hr

1. HUMAN RESOURCE ASPECT OF
MERGERS AND ACQUISITIONS
AKARSH VAIBHAV(PGDMBM5CM/2104)
RAJSHREE SHARMA(PGDMIM4CM/2137)

2. INTRODUCTION
• COMPANIES TODAY NEEDS TO BE FAST
GROWING,EFFICIENT,PROFITABLE,FLEXIBLE,ADAPTABLE AND FUTURE
READY
• THEY WANT A DOMINANT MARKET POSITION
• ITS VIRTUALLY IMPOSSIBLE TO COMPLETE TODAY’S GLOBAL ECONOMY
• THEY WORK WITH SMALLER FIRMS THAT HAVE DEVELOPED OR ARE
DEVELOPING NEW PRODUCTS
• SOME FIRMS FOCUS ON THEIR OWN INTERNAL GROWTH,LEADERSHIP AND
DEVELOPMENT
• GROWING OR EXPANDING THROUGH DEALS RESULTS IN MERGERS AND
ACQUISITIONS

3. WHAT IS MERGERS AND ACQUISITIONS
• WHEN WE USE THE TERM “MERGER”, WE ARE REFERRING TO THE
MERGING OF TWO COMPANIES WHERE ONE NEW COMPANY WILL
CONTINUE TO EXIST
• THE TERM “ACQUISITION” REFERS TO THE ACQUISITION OF ASSETS
BY ONE COMPANY FROM ANOTHER COMPANY

4. OBJECTIVE OF M&A
• OBJECTIVE OF MERGER IS TO ACHIEVE ECONOMY OF SCALE AND TO
CARRY ON BUSINESS MORE ECONOMICALLY AND EFFICIENTLY
• OBJECTIVE OF ACQUISITION IS SELF EVIDENTLY GROWTH AND
EXPANSION OF THE ACQUIRER’S ASSETS,SALES AND MARKET SHARE

5. REASONS FOR MERGER
• HORIZONTAL MERGERS FOR MARKET DOMINANCE;ECONOMIES OF
SALE
• VERTICAL MERGERS FOR CHANNEL CONTROL
• COST CUTTING
• SURVIVAL
• GROWTH FOR LEADERSHIP AND GLOBAL REACH

6. REASONS FOR ACQUIRE
• ACQUISITION OF CASH,TAXES AND EXCESS DEBT
• GAINING A CORE COMPETENCE TO DO MORE COMBINATION
• FINANCIAL GAIN
• BIGGER ASSET BASE TO LEVERAGE BORROWING

7. HR ISSUES
• A SUBSTANTIAL NUMBER ARE HUMAN RESOURCE RELATED,EG-
ACQUISITION OF KEY TALENT
• CREATION OF A DEDICATED TOP EXECUTIVES
• M&A FAILS DUE TO LACK OF A CAPABLE LEADER
• THE SELECTION DECISION OF WHICH ONE TO CHOOSE
• A WELL THOUGHT PLAN FOR MANAGING THE REST OF THE M&A
• PLANNING TO LEARN FROM THE M&A PROCESS

8. ROLE OF HR DEPARTMENT IN M&A ACTIVITY
• DEVELOPING KEY STRATEGIES FOR A COMPANY’S M&A ACTIVITIES
• MANAGING THE SOFT DUE DILIGENCE ACTIVITY
• PROVIDING INPUT INTO MANAGING THE PROCESS OF CHANGE
• CREATING TRANSITION TEAMS,ESPECIALLY THOSE WHO WILL BE
SEEING THE COMMUNICATION
• MANAGING THE LEARNING PROCESS

9. ROLE OF HR IN M&A
• A COMPANY’S HUMAN RESOURCE DEPARTMENT AS WELL AS THE
HUMAN RESOURCE WORKERS IN THE COMPANY PLAY A VITAL ROLE
IN THE PROCESS
• THE ROLE OF HR IN M&A PROCESS ARE
• COMPANY CULTURE
1. BENEFITS PROBLEMS
2. EMPLOYEE CONCERNS
3. CHANGING ROLE AND STRUCTURE

10. COMPANY CULTURE
• HUMAN RESOURCE MUST HAVE A FIRM GRASP ON THE CULTURE OF
THE COMPANY FOR WHICH THEY WORK AND MUST STUDY THE
CULTURE OF THE OTHER ORGANIZATION
• CULTURE DIFFERENCES MAY INCLUDE
1. HOW ORGANIZATIONS DEFINE AND MEASURES SUCCESS
2. HOW PROBLEMS ARE HANDLED
3. MANAGING STYLES
4. OVERALL ATTITUDE OF EMPLOYEE AND MANAGERS

11. BENEFITS AND PROBLEMS
• HUMAN RESOURCES FROM PURCHASING THE COMPANY ASSESS THE
BENEFITS STRUCTURE OF THE OTHER COMPANY TO UNCOVER ANY
POTENTIAL PROBLEMS

12. EMPLOYEE CONCERNS
• HUMAN RESOURCES CAN DETECT AND ADDRESS ANY RUMORS ABOUT
LAYOFFS,OFFICE RELOCATION OR OTHER CHANGES EMPLOYEES
FEAR,GIVING FEEDBACK TO MANAGEMENT ABOUT EMPLOYEE
CONCERNS

13. CHANGING ROLES&STRUCTURES
• WHEN ONE COMPANY MERGES WITH OR ACQUIRES ANOTHER,SOME
CHANGES TO BOTH ORGANIZATIONS MAY OCCUR
• HUMAN RESOURCES COMMUNICATES TO EMPLOYEES CHANGES IN
WHO THEY REPORT TO WITHIN THE COMPANY,WHAT TEAM OR
WORK GROUP EMPLOYEES ARE ASSIGNED TO AS WELL AS ANY
CHANGES TO DIFFERENT POSITIONS ROLES IN THE ORGANIZATION

14. CONCLUSION
• AT COMPANY LEVEL
1. IT IS IMPORTANT THAT BUSINESS AND INTEGRATION STRATEGIES
CAN BE CLEAR
2. FINANCIAL EXPECTATIONS MUST BE MADE CLEAR
3. FOR M&A,IT IS ESSENTIAL TO UNDERSTAND MARKET DYNAMICS
AND CUSTOMERS
4. AVOID AMBIGUITY IN DECISION MAKING GUIDANCE

15. • AT HR LEVEL
1. SKILLED PEOPLE SHOULD BE INCHARGE OF IMPLEMENTING M&A
DEALS
2. EARLY PLANNING OF THE INTEGRATION PROCESS
3. DIFFCULT DECISIONS SHOULD BE DEALT QUICKLY
4. IT IS IMPORTANT TO BE SENSITIVE TO CULTURAL DIFFERENCE