UK Corporate Mergers and Their Implications - Essay Example

? UK Corporate Mergers and Their Implications of the Executive summary The research paper seeks tohighlight HR driven implication of corporate mergers in UK and to fulfil the purpose of the study, the researcher has deployed qualitative research methodology. Two technological SMEs of UK has been selected as the sample organizations that have been participated in corporate merger process recently. Open ended interview with semi structured questionnaire of 5 HRD practitioners of the mentioned technological companies has been conducted in order to gather primary data. The study has identified multiple HR driven implications of corporate mergers such as downsizing planning, training & development, managing change resistance, deciding optimal human resource portfolio after merger and establishing performance management indicators. It has been found that primary role of HR practitioners would get extension during corporate merger process and for this reason, top level management have started putting more importance to HRD division in order to address HR driven implication of corporate mergers in proper manner. Apart from fulfilling gap in the literature regarding HR driven implication of corporate mergers, the study finding can be used by companies to plan the human resource management strategy during corporate mergers in UK. Table of Contents Table of Contents 3 SECTION 1: INTRODUCTION 4 SECTION 2: LITERATURE REVIEW 4 SECTION 3: METHODOLOGY 5 SECTION 4: DISCUSSION OF FINDINGS 5 SECTION 5: CONCLUSIONS 7 Reference List 9 Appendices 10 Appendix 1: Semi Structured Interview Pro-Forma 10 Appendix 2: Transcript of Interview 11 SECTION 1: INTRODUCTION Szabla (2007) pointed out that merger and acquisition has become essential for companies in order to increase their resource capability, achieve inorganic growth, decrease competitive threat by acquiring small competitors, implement retrenchment strategy in order to avoid further loss etc. In such context, Kongpichayanond (2009) pointed out implication of corporate merger has human resource side and as a result of merger, downsizing, recruiting or training are being took place and all these activities are core responsibilities of human resource departments. Consideration of research works of Szabla (2007) reveals the fact that although HR practitioners have to play vital during the part of downsizing employee, recruiting new staff, providing training to staff of partner companies which are being important implication of corporate mergers but very few researchers conducted research on the topic in order to understand HR driven implications of corporate mergers. Therefore, aim of the study will be to conduct research human resource implications of corporate mergers and fulfil certain gap in the literature. UK has been selected as location for the research. In such backdrop, following research question has been derived for this research paper. Research Question: What is HR driven implication of corporate mergers in UK? SECTION 2: LITERATURE REVIEW Liveris (2001, p. 19) defined the characteristics of corporate mergers & acquisition as, “The whole M&A process begins with confidential discussions. What is your company looking to buy? Who’s willing to sell? How much will it cost? Is it worth it? These are simple questions on the surface, but they require complex analysis.” In such context, Garavan (2007) and Gallos (2006) pointed out that human resource department works closely with partner organizations on strategic issues throughout corporate merger process such as downsizing of employee in order to decrease operational cost post corporate mergers, manage change resistance from existing workers towards the corporate merger process, recruiting new employees, developing performance management framework post corporate mergers and providing training to employees from partner organization. In UK, human resource departments need to take part in corporate merger process as are covered by the Enterprise Act, 2002, Companies (Cross-Border Mergers) Regulations, 2007 and Companies Act, 2006 (Europa, 2011). SECTION 3: METHODOLOGY In this paper, intention of the researcher is to understand perception of HRD practitioners regarding managing human capital during corporate managers. Therefore, the researcher will use qualitative study backed by semi-structured interviews of HRD practitioners of 2 UK based technology companies (these 2 technology companies belong to Small and medium enterprises or SMEs category) that have been participated in corporate merger process recently (Sekaran and Bougie, 2009; Saunders, Lewis and Thornhil, 2007 and 2009). Convenience sampling (non-probabilistic sampling) will be used for selecting 5 HRD practitioners from these 2 UK based technology companies (Creswell, 2009). Semi-structure interview questionnaire will be e-mailed to selected 5 HRD practitioners. Content analysis of existing literature will also be used in order to conduct qualitative research. As part of ethical consideration, identity of interview participant and sample organizations will not be revealed at any part of the researcher and objective of the research will be communicated to each of respondent prior conducting the interview. SECTION 4: DISCUSSION OF FINDINGS Question 1: Based on your experiences, what are the perspectives of HR practitioners during corporate merger? The researcher has used semi-structured questions in order to conduct the analysis; therefore, the researcher was more interested in understating the HRD driven implications of corporate mergers in the own perceptions of HR practitioners participated in interview process. To answer this question, one of the respondents stated the line “I believe HR practitioners start working after the corporate merger process and they focus mainly on operational issues regarding human resource management process”. However, the researcher found divergent opinion among other participating HR practitioners when it comes to answering the question 1. As a whole, it has been assumed by most of the respondents that HR practitioners take part change management and performance management phases of corporate mergers in UK. Question 2: Based on your experiences, what are the issue you faced during corporate merger in your company? 5 respondents or HR practitioners of UK based technology companies that have been participated in corporate merger process were not very specific while answering this question. Some issues being highlighted by respondents such as, 1- deciding optimal downsizing portfolio which can maintain resource equilibrium in the organization, 2- deciding suitable training strategy for the employees being shifted to new job responsibilities through corporate merger process and 3- deciding performance management plan that can link reward to performance measurement in unbiased manner. Question 3: What insights have you offered during corporate merger process of your company? Most of the interviewee told that performance management plan, downsizing or recruiting of employees, providing training to employees so that they can cope with emergent organizational reshuffling caused by corporate mergers were the most prominent HRD driven implications of corporate merger process. Therefore, it has been found that providing suitable solutions to these issues are key insights that have been offered by HR practitioners of two technology companies participated in corporate merger process. Question 4: Do you believe downsizing is an unavoidable option for companies involved corporate merger process? Kindly explain your answer. To answer this question, most of the respondents pointed out that downsizing has become pertinent aspect in corporate merger and acquisition process due to ongoing economic recession, economic volatility, increase in cost of operation and reduction in bottom line growth due saturation of market. However, downsizing cannot be unavoidable option for companies participated in corporate merger process in UK rather; downsizing depends on strategic objectives of the company, operational cost and human resource requirement after reshuffling being done to organizations after corporate merger. According to respondents, in case of corporate merger in UK, human resource downsizing is being influenced by Enterprise Act, 2002 and Companies Act, 2006. Question 5: Do you believe top level management undervalue role of HR practitioners in corporate merger process? Kindly explain your answer. Most of the respondents have agreed with the fact that role of HR practitioners in corporate merger process was undervalued previously due to certain reasons such as lack of participation of HRD division in strategic activities of the company, lack of understanding about role of HRD division in performance management in the organization by top level management and absence of proper communication between top level management and HRD division. According to respondents participated in semi-structured interview process, in case of corporate mergers in UK, the situation has changed with emergence of issues like labour market crunch, rise in unemployment rate and emergence of strategic human resources. In such context, all the respondents got the chance to involve in every pertinent phases of corporate mergers of their company and worked with top level management on key strategic issues. SECTION 5: CONCLUSIONS The research findings are in line with the theoretical arguments of Kongpichayanond (2009), Garavan (2007) and Szabla (2007) that HR practitioners of HRD department play vital role in corporate merger process. The researcher has found certain HRD driven implications of corporate merger process in UK such as creation of perplexity regarding deciding optimal downsizing portfolio that can help the both the partnered organizations to perform in optimal manner, deciding suitable training strategy for the employees being shifted to new job responsibilities through corporate merger process and setting unbiased performance indicators for the employees of shifted through corporate merger process. Garavan (2007) and Gallos (2006) also found similar kind of result while working on the topic. It is not the fact that the research findings are completely in line with the arguments of presented in previous research work of academic scholars. Rather, in certain areas, research finding in the study has deviated significantly from the research findings of previous research scholars. For example, Garavan (2007) found downsizing as the most important HR driven implications in corporate merger process but the study has found that downsizing has equal importance as other HR driven implications like training & development of employees, establishing performance management indicators and managing change resistance from organizational individuals or 2 companies participated in corporate merger process. Kongpichayanond (2009) and Szabla (2007) argued that top level management do not give sufficient importance to role of HR division when it comes to managing corporate mergers. Surprisingly, in such context, the study found quite opposite result when it comes to corporate mergers in technology companies in UK. The study found HR practitioners of HRD department work in close loop manner with top level management throughout the entire process of corporate mergers. For example, respondents in the interview process told that they conducted weekly meeting with strategic vertical heads throughout the entire process of corporate mergers of their respective companies. In the corporate merger process, HR practitioners of HRD department get the responsibilities to help companies to maintain operating profits and minimize their losses by formulating proper human resource strategy. Small sample size or use of convenience sampling might have created biasness in research findings because small sample size cannot be considered as representative of whole population. Therefore, the study has mentioned limitations and to avoid such limitations, future researchers should conduct research with more variables and large sample population size. Reference List Creswell J. W., 2009. Research design: Qualitative, quantitative, and mixed methods approaches. 3rd ed. California: Sage Publications. Europa., 2011. Mergers. [online] Available at: [Accessed 05 December 2013]. Gallos, J. V., 2006. The OD core: Understanding and managing planned change, part 2. in Gallos, J. V. (Ed.), Organizational development: A jossey-bass reader. San Francisco, CA Jossey-Bass, pp. 129-31. Garavan, T., 2007. A strategic perspective on human resource development. Advances in Developing Human Resources, 9(1), pp. 11-30. Kongpichayanond, P., 2009. Knowledge management for sustained competitive advantage in mergers and acquisitions. Advances in Developing Human Resources, 11(3), pp. 375-87. Liveris, A., 2001. M&A integration: An insider’s look at Dow’s strategy. Chemical Market Reporter, 260(10), pp. 19-20. Saunders, M., Lewis, P. and Thornhil, A., 2007. Research methods for business students. 3rd ed. New Jersey: Pearson Education. Saunders, M., Lewis, P. and Thornhil, A., 2009. Research methods for business students. 4th ed. New Jersey: Pearson Education. Sekaran, U. and Bougie, R., 2009. Research methods for business. 5th ed. Chichester, West Sussex: John Wiley& Sons. Szabla, D., 2007. A multidimensional view of resistance to organizational change: Exploring cognitive, emotional, and intentional responses to planned change across perceived leadership strategies. Human Resource Development Quarterly, 18(4), pp. 525-58. Appendices Appendix 1: Semi Structured Interview Pro-Forma 1. Based on your experiences, what are the perspectives of HR practitioners during corporate merger? 2. Based on your experiences, what are the issue you faced during corporate merger in your company? 3. What insights have you offered during corporate merger process of your company? 4. Do you believe downsizing is an unavoidable option for companies involved corporate merger process? Kindly explain your answer. 5. Do you believe top level management undervalue role of HR practitioners in corporate merger process? Kindly explain your answer. Appendix 2: Transcript of Interview 1. Based on your experiences, what are the perspectives of HR practitioners during corporate merger? Answer: I believe HR practitioners start working after the corporate merger process and they focus mainly on operational issues regarding human resource management process. 2. Based on your experiences, what are the issue you faced during corporate merger in your company? Answer: Developing proper performance management issue and downsizing employees who would not fit in the merged corporate structure were key issues that I faced. 3. What insights have you offered during corporate merger process of your company? Answer: I developed performance management plan for the new workforce but I took help of my seniors to handle downsizing issue. 4. Do you believe downsizing is an unavoidable option for companies involved corporate merger process? Kindly explain your answer. Answer: No, it depends on macro environment condition and internal resource requirement of companies that have merged. 5. Do you believe top level management undervalue role of HR practitioners in corporate merger process? Kindly explain your answer. Answer: It is true that role of HR practitioners in corporate merger process was undervalued previously but today, the situation has changed. In our organization, top level management gave sufficient importance to us during corporate merger process. Read More