraints due to the Industry and
Treelin’s Facility
Concerns
1. High fixed costs
2. Periods of overcapacity
3. Inconsistent product demand
4. Volatile raw material prices

4. Recommendations
For Constraints
1. Replace old machines
• New machines = increase in efficiency
2. Secure long-term contract
• With suppliers & customers
3. Conduct market research

5. Risks & Contingencies
Unable to • Company currently does not
have contract.
secure • Tap into other segments
contracts through market research
High Costs • Short-term costs, but long-
term benefits because
for machines more efficient
machinery

6. The Stages of an International
Acquisition
Stage 1 Stage 2 Stage 3
• Searching & Selecting • Creating new • Assessing the new
a partner structures, strategies, strategies, structures
• Planning for managing and leadership & culture
the process of • Motivate and manage • Assessing the new
acquisition employees HRM policies and
practices

7. Issue #2: Culture Integration
Between Finland and USA
Toivonen (Finnish) Treelin (American)
Uncertainty Avoidance Tends to avoid risks. Innovation Uncertainty accepting. Tolerant
may be resisted, need for rules of ideas or opinions from
anyone
Masculine/ Feminine Emphasis on employees sense Raises based on individual
of belonging; hiring and work performance appraisals
done through groups
Individualism/ Collectivism Focus on group-level Hired based on skills; raises
outcomes; do not conduct based on individual
performance appraisals performance appraisals
Time Orientation Rewards allocated on an annual Rewards allocated on an annual
basis & quarterly basis
Power Distance 1 level of supervision between 2 levels of supervision between
floor workers and executives floor workers and executives
Your own footer Your Logo

8. Recommendations
For Culture Integration
1. Cross-Cultural Training for employees and
management of Treelin
– Provide outsourced training
2. Management training regarding change in autonomy
– Ms. Kempainen will work with management to help adjust them
to communicating with corporate headquarters
• Will oversee operations and report to corporate headquarters until
management is accustomed with the way Toivonen operates

9. Risks & Contingencies
• Short-term costs, but long-term
benefits because it improves
High Costs cultural sensitivity
• Ensure ongoing communication
Management • Reward with positive feedback
and business incentive for
resistance compliance

10. The Stages of an International
Acquisition
Stage 1 Stage 2 Stage 3
• Searching & Selecting • Creating new • Assessing the new
a partner structures, strategies, strategies, structures
• Planning for managing and leadership & culture
the process of • Motivate and manage • Assessing the new
acquisition employees HRM policies and
practices

11. Issue #3: New HRM Policies
• Integration and combination are essential for a
successful acquisition
• The acquisition process needs to be systematic
and incorporate the specific strengths and
weaknesses of Treelin
• Close examination of the both company’s
policies and processes resulted in a creation of
new processes for Treelin

12. Recommendation
Integrating the Hiring Process
•Hiring done by supervisors
Treelin’s Hiring • Based on skill requirements for the entry-level job
Structure
• Some consideration for future growth
• Hired by work group
Toivonen’s Hiring • Hired based on willingness to learn
Structure • Focus on “social fit”
• Hiring is done by supervisors, using structured interviews
New Integrated • Hiring will be based on: skills AND a willingness to learn plus an
Promotion
internal need to constantly improve
Structure

13. Recommendation
Integrating the Training & Development
Process
•Focus on improving individual performance
Treelin’s Training • Maintaining a core group of employees who could keep the mill
& Development
Structure
running at highest level of efficiency
• Training & Development tailored to the needs of individual
Toivonen’s employees and the needs of the organization
Training & • Quality online training on topics important to the firm
Development
Structure
•Online, user friendly training based on company and individual
New Integrated needs
Training &
• Secondary focus on increasing efficiency and promoting growth
Development
within the company
Structure

14. Recommendation
Integrating the Promotion Process
•Promotions are generally done from within the organization,
Treelin’s although frequently there was a lack of qualified internal candidates
Promotion
Structure
•No given promotion policies and procedures
Toivonen’s
Promotion
Structure
•Promotion from employee to management will be based on a
New Integrated succession management chart
Promotion
Structure

15. Recommendation
Integrating the Compensation Structure
•Pay for new hires was determined by market surveys of paper production
Treelin’s in the region
Compensation • Pay raises given based on annual individual performance
Structure • Management received bonuses based on plant production, with no
regard for financial performance of the parent firm
• Ratio of 1:7 from the lowest paid worker to the highest paid worker
Toivonen’s • Centralized compensation system that includes a global job evaluation
Compensation with salary ranges determined by continent
Structure • Management bonuses based on both individual performance and overall
corporate performance
• Pay for new hires will remain the same, as well as their pay raises
New Integrated • Introduce a profit sharing plan based on overall performance of Treelin
Compensation
Structure

16. Recommendation
Integrating the Bonus Structure
•Management received bonuses based on plant production, with no
Treelin’s Bonus regard for financial performance of the parent firm
Structure
• Management bonuses based on both individual performance and
Toivonen’s Bonus overall corporate performance
Structure
• Using Toivonen’s bonus structure
New Integrated
Bonus
Structure

17. Recommendation
Integrating the Benefits Structure
• Standard for the industry
Treelin’s Benefits • 35%-40% of the payroll was spent on benefits including health care
Structure insurance, a 401k plan, STD and LTD plans, paid vacation time,
dental insurance and the provision of safety apparel at no charge to
the employees
•Unlimited sick time
Toivonen’s • Employee Assistance Program (EAP)
Benefits Structure • Flextime for all employees
• Using Treelin’s Benefits structure and include EAP
New Integrated • Offer employees flextime to help meet their personal commitments
Benefits
Structure

18. Recommendation
Integrating the Communication Structure
• No formal communication structure
Treelin’s
Communication
Structure
• Use of communication tools for all employees
• Email anonymous questions to their managers and questions were
Toivonen’s answered on the Intranet web-page
Communication • Communication guru: one layer of supervision between floor workers and
Structure
top management. Guru insured good communication within the teams and
between the levels
• Implementing the Intranet and personal Emails
New Integrated
Communication
Structure

19. Implementation Process
Risks and Contingencies
Implement succession management
Begin Training for new machinery
Implement the policies
Get employees on board
Get management on board

20. The Stages of an International
Acquisition
Stage 1 Stage 2 Stage 3
• Searching & Selecting • Creating new • Assessing the new
a partner structures, strategies, strategies, structures
• Planning for managing and leadership & culture
the process of • Motivate and manage • Assessing the new
acquisition employees HRM policies and
practices

21. Issue #4: Assessing the New
Changes within Treelin
• Measure efficiency of new machines
– Profits made
• Productivity rates
– Training and development programs
• Retention and Turnover Rates
– Modified HR policies
– Employee satisfaction regarding changes

22. Questions?