Question

MERGERS AND ACQUISITION

DEUTSCHE BANK AND BANKERS TRUST

Deutsche Bank was in the process of strategic transformation from a German bank to Global organisation but lacks sufficient present in the USA. Ed acquired Bankers Trust to address this and was particularly interested in the investment Bank Alex Brown acquired by Bankers Trust 2 years earlier.The success of the position has been largely attributed to the pre-integration period or courting phase. Here during the due diligence period the period of time between announcing and closing the m&a deal, Can any pendant cultural assessment exercise was commissioned by Deutsche Bank senior management. The cross organisational perceptions of employees revealed that:

1.Deutsche Bank employees did not feel the acquisition of Bankers Trust will enhance their business.

2.The integration of Alex brown and Bankers Trust had not been managed effectively causing internal conflict and a loss of identity among Alex Brown employees.

3. Bankers Trust felt that Deutsche Bank typified the traits of bureaucracy hierarchy and slow decision making that are associated with German companies.

This finding led senior management to:

• Enhance employee communication to close what was perceived to be a validity information gap by sharing the Rationale behind the acquisition.
• Name the merged company in the USA. The Deutsche Bank Alex Brown Investment Bank to Reinforced the brand identity that was one of the prime moves behind the acquisition in the first place (This led to the perception among Alex Brown employees that they had been rescued from Bankers Trust by Deutsche Bank)
• Start challenging the prevailing at the Deutsche Bank working values and embracing alternative ones.

During the integration phase: the marriage a number of HR initiatives were introduced to facilitates organizational integration:

• The establishment of an integration team comprising key executives, charged with making the tough integration decisions, one of which was the decision to ‘strip out’ those parts of Bankers Trust that could be integrated into the new business.
• Redundancy packages incorporating incentives for ‘redundant’ Bankers Trust employees to work through until the acquisition process was completed;
• Incentive scheme to encourage keep Banker Trust staff only to commit to the new organisation in order to avoid damaging employee turnover.

BRITISH PETROLEUM AND AMOCO

The merger between two large British and US Petroleum Companies has been hailed as a success by its managers because it was achieved faster and created greater synergy than forecast.As with Deutsche Bank, The management of the pre-merger phase was seen as crucial to the success. This involved the creation of an integration team who use the due diligence period to assess the potential synergies that could be produced by combining head offices and merging operating divisions.

Managing the post-merger “marriage phase” revolved around five areas:

1. Integrating areas of duplication where continuing the marriage analogy, partners analysed and dealt with duplication of assets brought into the marriage and work from current patterns of behaviour to develop and pursue desired behaviours.
2. Appointing into managerial roles in a way that creates opportunity for employees from both constituent companies. Here, for example the top 500 appointments in the new company were source 60% from BP and 40% from Amoco directly in line with thier respective share of the business.
3. Integrating systems and processes on the basis of what was considered the best practice across the constituent companies. hear integrating HR processes such as job grading and remuneration management were particularly problematic not because of any technical complexity but because of strong emotional attachments of employees to HR heritage
4. bill building new corporate culture regular meetings of the top managers were used to explain the operating philosophy of BP and to encourage socialisation and the breakdown of barriers between BP and Amoco managers.
5. regular monitoring of employee attitudes as the merger unfolded so that managerial action could be directed towards influencing their hearts and minds and obtaining full commitment to the new company.

VOLVO AND FORD

This merger between a large Swedish organisation and Huge Anglo-Saxon Corporation had to confront many cultural differences between the two. employees perceived Volvo as operating Within decentralized and participated management philosophy where teamwork and devolved decision-making were the accepted norm and where personal credibility was derived from expertise not position in the organisation hierarchy. these characteristics were reflected in the management of Industrial relation where Union Representatives and management work closely together to improve business performance. In contrast, Ford what perceived as highly structured in hierarchical, with status differential between blue and white collar workers and with a more confrontational industrial relation climate. For Volvo employees, the transitions was also more marked as they moved from a position where a Volvo represented 51% of the previous AB Volvo group to where it represented only 8% of Ford’s total business.

Structural reorganisation was a key outcome of the mergers. 2 major divisions were created. The first brought the premium products under one roof (Jaguar, Land Rover, Aston Martin and Volvo)- The Premium Automotive Group. The second Ford cars covers the more traditional mass market product offerings.

the due diligence period focus on exploring the potential for financial synergies cultural issues were not explored at this time but immediately after the merger was finalize an integration team comprising 18 matched pairs of Ford and Volvo executives was formed. They were task to work together on an equal basis to establish further synergise in specified areas such as marketing, purchasing and research. The integration team was seen as an important vehicle for overcoming cultural differences.

Case study questions

Compare and contrast the three outline cases from a HRP perspective, what are the main similarities and differences between them?

Please provide very detail and comprehensive answer.

Answer 1

In each of the three cases, it creates the impression that any HRP contemplations lie downstream from a first-request key choice to consolidate. One potential special case is the Deutsche Bank and Bankers Trust merger where it may be contended that the aftereffects of the social evaluation exercise could have brought about 'the marriage' being cancelled. Notwithstanding, we can't help suspecting that the activity was structured more to distinguish issues that would need to be tended to during the marriage stage than to decide if the merger ought to proceed or not. In each of the three cases, consideration is being paid to second-arrange key issues concerning structures.

For Deutsche Bank/Bankers Trust and Volvo and Ford rebuilding is at a corporate level while with British Petroleum (BP) and Amoco it gives off an impression of being increasingly worried about combining useful activities. In every one of the three cases there gives off an impression of being comprehension of the significance of social similarity and the need to effectively deal with any rising cultural assimilation process. This reflects worry for delicate HRP issues. There is additional proof that hard HRP issues are being pursued. For Deutsche Bank/Bankers Trust this has an unmistakable line through to cutting back/excess though with BP/Amoco and Volvo/Ford we are perusing 'cooperative energies' as doublespeak for justifying business capacities, prompting excess as a whiz

outcome.

As far as procedure both BP/Amoco and Volvo/Ford set up mix groups to help deal with the merger despite the fact that their accentuation had all the earmarks of being more on recognizing potential operational collaborations. Over each of the three cases, and especially with Deutsche Bank/Bankers Trust and BP/Amoco, where there is more detail accessible, it isn't clear what HRP forms being used to produce the HRP activities being executed.

Correspondence, a crucial fixing to fruitful mergers and acquisitions, shows up being taken care of contrastingly over the three cases. For Deutsche Bank/Bankers Trust the correspondence center seems, by all accounts, to be aimed at representatives during the seeking stage through the social evaluation practice and upgraded correspondence to close the data hole uncovered by its discoveries. For BP/Amoco the spotlight seems, by all accounts, to be on the marriage stage with various methodologies embraced for supervisors and representatives. For the previous, there were ordinary gatherings intended to breakdown obstructions among BP and Amoco directors though for the last mentality overviews are being utilized to surface issues that supervisors would need to deliver on the off chance that they are to prevail upon the 'hearts and brains' of workers. For Volvo/Ford there is no unequivocal reference to correspondence forms. In any case, the way that a social examination of the two organizations has been gotten from worker recognitions infers that some type of representative review has been led during the pursuing stage. With Deutsche Bank/Bankers Trust and BP/Amoco, there is proof of explicit downstream HRP activities intended to encourage the accomplishment of key goals while with Volvo/Ford such HRP shows up, best case scenario, to have been conceded until after operational cooperative energies have been accomplished. In spite of the fact that the combination group in Volvo/Ford was viewed 'as a significant vehicle for beating social contrasts,' there is no recommendation with respect to how this was to be accomplished.

In conclusion, regardless of the procedure being basically top-down, there is proof highlighting the utilization of 'worker voice' to give a base up viewpoint. This would surely have all the earmarks of being behind the social examination at Volvo/Ford and can be believed to be driving administration thinking at Deutsche Bank/Bankers Trust. Notwithstanding, contribution past this isn't clear in spite of the fact that at BP/Amoco it may be a piece of the contribution to setting up wanted work practices, frameworks and forms