Merger and acquisition integration management

This study recommends absorption integration process as the most viable solution to the issues. Absorption will allow efficient management of the business by centralising the decision making process as recommended by the administrative management theory. Absorption will bring about common structures, systems, policies and procedures and a common organisational culture in the business. Introduction Acquisitions and mergers (M&A) have become a common occurrence in the contemporary business world as one way of edging out competition and stamping significant market share and presence. They have become a common way of establishing foreign direct investment. The principle of tenure stability of the administrative management theory by Henri Fayol would help to explain the circumstances under which the M&A has fallen into in terms of people issues.

The standard urges that staffing ought to be done under proper planning of human resources (Wren, Bedeian & Breeze, 2002). Human resource planning is the analysis of the human resources needs of a company in a case of changing operations and creating the necessary operations to ensure the needs are satisfied as required. Human resource planning is vital because it assists the administration to enrol and retain quality personnel, limit worker turnover and top off the resulting opportunities. Moreover, the management can utilise the workforce to its best and help them to develop in their careers more clearly. The scientific management theory (also known as Taylorism) developed by Frederick Taylor urges the management to overlook any tradition that is preserved for its sake or to protect particular workers and their social status (Musah, Al-Hudawi, & Paramboor, 2016).

Such traditions, according to the theory, would be expensive to the company in terms of productivity and functionality in the long term. At this point, the companies’ management must be willing to scrap all that which may cause problems to the new company (Vancea, 2011). It is clear that both companies are through their top leaders are working to retain as many employees as possible. However, it seems that most of the energy invested in keeping some of the employees is just done for mere sake of it (Light, Kidd, De Monaco, Freeland, & O'Sullivan, 2001). The process of integration can be analysed along these issues (Jemison & Sitkin, 1986). Lack of Planning The two companies did not carry out proper planning of the integration process.

The time between the declaration of M &A and its fruition is normally called due diligence; a period that marks the beginning of the integration planning. There is a developing insistence from institutional investors calling for progressively thorough due diligence. More prominent justification is required from directors for their basis in seeking to obtain an acquisition in order to survive opposition associated with there being administrative motivation forces (Oliveira, 2009). The management has gone too far in ignoring the importance of communication between them and the employees who are the pillars and determinants of the success of the merger and acquisition. Resistance to Change Change in any merger and acquisition case is one of the most difficult subjects to get right. According to Light, Kidd, De Monaco, Freeland, & O'Sullivan (2001), most of the employees in the case of DeWaal and BioHealth M&A have shown that they are not so ready for changes in values and organisational culture; an issue that has led some of them to fear for their tenure of office (Appelbaum, Karelis, McLaughlin, & Henaff, 2017).

The process of integration has actually bred the resistance as a result of poor communication and improper handling of issues among the people. Employees have developed fear that they will most definitely lose their job or they would be placed under new management which does not understand how they operate. At this point, DeWaal and BioHealth are pressed between making some hard decisions and ensuring proper management of the human resources (Light, Kidd, De Monaco, Freeland, & O'Sullivan, 2001). Outsourcing will allow the management to concentrate on other tasks to ensure proper integration of the merger and acquisition. After the company assigns tasks to external service providers, it shares the remaining burden of the workers. This enables the company to build up its internal team and use them more proficiently The M&A should ensure proper communication within all levels of management.

Proper communication is essential in ensuring that people understands the need for change and their role in the change within an organisation. In this case, such employees may be limited in performance and may even end up quitting (Appelbaum, Karelis, McLaughlin, & Henaff, 2017). Recommendations for Integration Process The organisation should seek to create one entity through absorption of the smaller company by the large one. Absorption integration strategy is a case where the acquiring company fully absorbs the target company (Brueller, Carmeli, & Markman, 2016). All structures and process of the target company are integrated into those of the acquiring company. Therefore, the M&A will operate as one entity. Combining structures will help the company to operate uniformly from different parts of the world.

Also, the company will be able to communicate efficiently since the structures are well streamlined (Desrochers, 2018). Combining structures is also important in the management of the organisation since the major decisions can be applied uniformly. Policies and Procedures The management has to create new policies and procedures that are workable in the organisation. Moreover, common policies and procedures create consistency in the operations of the business (Jemison & Sitkin, 1986). The administrative theory is quite useful in resolving the dilemmas facing the company especially problems in the human resources department. The framework recommends division of labour, exercise of authority by leaders, equity, proper remuneration, centralization of decision-making, stability of tenure for employees, and ensuring discipline within the organisation (Wren, Bedeian, & Breeze, 2002). There are three important aspects of this theory that are particularly applicable to the current case.

The framework helps to understand the role of discipline within the organisation as well as equity when handling issues. The other aspect is tenure safety. The case of DeWaal and BioHealth is not different from other cases. The company is currently experiencing challenges with its human resources and integration processes. This study finds that there is poor communication and informal operations that are disturbing the integration process. Some values are at stake including the loss of quality employees and a disturbance in organisational culture. This study recommends absorption as the best integration process. net/publication/314244675_Resistance_to_change_in_the_case_of_mergers_and_acquisitions_part_2 Bodner, J. , & Capron, L. Post-merger integration.  Journal of Organization Design, 7(3), 1-20. Retrieved from https://jorgdesign.