MGT501 Contemporary Management - Free Samples to Students

With the merging of DeWaal and BioHealth, employment crisis looms for the management of both companies. Steve, on the one hand, wanted to maintain the top cream of his company while on the other hand, Kaspar wanted his team on the board. Allison one of the director of sales and marketing had worked up that position after she had served for long as a sales representative. The problem of failing to rise above cultural differences seems to affect both Steve and Kaspar as according to Steve he asserts that his people are fit to get the thing right and done while on the other hand, Kaspar intends to have his staff at Indonesia retained and protected at all costs. Thus, it is not surprising to realize that when executive managers view people their team through the lens of culture, then there is no doubt that problems arising out of selection emanate.

The prevalent attitude that people are not like them and thus are deemed unfit becomes the slogan and the order of the day. Steve’s failure to reassure people considered vital to the organization’s success is a problem. People such as Sandy Allen left the company due to lack of clear direction of the company regarding their fate. It should have been the responsibility of the selection team to talk to such people plainly and assure them of the future opportunities in the company that would serve their interests. Steve should have approached Sandy Allen and use some kind of assurance that in the future he would need her as the successor after him. Such type of guarantee would have given Allen the morale to stay behind and wait for the perfect moment when such a position would be available.

The fear by Allison is clear about people leaving the company and weighing heavy offers from other companies. It is painful to accept that four of the staff left BioHealth due to lack of proper communication regarding their fate and many more were expected to leave due to the room of uncertainty dominating the company. Steve knows very well that even Allison who seems close and holding one of the top positions as the director of sales would in one way or another lose that position to a Dutch staff, something that made Steve uncomfortable based on his relationship with Allison. Many mergers fail to deliver the value expected by the shareholders due to the looming cultural differences and adopting of integration strategies by the human resource that is ill-conceived. With the ongoing war for talent that is well publicized, it is no surprise of the little attention dedicated to issues relating to human capital in the process of merging and acquisition.

Problems

Steve showing up for a scheduled lunch meeting without a general plan for integrating the human resource is a huge problem for both companies. Thus, Steve is acquainted with make decisions haphazardly. Steve should at least carry a plan that shows how best they would retain critical key executives through schemes such as giving them a bonus after completion of the merging process. A communication plan is also strategic in helping ease the ongoing tensions and developing a selection process to be used in recruiting the top caliber executives for the merged company while not forgetting to streamline the terms of the contract for the two companies as they are different for both the U.S and Europe.

It is evident that it is not apparent that there are no considerations that have been given pertaining the competencies of DeWaal and BioHealth emanating from its team of leaders in delivering excellent performance. The management has failed in the establishing the first phase which should have been defining the competencies of the executives together with their associated behavior predictors.

Steve inadvertently discloses to Bruce the fact that he is not happy with the executives from the Dutch company. This presents a huge problem for the merger where there is a likelihood of people favoring employees that they are well acquainted with in retaining and giving them better positions. It is crucial to evaluate executives in a manner that is open and free from any bias or malice for both companies. The primary objective here is to eliminate prejudice and keep emotions out of hand during the process of selection so that the most qualified individuals get chosen for the respective roles that suit them.

The issue of fairness seems to be another problem for both companies with Christian being not the only that is concerned about the whole point of balance. From the BioHealth’s they are worried sick about who has the most power and how that is going to impact them. However, it is through the use of an objective appraisal that the executives get to understand how to handle such an issue amicably. It provides the executives an opportunity to display their credentials in a bid to demonstrate how they suit the competencies that the merged requires.

It is unless the merged companies are entirely devoted to appointing all employees from the company, the whole process of appraisal should evaluate all the executives including the peers outside the merged companies.

The fact that Steve and Kaspar are having different views about the necessity for speed in choosing the new face of management is a crisis for both companies. Kaspar on hand is unconcerned about how slow the move is while Steve, on the other hand, feels that there is a need for urgency. It is crucial and necessary to have the senior team stabilized though a short-term assignment and had to happen as fast as possible. However, it is not enough to have it fixed in the short-term so that it can be fixed later when things spiral out of hand. It is the senior executives selected that can usher in success or failure of the merged company and thus any poor decisions made may have a long-term negative impact.

It is also not transparent about whether both Steve and Kaspar are using well-documented facts to assist them in making key decisions that can impact the operations of the new company. For instance, it appears careless enough when Steve and Kaspar meet over lunch to design a plant framework when they could be employing the use of cost analysis, quality and products to further and base such objective decisions. They could be analyzing data to derive the best answer and also to raise staff awareness that such decisions are not developed arbitrary.

Recommendation

The best strategy to be employed for the merged companies should include outsourcing services to help perform the appraisal. The use of valuable services by a team of independent external consultants can provide the much-needed expertise to the process of human resource integration, carrying out in-depth interviews and having feedback that is comprehensive. The objective goal by the external consultants enables such consultants to carry out their process without bias from internal politics, cultural or power clashes. They are best placed to make precise assessments of how a pool of executives matches the needed competencies. They may also be more innovative when it comes to identifying other functions within the company for people considered to be the company’s assets but come second during the assessments and interviews. The outsiders play a critical role in benchmarking by pointing out when the company needs to go beyond its wall in filling a position that is defined as new.

Steve made a mistake of focusing on being granted the regulatory approval and let everything else languish for months. It would have been fair enough if he appointed lawyers to handle that matter as they could provide the needed direction.

The café meeting should be strategic in the sense that Steve should have presented a plan or an outline for the selection criteria to be used. A lot of emphases should be laid developing success of the business, communication and relationship attributes. It is the responsibility of the team to debate the strategy and the methodology to be employed when selecting the top management. It should be dictated that key decisions be made such as back up alternatives for individuals who turn down offers and giving alternative jobs for people who are not among the 65 but still are needed by the company. Finally, they should provide notifications to the employees and provide them with an ultimatum of a day for them to choose if they want to stay or leave.

Steve has also failed in ensuring proper communication with his team and even with the executives based on Allison’s conversation. As the chief executive officer, he needs to act swiftly so that he can retain and maintain his top talent at the company. The fact that there are people he needs to talk before they exit the company makes him be the ideal person to lead such conversations. If many people need to be talked to such that Steve cannot handle that, then he should appoint someone to lead the talks on his behalf. Also, the company can make use of schemes such as pay stay where managers are retained as they are paid until the integration process is completed successfully.

Recommendation for both Steve Kaspar and Steve

Both Kaspar and Steve have a task that lay ahead of making sure that they have business objectives that are explicit for the selection process. For instance, it is essential to consider if candidates for both key positions will be chosen based on individual performance. Also, it is necessary to consider if there is the logic behind keeping more employees of one company in individual cases based on either geographical or functional strengths. The goal further by the merged companies should be clear and explicit for instance, is the merged company aiming to achieve a balanced quota of 50-50 split with regards to key positions. Issues such as whether a particular company may have a large number of executives based on its large size or due to its profound experience are important before making core decisions.

Irrespective of the underlying goals, selection should be made in stages. The first stage should facilitate the collection of the second stage. The process should be involved but not cumbersome and monotonous. The company is expected to interview some candidates which entail getting evaluations from even third parties. Thus, some of the talented individuals may fail to fill the immediate vacancies and as such, they ought to be managed and retained in a manner that is systematic. It is also imperative to assure the stars from both companies that they will have places in the merged company but such promises are to be made if they are to be kept. It is expected that horse trading will take place in one way or another though horse trading should come once the integration process is over and not at the beginning.

It is after finishing their lunch that both Steve and Kaspar should concentrate on creating the shareholders’ value that many mergers are seen destroying. They should narrow down their focus and worries of who has more power and further a selection criterion that will situate that new company top positions get filled with the best team for each position.

In the process of integration, speed is a critical element. It is imperative for Steve to unite the top people that they have chosen and made them the center of the selection team. However, it would be important to eliminate both Christian and Bruce in this process, though if there is a need to use their services, then serious limitations should be imposed on them. This is due to the fact Christian can’t make decisions independently and depends on a computer to make such decisions for him. Conversely, Bruce on the other hand, though he has good instincts, he behaves like a clown though he is not afraid to speak his mind to Steve and share his opinions.

It is crucial that both Steve and Kaspar forge meaningful and healthy relationships. Though engaging in healthy relations appears to be tough and challenging due to the existence of cultural and organizational differences. Working such differences will ensure teamwork and unity among all employees irrespective of country of origin.

Usefulness of management theories and practices

Management theories have been found worthy in helping to understand the cultural differences. Culture-based on theories plays a crucial role in shaping the success or failure of a newly merged company more so in the case of cross-border M&A. It is due to the cultural differences that arose between Chrysler and Daimler that saw the downfall of such a merger as the employees had varying perspectives on important issues such as travel expenses and salaries. Such cultural differences led to the destruction of Daimler and Chrysler. Thus, leaders should be in a position to inspire people to exit comfort zones and get accustomed to the organizational customs and accept any new traditions being imposed on them. Thus, management theories emphasize that leaders be in a constant relationship with their employees spending more time with them inorder to understand such employees. It is such practices that make leaders play a critical role in making people embrace a new culture.

Management theories facilitate the restructuring of the human resource. Employees are always concerned about any opportunities that arise with regards to their careers. Thus, new roles get assigned or may be transferred to new regions following completion of the merging process. This entails the Human resource conducting training for the management, counseling on an individual basis and offering professional help to the staff of the merged company. Good practices by the human resource have been linked to ensuring that the best employees are retained in both the short and long run basis. An effective human resource team is composed of representatives from both companies, and their primary role is to seek and identify resources that are not only strategic but also valuable to the company. This leads to maintaining loyalty and engagement to the merged firm and also provides employees of the combined companies a feeling of neutrality and equality.

Employees, on the other hand, are given an opportunity to develop their knowledge bank of the merged organizations. It is through the interaction of such employees that they can share knowledge of their different systems and operations. Developing and investing in trust is central to enhancing knowledge. It is unless the two sides build confidence in each other that they can reveal details about each other and this facilitates understanding each other for better cooperation.

In a competitive world such as of today, it is imperative that the company reveals its future with the customers and promise of delivering quality service, support, and salesforce as it was doing earlier. This builds the confidence among customers and makes them feels safe and secure with regards to future purchase orders. If necessary, the merged company may go a notch higher in ensuring that there is a helpdesk in place. This goes a long way in providing that the number of unsatisfied customers has been reduced while increasing the customer number and profitability.

Conclusion

In conclusion, it is apparent that mergers come along with many problems than benefits and this means that management of the merged companies have to be aware of issues such as a cultural difference and address them adequately as this can lead to the downfall of the merger. It is also fair enough if both companies can develop strategies and mechanisms to ensure that there is fairness in employing the right pool of executives.

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