Question
| The Major Project requires you to write a 5,000-word research report. The purpose of the research report is to inform small to medium-sized businesses (less than 500 employees), as defined by U.S. International Trade Commission report on small to medium sized businesses, of what major HRM concerns should be addressed when considering a cross-border merger or acquisition. The report should show your breadth and depth of insight from the assigned reading and show clear evidence of outside research of at least 15 resources. The resources should come from at least five different sources (websites, organizations, magazines, etc.). These are the points I want you to write about: • Educate on the understanding and issues in the role of human resource manager before the merger • Educate on the issues in strategic fit between human resource manager and merger acquisition • Educate on the issues managing the risks of a small-medium size business of cross-border business • Educate on issues in hiring and retaining talent while lowering labor costs for the business • Educate on issues in the adapting to a rapidly changing worker profile • Educate on issues in understanding the refinements of workers’ qualifications • Educate on issues on retaining and engaging a changing workforce of cross-border business • Educate on issues in winning the war for talent in recruiting Please keep in mind that the major project’s focus is on merger and acquisition. Your points in the project should be based on how to help a small-medium size firm better understand the HRM issues of cross-border merger/acquisition If you are not familiar with business research reports please review the WWW for explanations and examples. One example can be found at: http://www.ehow.com/info_7759167_business-research-report.html. (Note that web links can disappear or change over time. Please let the course instructor know if this link no longer works) The report should be a final polished professionally-formatted report. MSWord provides you with report templates and you can find templates on the WWW if you don’t have a preferred template already. |
Answer
Name of Student
Name of Professor
Human Resources Management Paper
21 April 2015.
Human Resource Manager Issues of Cross-Border Mergers and Acquisitions: The Case of Small- to Medium-Sized Businesses
Contents
The Role of Human Resource Manager before the Merger. 2
Strategic Fit between Human Resource Manager and Merger/Acquisition. 4
Managing the Risks of a Small-Medium Size Business of Cross-Border Business. 7
Hiring and Retaining Talent While Lowering Labor Costs for the Business. 9
Adapting To a Rapidly Changing Worker Profile. 11
Understanding the Refinements of Workers’ Qualifications. 14
Retaining and Engaging a Changing Workforce of Cross-Border Business. 15
Winning the War for Talent in Recruiting. 17
Executive Summary
Mergers and acquisitions have been an integral element of the modern business landscape. However, with the present increase in the level of globalization, the number of businesses involved in these processes, particularly small- and medium-sized firms seeking to break into cross-border business, has increased dramatically. This paper sets out to find out what this trend portends for HRM practices. This paper has found out that the HR manager should be at the forefront in addressing various challenges affecting employees during this process. Moreover, it is evident that the integration process is characterized by numerous complexities, which, if not managed well, may lead to an increase in employee turnover in both the acquiring and target firms. To avoid this situation, the HRM function should be adapted to the emerging situation, such that it is able to address issues relating to changing worker profile, talent retention, recruitment of new employees, and creation of synergies between the newly integrated organizational cultures.
Introduction
As globalization continues to influence the global business environment, small- and medium-sized businesses whose operations are restricted to one country are increasingly being subjected to cross-border mergers and acquisitions. Whether friendly or hostile, these mergers and acquisitions contribute to the emergence of major HRM concerns that must be addressed for the process of integrating the systems, structures, cultures, and processes of both companies to be successful. For example, the retention of a talented workforce of small firms may prove to be instrumental in the overall success of the merger or acquisition. Human resource managers of these firms should understand these HRM issues in order to succeed in handling the needs of employees as well as the acquiring company before, during, and after the merger.
The aim of this paper is to investigate HRM issues that tend to arise during cross-border mergers and acquisitions, and focus is mainly on small- to medium-sized firms. There is a dearth of literature on the dynamics of HRM during mergers and acquisitions in which small firms are involved. Paradoxically, there is an ongoing acquisition craze, whereby large multinational corporations with established international presence are taking over the operations of smaller firms in order to enhance their competitive advantage (Nadolska and Barkema 1175). This study sets out to contribute towards the task of bridging this research gap. It explores a number of areas, including strategic fit between the HR manager and cross-border and acquisition, management of risk, talent recruitment and retention, and changes in worker profile.
The Role of Human Resource Manager before the Merger
The HR manager of the acquiring company has a crucial role to play in addressing stressful situations that often confront most employees of the company being acquired. These employees often feel stressed because of uncertainties regarding their careers. If unaddressed, this fear may end up increasing disloyalty, dissatisfaction, productivity, and commitment (Buono and Bowditch 3). Yet the resulting human turmoil is largely inevitable since organizations must transform their systems, processes, and cultures in order to survive in today’s competitive business environment. If this human turmoil is not addressed in the right way by the HR manager, it may lead to the ultimate failure of the acquisition strategy. The challenges affecting small- and medium-sized businesses deserve special mention because they tend to be the greatest casualties of M&As after being acquired by success conglomerates.
In recent time, small- and medium-sized enterprises are increasingly getting involved in both hostile and friendly takeovers. The role of the HR manager becomes more critical in the former case, and this is primarily because of the need to retain the best talent at the business being acquired. A massive exist of the most qualified and experienced staff of the company being acquired may jeopardize the success of the acquisition process. Top management at the acquiring company must look up to the HR manager to devise appropriate strategies of integrating different individuals and groups into the newly created business entity.
The best time for a HR manager to make valuable decisions is before the merger materializes. In both the acquiring company and the business that is targeted for acquisition, a lot of restructuring tends to occur at the pre-implementation phase. This restructuring can easily alienate people at every level, thereby bringing about tremendous losses. Of specific focus at this point should be professional and managerial jobs, whose occupants may resent the idea of being required to redirect their loyalties to new bosses. To them, such a move not only smacks of betrayal but also portends an unfortunate twist to their career prospects. HR managers need to be wary of these concerns in order to be in a position to salvage the company’s human resource arsenal at its greatest time of need.
Similarly, the HR managers of the acquired businesses must lead the way in minimizing the negative effects that the acquisitions tend to have on subordinates. In some cases, inexperience, complacency, or sheer negligence leads some of these HR managers into sitting back and hoping that the unfolding situation will take care of itself. More importantly, this behavior speaks volumes about the managers’ lack of preparedness for the merger or acquisition. Before the merger occurs, HR managers may need to choose between organization-wide programs run their course or initiating the own programs to address the concerns being raised by employees at individual and group levels. The latter approach tends to be more effective because it puts the HR managers in control of the situation. As the acquisition date nears, employees become increasingly desperate for communication from HR managers in order to obtain information on how workplace life will be after the acquisition. This means that liaison with the HR manager of the acquiring company is of utmost importance for purposes of getting facts on how different organizational structures and systems will operate after the acquisition or merger. When such information is relayed to employees, they are able to look forward to future opportunities, leading to a drastic reduction in the sense of loss and betrayal.
Strategic Fit between Human Resource Manager and Merger/Acquisition
Many mergers and acquisitions (M&As) are being undertaken at the cross-border level as companies seek to take advantage of new markets and low labor costs. This trend also signifies the growing complexity of the contemporary global business environment. Human resource management remains at the heart of success in the pursuit of M$As in this environment. However, the benefits of HRM may not be realized unless a strategic fit between it and the merger and acquisition strategy exists. In this regard, one has to look at the business circumstances at the national level that might affect international operations. Conversely, certain conditions in the international business context may affect the way home-country operations are conducted after the merger.
The idea of strategic fit can enable small- and medium-sized businesses to overcome the problems that come with the integration stage of the merger. The existence of these problems is demonstrated by the fact that many of the cross-border mergers and acquisitions do not yield the intended results. Unfortunately, whenever problems arise, most managers tend to focus too much on issues such as choice of market, niche creation, financial aspects of the acquisition process, often at the expense of HRM issues. It is true that a company may have paid too much to acquire a new business, but it may also be true that HRM strategies of the two business entities were not integrated in the right way (Aguilera, Dencker and Yalabik 51). It takes a lot of strategic planning to come up with solutions that can be applied to both the parent company and the business entity being acquired. In most cases, alterations must be carried out on both sides.
Failure to promote strategic fit can easily lead to the departure of senior managers following the acquisition. This development normally comes as a surprise to the company because of its preoccupation with market- and finance-related issues, with HRM being put into consideration only at the last phase of the integration process. For a strategic fit between HRM and cross-border acquisition to be achieved, HRM issues should be addressed even before the implementation of the merger begins. The parent company should assess the challenges that likely to occur and devise ways of dealing with them. Such efforts can help to reduce turnover and a possible overall failure of the merger.
Unfortunately, few researchers have examined the issue of creating HRM synergies during the acquisition process. For instance, not much has been said regarding ways of preventing conflicts between the employees of the two companies because of differences in organizational culture, performance targets, and differences in skill sets (Arvanitis and Stucki 346). By the time the M&A process reaches the implementation stage, HRM strategies of both companies should have been aligned with the stated objectives of new business entity to ensure that the desired outcomes are achieved.
Many employees of companies that are undergoing the merger and acquisition process fear that the new institutional arrangement will create redundancies that may lead to drastic changes in job description, leadership hierarchy, and career prospects. The level of fear may be higher in small- and medium-sized businesses because of employees concerns about job security. Such fear may not be unfounded given the employees’ appreciation of the unfavorable financial circumstances that may have led to the acquisition in the first place. Moreover, one may also perceive the task of entrenching HRM synergies in a cross-border merger to be more difficult than that of a domestic merger. This perception may not be too far from reality because differences in organizational and national contexts undoubtedly creates numerous uncertainties. These uncertainties occur primarily because most companies, especially small businesses, tend to anchor their structures, practices, policies, and goals on the national context. For this reason, a “fit” between the strategies that a firm puts in place and national context should be put in place. Some of the aspects of national context that have implications for HRM include culture, the structure of the economy, organizational structures, and legal-political environment.
Moreover, the HRM function must be adapted to the needs of the acquisition strategy for the expected outcomes to be achieved. Such adaptation may not always work to the advantage of the employees of the two companies. For example, it may lead to employee autonomy may be restricted, hiring decisions may be transferred to the acquiring company, and career mobility may be restricted. This is mainly the case in situations where the acquiring company’s objective is to enhance organizational efficiency by eliminating excess capacity. In this regard, the need to increase market share and optimize economies of scale may drive some acquiring companies into doing away with some of the human resources of the business being acquired.
Managing the Risks of a Small-Medium Size Business of Cross-Border Business
HR managers of small- and medium sized businesses involved in mergers and acquisitions face several risks that they must handle in the most appropriate manner for the merger or acquisition process to be successful. Whether it is cultural risk, market risk, or risks associated with research and development, proper handling of the prevailing circumstances greatly influences the outcomes of the acquisition strategy. Cultural risk, for example, occurs when there is cultural distance between the two companies involved in the merger or acquisition process. In cross-border mergers, there is always a high likelihood that the cultural distance will be wide. However, some countries tend to have similar cultures, a situation that translates to a lower level of cultural risk.
A HR manager’s understanding of both corporate and national cultural is of utmost relevance in enabling him to anticipate problems and devise strategies for dealing with them. It is unfortunate that culture is normally relegated to a position of little significance when mergers are being evaluated (Zhang 23). Most top management executives prefer to evaluate resource and product-market synergies. However, this is hardly surprising considering that culture is a highly pervasive phenomenon (Zhang 23). Few people in businesses involved may not realize this but culture affects day-to-day activities such as promotion policy, schedules of meetings, and setting of priorities. For example, in many Asian countries, the development of human resources emphasizes ideological indoctrination and awareness of prevailing political realities. On the other hand, companies originating from Western countries such as the United States elevate skill training above cultural, political, and ideological considerations. Since human resources are at the heart of the entire process of addressing national cultural difference, HR managers need to lead the way in raising the profile of cultural risk before the process of implementing a cross-border merger or acquisition commences.
In contrast to cultural risk, market and R&D risks rank highly among the items on the watch list of top executives involved in the merger or acquisition process. The analysis of these risks is often informed by an in-depth understanding of corporate governance systems at the national level. These systems are by default assumed to be resistant to change, although slight variations across countries normally exist. As far as these variations are concerned, two ends of a continuum are assumed to exist: coordinated and liberal market economies, and HR managers normally use this framework to assess the level of market and R&D risk involved (Aguilera and Dencker 1360). In liberal market economies, expectations are always high regarding the protection of employees’ rights as well as those of shareholders. Under such conditions, employees should expect to put up with less restructuring and relocation of organizational functions.
From the point of view of a HR manager, an assessment of national governance institutions should be carried out before acquisitions are made as a way of minimizing risk. In this case, an acquiring company would be better off abandoning planned changes if they are likely to increase business risks. An increase in business risks would defeat the whole objective of acquiring a new business particularly for small- and medium-sized enterprises because their main reason for doing so is normally to enhance their overall competitiveness through innovation and performance. Although ignoring innovation through acquisitions can put the survival of a small- or medium-sized business at risk, things may not turn out to be any better if the business ends up failing to develop its human resources at the post-acquisition phase. The responsibility of achieving this objective falls squarely on the shoulders of the HR manager of the acquiring company as well as the company that has been acquired.
Hiring and Retaining Talent While Lowering Labor Costs for the Business
The retention of talent has been cited as the most pressing concern in merger/acquisition literature (Stahl et al. 97). The issue of lowering labor costs while at it features prominently in studies on mergers and acquisitions in small- and medium-sized businesses (Kole and Lehn. 241). Kole and Lehn observe that small firms tend to do better in terms of addressing internal equity considerations compared to their larger counterparts. For example, large firms find it difficult to establish acceptable differences in terms of compensation plans because of the resulting disharmony among lower-paid employees. At the same time, the benefits that come with the creation of synergies are often offset by the huge costs of workforce integration.
The task of lowering labor costs may be complicated by the cross-cultural context in which the merger or acquisition unfolds. To avoid unnecessary costs, HR managers need to understand the intricacies of labor relations that exist in situations where mergers are being implemented. In this undertaking, the need to maintain industry-specific focus should not be overlooked since the labor-cost implications of a merger that unfolds in one industry may be radically different from those of a similar merger in another industry. For example, in the airlines industry, a huge component of operating expenses are taken up by labor costs (Kole and Lehn. 241). Another example entails a comparison between service and non-service industries. In the service industry, worker disharmony can have far-reaching implications on the company’s brand. In their attempt to promote harmony, service-industry companies end up investing more heavily in human resources than their non-service industry counterparts.
To retain talent and reduce labor costs, HR managers of small firms involved in cross-border mergers must expose their workforce to exciting opportunities for career growth, particularly those that come with expansion into new geographical areas of extension of the product, service, or technology range (Schweiger and Very 7). In this undertaking, focus should be on the introduction of those products that enhance the integrated firm’s positioning in terms of competitive advantage. Under these circumstances, the HR teams of both the acquiring firm and the firm being acquired can create new synergies based on a reoriented organizational, institutional, and market structure. Moreover, the workforce can gain exposure to new skills and technologies. Other organizational activities that can create synergy, while at the same time contributing to talent retention in a cost effective manner include eliminating redundant functions, sharing basic platforms, and promoting innovation through the acquisition of more sophisticated technologies. The HR function should emphasize the centrality of human resources in leading the way in the realization of promoting integration and reducing business costs (Schweiger and Goulet 72).
Kapoor and Lim offer a slightly different perspective, which is based on the provision of incentives to increase productivity among employees from both the acquiring firm and the acquired firm (1133). However, this arrangement works best in situations where the acquiring firm is large and the firm being acquired is small. This argument is anchored on the assumption that increased productivity can easily offset the huge labor costs associated with the process of implementing a merger or acquisition. In this case, Kapoor and Lim argue that for higher productivity to be achieved, the level of overlap in skills should range from moderate to low (1138).
Adapting To a Rapidly Changing Worker Profile
The process of merger or acquisition comes with numerous challenges particularly on the human side of the business being acquired. Most of these challenges because the worker profile keeps changing rapidly. The post-integration process brings into perspective numerous changes in terms of skill requirements, operational processes, organizational culture, group dynamics, and inter-organizational interactions. Employees of small firms undergoing the acquisition process may not possess the skills required to adapt to this changing environment. To address these problems, HR managers must come up with new strategies that are compatible with the emerging realities of the post-acquisition phase.
To begin with, strategies for attracting and retaining employees must change in order to reflect the new set of conditions under which business operations will be taking place. In cross-border contexts, every employee is expected to be more conscious of the global dimension in all business operations. For example, one must be able to adapt to emerging cultural challenges and indeed transform them into business opportunities. This changing worker profile should be viewed as a manifestation of the global approach to human resource management that greatly contributes to the success of multinational corporations. These corporations invest heavily in human resource functions aimed at widening the existing range of skills in order to fit into an inter-cultural business environment.
The work profile also needs to change in terms of access to knowledge, especially in the context of today’s information age. As the process of implementing mergers commences, HR managers need to be aware of the need for new knowledge repositories as a way of creating avenues through which employees can update their skills and competencies (Hitt and Pisano 48). On the other hand, employees are expected to play a greater role in promoting organizational efficiency upon the commencement of a merger or acquisition using the newly introduced knowledge repositories. This expectation arises because the top management of both the acquiring company and the business being acquired normally look forward to a successful merger or acquisition. The overall outcome is a situation where greater demands and pressures are imposed on the employees of small- and medium-sized firms involved in the merger or acquisition process. In fact, this is one of the reasons why some employees choose to quit their jobs soon after the commencement of the post-acquisition integration process. To reduce turnover at this stage, HR managers may consider adjusting existing compensation structures in such a way that they reflect the increase in workload or reorienting employee development programs in order to create a new sense of purpose and career growth.
Meanwhile, a fortunate development that may occur amidst these challenges is that the level of competition for highly skilled workers may increase following the change of the business profile of the small- or medium-sized firm involved in the acquisition process. As a small business merges with a larger, more successful, globally-oriented company, the competition for skilled manpower increases. This means that the likelihood of a worker being poached by a rival firm increases considerably. To guard against this possibility, the acquiring firm may raise the bar in terms of the level of loyalty that all employees are expected to demonstrate in order to avoid being perceived to be merely stayers.
It is also important for HR managers to turn their focus on organizational teams and group dynamics. For teams to perform well after the merger, they must also be able to engage in cross-functional and cross-cultural interactions. For employees of a small firm that is being merged with or acquired by a larger firm, these are important skills that are best mastered within the wider realm of a worker-profile overhaul. At the same time, employees of small- and medium-sized businesses gain exposure to inter-organizational aspects such as technology diffusion, embracement of international supply chains, and collaborations in various research areas. The resulting workplace changes are best appreciated and taken advantage of for career progress through a drastic change of worker profile. It is the responsibility of the HR manager of the firm being acquired to ensure that all employees of both companies are adequately prepared for this kind of transformation.
It is worthwhile to note that the main reason why mergers and acquisitions occur, especially in small- and medium-sized firms, is to create strategic avenues for growth. As the pursuit of growth ensues, reorientation of the human resource function becomes a necessity. This explains why the worker profile ends up undergoing transformation. Failure to introduce changes in the way employees of the newly acquired company operate may portend problems for the entire process of implementing the acquisition process. Of specific importance is the integration stage, where a lot of attention shifts to the human side as the process of bringing together two organizational cultures together commences.
During the post-merger period, a lot happens on the human side of a small business. Other than exposure to cross-border practices, employees must get used to a greater level of bureaucratic complexity and a more elaborate hierarchical structure. Most small businesses tend to operate through a highly centralized structure in which senior managers exert considerable influence on lower-cadre employees. If the cross-border merger involves a larger company, a greater level of structural complexity may be assumed to exist, in which case the employees of the firm being acquired would need to adapt to a new way of handling organizational processes, values, and systems. The ability to adapt to such a new environment calls for certain skill sets that the employees may not necessarily possess. In this regard, it is upon the HR manager to make an informed decision regarding the possibility of launching a training program aimed at enabling the employees to maneuver the new workplace more effectively.
Understanding the Refinements of Workers’ Qualifications
Following mergers and acquisitions involving small- and medium-sizes firms at the cross-border level, attention tends to shift towards the rationalization of the use of labor. In this case, the firms involved in the merger endeavor to increase efficiency in the post-merger stage. This phenomenon manifests itself mostly during hostile mergers. An important way in which the companies involved rationalize labor is through HR department initiatives aimed at refining workers’ qualifications. It may happen that one of the reasons why the acquired firm may not have been able to compete well in the market was lack of proper qualifications among its staff. This mean that refining the qualifications of employees is the most appropriate initial step to take immediately after the takeover of the small- or medium-sized firm in question.
Even as the HR managers acquiring company embarks on the process of refining the qualifications of the employees of the newly acquired firm, they must understand the various people issues that need to be put into consideration. Some of these issues include pay, grading structure, benefits, and avenues for integrating new workers. Some of these issues should be addressed during the transaction stage of the acquisition rather than the post-acquisition stage. The objective of using this approach is to make the employees of both the acquirer and target get the impression that their needs are being factored into the whole process. Regular communication not only enhances the level of trust conferred on the HR department, it also enables the HR department to gain insights into various ways of measuring workers’ qualifications and comparing it with the benchmarks of leading multinational corporations.
Rather than lock out employees out of the newly integrated firm for purported lack of qualifications, HR managers of small firms that are engaged in cross-border mergers and acquisitions are better off adopting the people perspective in assessing the appropriateness of each employee’s qualifications. This approach requires a careful evaluation of organizational structures to determine where each employee will fit and the kind of rewards that will be commensurate with the new job description. Moreover, this approach can help the HR department retain its best talent and align its skills and competencies with the aims of the organization. Failure to undertake this evaluation process effectively may lead to the loss of key staff that are integral to the firm’s ability to achieve the successes associated with mergers and acquisitions. In this regard, the indication is that small businesses should not stop executing HR policies aimed at identifying the most qualified staff the day the firm is acquired; rather, they should continue reviewing the employees’ qualifications to ensure that the available manpower has the capacity to achieved the stated goals of the organization.
Retaining and Engaging a Changing Workforce of Cross-Border Business
In takeovers involving small firms being acquired by large, successful firms with cross-border business operations, the tasks of retaining and engaging key talent constructively constitute a crucial imperative. For purposes of promoting the success of the merger or acquisition, the acquiring company must identify key talent and engage during the earliest stages of the integration process. In fact, it should be an integral part of the due diligence that is normally carried out to determine the viability of the takeover. Essentially, this means that the HR managers of the acquiring company should have an idea about the positions that will be occupied by key staff of the target firm even before a takeover deal has been sealed.
The customary practice involves the formation of agreements in which a specific period during which the key talent will be retained is stipulated. However, in the current takeover craze in which large corporations with established cross-border presence are acquiring smaller firms that are struggling to break even in the international market, new trends are emerging, whereby retention incentives based on corporate performance such as stock options are being used to ensure that key talent that is instrumental for the success of the merger are retained (Antila 1011). Other than performance-based incentives, acquiring companies have also started offering incentives primarily on the basis of individual talent. Alternatively, group-based performance incentives can also be used as a way of ensuring that the most qualified are integrated into the newly integrated company.
Unfortunately, with the dynamism of the contemporary workforce, one cannot rule out the possibility that some employees will choose to move on to a new employer. Whenever some employees decide to leave the company against the wishes of the acquiring firm, the best thing is for the HR department of that firm to accept the turn of events gracefully and put in place measures aimed at filling the resulting workforce gap. This essentially means that all HR people who are involved in the integration process following a takeover should always look at possible contingencies in the way they allocate tasks to employees of the target company (Reuer, Shenkar and Ragozzino 19). Failure to take such measure may lead to operational failure and a subsequent slump in financial performance.
HRM must also manage variations in HR activities across countries, which may inadvertently impact negatively on efforts to retain and engage the employees of the target firm. For example, in some mergers, a redesign of performance systems may be necessitated by variations in the remuneration processes of the two companies. Failure to make the necessary adjustments may lead to undesirable outcomes. For instance, key managers may choose to leave the acquired company if a new workforce with distinct cultural backgrounds virtually takes over and begins exerting stiff control over the company’s management activities (Ahammad, Glaister, Weber and Tarba 458). Even if the firms are based in countries whose type of market economy is largely similar, elements of localization may have far-reaching implications for the integration of HRM practices in general and employee retention and engagement in particular.
Winning the War for Talent in Recruiting
It is rather common for companies to launch recruitment drives during the post-acquisition phase. In this undertaking, the companies seek to hire new talents for newly created positions or those that have fallen vacant following the departure of a section of the workforce. The recruitment task can be daunting under these circumstances because of the dynamics of organizational culture, operational processes, and management hierarchy. At the same time, HR professionals of the recruiting firm must seek to win the best talent, which a fairly difficult task particularly when the objective is to fill positons left by employees of small- and medium-sized companies. Highly qualified employees are likely to prefer large, successful companies to their small- and medium-sized counterparts, thereby making the recruitment process a tricky undertaking for the latter category of companies.
To win the best talent, HR professionals must understand the needs of the newly formed organizational culture. Mergers and acquisitions normally bring about far-reaching external and internal changes to the operations of a company. An in-depth understanding of these changes is critical in the task of search for talented employees. Moreover, constant, open communication is necessary since it reflects positively on the company. Open communication brings about trust, which is a major factor in a company’s endeavor to win talent as well as the hearts and minds of disgruntled employees. Similarly, the critical role of leadership throughout the recruitment process should not be overlooked. During the merger or acquisition process, the company’s leadership plays a critical role of a conduit between the HR team and existing employees, newly hired employees, and prospective job candidates. These efforts can greatly contribute to the success of a company’s recruitment exercise despite the emergence of complex situations that confront HR managers of small- and medium-sized firms throughout the merger or acquisition process.
Conclusion
Mergers and acquisitions have become a common phenomenon in the contemporary world of business. Many small- and medium-sized businesses are increasingly entering into mergers with larger firms, and this has led to the emergence of various HRM issues. This paper has examined a number of these issues with a view to make propositions on how contemporary HR practices of both acquiring and target firms can be adapted to the changes that come with the merger and acquisition processes. One important finding is that the human resource manager has a critical role to play in addressing stressful situations that often confront most employees of the company being acquired. Their role in promoting strategic fit between human resource function and the merger and acquisition processes has also be emphasized. This essentially entails adapting the HR function to the needs of the acquisition strategy for the expected outcomes to be achieved. The other main demands of the HR manager’s job during the integration process entail the ability to adapt to a changing worker profile as well as hire and retain the best talents, an in-depth understanding of workers’ qualifications, and awareness of strategies for recruiting, retaining, and engaging workforce in cross-border contexts.
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