Hridai's presentation on Mergers and Acquisition. We've tried to explain the issues and management in Human Resources for Mergers and Executions in corporate. Hope it proves useful to you. Feedback is always appreciated.

1. HR ISSUES IN POST M&A
SCENARIO
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2. Introduction
M&As are strategic alliances. Mergers and
acquisitions(M&A) have become common in
today‟s global marketplace, and the last
decade has seen no shortage of them.The
period of mergers and acquisitions is continuing
as a strategic driver for market dominance,
geographical expansion, leverage in resource
and capability acquisition, competence,
adjusting to competition.
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3. Definition
“Mergers and Acquisitions (M&A) is often used as an
interchangeable term. Mergers refer to deals where two or
more companies take virtually equal stakes in each other‟s
businesses, whereas an acquisition is the straightforward
purchase of a “target” company.”
Quite literally –
M&A= Marriage (Swayamvar)
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4. Merger by two companies or an acquisition of one
company by another inevitably brings change to both
companies. No matter the size or make-up, in mergers
and acquisitions, change has the ability to shake a
company to its foundations.
Current M&A scene can be described in one word -
'robust'.
People issues like staffing decision, organizational
design etc., are most sensitive issues in case of
M&A negotiations.
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5. Stages of M&A
a) Run – up or Pre M&A- Strategic & Legal
b) Immediate Transition (first 100 days or 6 months) –
Appointment of Board of Directors, Formation of
Different Teams and Effective hand over
Our discussions in this case will be relating to
HR issues in post – M&A scenario
„The Integration‟
c) The Integration (Long-term coming together of the
two parties) - Companies involved in the merger
have to be integrated in varying degrees.
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6. Preview
It will be my endeavor to converge thoughts in 3 phases:
a) Phase -1
b) Phase - 2
c) Phase – 3
HR Issues in Mergers & Acquisitions
Managing HR Issues
Role of HR
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7. PHASE-1 – HR Issues in M&A
Major stress on the M&A activity are : -
* Power status and prestige changes
* Loss of identity
* Uncertainty
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8. • What happens to the employees of the two companies? How will they adjust
to the new corporate environment? Will some choose to leave?
• Roles, behaviors and attitudes of managers affect employees' adjustment to
M&A.
• Multiple waves of anxiety and culture clashes are most common causes of
merger failure.
• HR plays an important role in anticipating and reducing the impact of these
cultural clashes.
• Gaining emotional and intellectual buy-in from the staff is not easy, Unequal
compensation may become issue of contention among new co-workers.
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9. • There should be a clear and unambiguous communication between the
new management and employees.
• To manage organizational stress, establish performance criteria.
• Identify who will stay and who will go.
• Create a new organizational structure and assume the leadership of the
emerging organization.
• As the transition begins, the two cultures should combine to create a
unique culture.
PHASE-2 - Managing HR Issues in M&A
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10. PHASE-3 – Role of HR in M&A
Active Role :
• Educating senior executives about HR issues
that can interfere with the success of the
merger.
• Change process by offering interventions that
will help ensure a successful merger.
• Carry Out Effective HR Integration:
Remuneration, Benefits, Terms & Conditions,
Culture & Management Style, Career
Development Issues, Communication,
Employee Relations
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11. HR Needs to
• Facilitates Transition Teams
• Educate Managers & Employees
• Develop Newly Formed Teams
• Reinforce the New Culture
• Involve in Planning, Transition &
Integration Teams
• Help Line Managers to Communicate
Effectively During Transition Phase
• Managing Individuals with Dignity
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12. HR Needs to
• Developing & Implementing Actions to
Retain Key Employees: Help Clarify Roles
• Use existing employees as mentors on
organizational culture, values, key players,
expectations and opportunities.
• Identify HR Issues & Carry Out an Effective
HR Due Diligence
* Understanding the organizational structure.
* Identifying which job descriptions need to be
changed.
* Comparing ways of working and identifying
differences which need to be addressed.
* Is the organization unionized or does the
employee representation group have
negotiations rights, and if so, what do these
rights include?
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13. Conclusion
Harvard Study, "Employees are the most important assets companies have,
yet they are totally forgotten about when a deal is being done. The boards
and senior management just don't get it."
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14. Critchley, HR Specialist on M&A - says that's a grave mistake: "Business
development can always be done a couple months down the road. Balance
sheets can be worked on later. But your employees, you'll lose them if you
don't act right away." Referring to a Harvard Business School study, he said
it takes only 60 days for a company to match its competition in pricing, 90
days in marketing and three years in distribution. "But it takes seven long
years to create a competitive corporate culture and build a top team."
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15. i. Personal gain - Mujhe kya mila?
ii. Inspire - Main kyon karoon?
iii. Aspire - Kamyaabi kaise?
iv. Belonging & Bonding - Mera hai
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16. Commitment, morale and productivity -
synergy creation- Fauje taiyaar hain
Merge Right: Numbers Don't Drive
Deals, People Do
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17. Enhancing Productivity by People's Synergy...
Thank you !!
Human Resources Institute of Development & Analysis International
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18. www.hridai.com
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