Good Essay About Change Management: Mergers
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Change Management: Mergers
In today’s work environment that is characterized by a lot of dynamism, organizations that hope to survive and remain relevant are constantly forced to change and adapt their strategies in order to fit with the prevailing environmental conditions. However, if not carefully planned for, the change process can become the main undoing of the organization, and once it is complete, an organization may never pick up and may eventually collapse. An organization merger is a perfect exemplification of a change process. When two companies come together to form a joint venture, there is a transition that occurs. To minimize the impact; change management needs to occur to ensure a smooth and successful implementation in order to achieve lasting benefits. There are many variables that must be accounted for when managing this change, especially during a joint venture – is one business bigger than the others and does this affect social dynamics, will this transition affect prior managerial roles and responsibilities, will the change affect individual’s career progression. Each factor is unique to a workplace and change may disrupt these for the better or worse. There are several aspects of change management that should be involved in a gigantic change process such as a merger or joint venture. These aspects are effective communication, include timely and effective communication, well-designed plan for facilitating cultural compatibility and finally leadership and training. These are aspects that I observed in the organization that I was working in and after a deep analysis, I came to the conclusion that it was the presence of these factors that inadvertently facilitated a smooth transition that eventually culminated in the formation of an effective and profitable joint venture.
The Company I am working for entered a joint venture with a smaller business in Mach 2014. The dynamics of the two were different by a significant margin – the larger was well established with a very social culture which although it had a vertical structure, in social settings this was broken down which allowed those at the bottom of the chain of command to comfortably socialize with the senior management. The smaller company had a much more lateral structure; having such a smaller team meant that they were more tight-knit. As a member of the larger organization, I was able to learn a lot about effective change management particular on the key elements of effective change management.
Elements of Effective Change Management
A merger comprises of the integration of business, the financial, and the human resource systems of organizations. Many mergers tend to focus on the former two. These are of course operationally essential since they create the foundation for success. Unfortunately, little attention is given to the human factors. In many instances, very little or no communication at all is forwarded to the employees regarding an upcoming merger. Communication is often restricted to those that are deemed to be worthy of knowing (Lewis, 2011). By the time the merger happens, in terms of business and financial systems integration, many employees are emotionally disengaged from the organization, and some have even left. Lack of effective communication to the employees has the potential to derail the entire process. For this to be avoided, an official communication strategy that cascades down the human resources level during the pre-merger phase and the subsequent phases needs to be put in place. First of all, employees need to be told of the impending mergers. Many employees tend to resist change, and an impending merger is often treated very suspiciously especially when the employees do not have enough details about what this particular change entails (Clegg, Kornberger and Pitsis, 2011). Many may think that the merger will result in firings or massive layoffs. These are fears and suspicions that should be effectively mitigated by the management of the two organizations (Lewis, 2011). The firms should assure their employees of sustained employment and fully explain that the particular change aspire to bring about. The more the communication is delayed about the impending merge, the more difficult it will be for the two companies merging to regain their footing (Lewis, 2011). Employees need to be kept up to date and provided relevant communicating in the course of the transition and after the transition is complete.
This element of change permanent was brilliantly exhibited in the organization that I was working for. Before, the actual merger happened, employees were summoned to a general meeting where the C.E.O of the company made the ultimate announcement that the organization was planning to merge with a smaller company. In this meeting, various organization heads and personnel were called up to explain the purpose behind the planned merger and the benefits that all organizational stakeholders, as well as the entire organization, ought to accrue. In addition, the management was very first to make it clear that the change would not result in any loss of employment. Employees were also invited to ask questions and give their opinions about this change. Apart from this initial communication, further communication was made as the process continued. Even after the transition, was over, the management continued relaying information to the employees. I believe that this effective communication was part of the reason why the change process was so smooth and why operations kicked right off after the complete of the merge.
In the case of a merger, there is no doubt that the organizations involved in the mergers have relatively differing cultures and structures. If the merger is to be successful, action must be taken to facilitate the compatibility of the merging firm’s cultures. Having different cultures can obviously act as an impendent to the change process that is the merger. In addition, culture becomes important once the merger is complete because of the two differing cultures of the merging organization’s cannot find some form of common ground, disaster is inevitable. An organization’s culture dictates how employees behave, how they relate with each other, how they carry out their duties, the nature of relations with superiors and subordinates among many important other important organizational aspects (Clarke and Clegg, 2000).
If the transition or the change is to be successful, then some point of compatibility must be established (Kavanagh & Ashkanasy, 2000). The compatibility of the cultures can initially be done through a preliminary cultural assessment. In mergers, assessing the culture of the second organization is often hampered by the fact that the negotiations that lead into a merger require to be kept secret. In spite of this, lack of cultural assessment is extremely risky because the organizations may ultimately find out after they have already committed themselves to the merged enterprise that they have enormous cultural incompatibility that cannot be mitigated (Kavanagh & Ashkanasy, 2000). If the merger is approached without due consideration of the distinctive culture of the merging firms, chaos is likely to erupt and even when the organizations merge; the new organization may actually fail to take off (Woodman & Pasmore, 2009).
Therefore, one of the key elements of successful change management during a merger is a well-designed plan for cultural assessment in order to gauge the cultural compatibility of the merging organizations. (Deetz, Tracy & Simpson, 2000).
One of the ways through which organizations can gain a true culture insight is by indulging in each other’s cultures and then working towards attaining a similar culture so that one the change takes place, everything will be smooth (Lee et al., 2008). Additionally, this can take place by providing a platform for dialogue between the members of the two different cultures and therefore allowing differing assumptions and opinions to surface. As a form of conversation, dialogue enables the employees to relax and attempt to examine the assumptions that are located behind their cognitive and thought process. When the employees from two different cultures engage in such dialogue, they are able to learn about each other and assess the compatibility of their thinking process and this is very likely to remove anxiety and uncertainty that the employees may have about the coming merger (Lee et al., 2008).
In my current organization, this is what took place precisely. Employees from my organization were sent to the second organization for a total of three weeks prior to the merger. The same happened with the other organization who sent employees to our organization. In the course of this time, the employees engaged and fully indulged into the second organization’s culture. At the end of the exercise, the employees were supposed to file a report about their experience and were also subjected to a test whose aim was once again to establish the cultural compatibility of the two organizations. At the end of the venture, it was found that the cultures of the two organizations were not very much different. Employees reported getting along very well with those of the other organization and finding out that they had relatively similar thought patterns.
Leadership and Training
Successful change management is inadvertently not possible without proper leadership (Kavanagh & Ashkanasy, 2006). In fact, the management is supposed to lead by example and in the case of a merger; the role of leadership in successful change management becomes accentuated. Leaders are supposed to make decisions that are in the best interest of the organization and ensure that the transition is smooth.
First of all, in terms of change management, it is the leaders who have to decide carefully how to go about the communication. For example, good leadership entails determining what to and what not to reveal to the employees (Deetz Tracy & Simpson, 2000). The negotiation stage is particularly very sensitive for an organization that’s is hoping to go through a merger. As much as communication must be made to employees the management has to decide the scope of this communication. Timing is also of importance. Since it is the leadership which is endowed with these duties, it has to make the best decision regarding when and what to communicate (Deetz Tracy & Simpson, 2000).
Even more important is the need for leaders to lead by example. Employees obviously look up to their leaders for guidance ad during a crucial process such as a merger; the o leadership must know to act (Deetz Tracy & Simpson, 2000). It is only through proper leadership that the process will be smooth. In fact, part of proper change management should involve leadership training. Before a change is initiated, the leaders of the organization should receive training on how to smoothly guide the organization through the change.
Employee training is also crucial. In addition to leadership guidance, formal employee training on the aftermath of the transition has been found to be very effective in mitigating any negative effects of change. Employees, as well as other firm stakeholders, need to be adequately prepared for change by being trained on the new ways of conducting things after the change has been effected (Dunford, 1992). Training works hand in hand with effective communication to reduce resistance to change. In addition, training facilitates a smooth change over whereby things kick right off after the change process is complete. In terms of mergers, the involved firms may choose to train their employees together or each may partake to train its staff and stakeholders separately.
In my organization, the latter was enacted. After the two organizations had engaged in the cultural assessment, combined employee training sessions were enacted. Over the course of this transition, employees from similar departments in the two organizations would be assembled, and they would be trained in the new ways of conducting things.
All organizations undergo some form of change in the course of their lifetime. Change is indeed the key to the survival of an organization. A change process, such as a merger can prove to be very testing time for an organization. For the goals and objectives of the new organization to be achieved, it is imperative that an effective change management plan be utilized. Such a plan will ensure that the transition is smooth and after completion, the new organizational is operational and things kicks right off. Some of the key elements of an effective change management for a merger, as shown above, include timely and effective communication, well-designed plan for facilitating cultural compatibility and integration and finally leadership and training. It was indeed the presence of these three aspects of change management in the organizational where I completed my vocational placement that made the merger be smooth and effective.
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