Question

Throughout this course, you will review scenarios involving Company A, which has been acquired by Company B. Company A was founded in 1956 in Mobile, Alabama. The average age of its workforce is 57 and it is comprised of 40% Caucasian and 85% male. Company B was founded in 1997 in San Francisco, California. The average age of its workforce is 35 and it is comprised of 45% Caucasian and 50% male.

These two companies have been staunch competitors in the marketplace for several years and the employees of Company A are resentful of integrating with their former rival. There are many strategic and ethical challenges involved in this acquisition. A few of the goals of the acquisition project are listed below:

Managing the Communication and Information Sharing:

The company wants to keep employees informed of how the acquisition will impact them.

The company wants to be sure that they provide enough information to satisfy the employees, but not provide so much that the employees feel overwhelmed.

The company wants to be sure that the timing of the communication matches their execution of the changes within the two organizations.

Managing the Consolidation and Changes:

There is no doubt that there will be layoffs as a result of the acquisition. The company wants to do what is best for the acquisition in a way that inflicts the least amount of harm to the existing employees.

The company wants to make the decisions about who to layoff in the fairest way possible.

The company wants to try and limit exposure to potential discrimination (age and gender) stemming from the layoffs.

Managing the Relocations of Some the Employees:

Another impact of acquisitions is that employees may be asked to relocate in order to maintain employment in the newly formed organization.

The company wants to manage the expenses and potential disruption with the relocations.

The company wants to assess relocations verses hiring new employees locally.

Let us look at the role and responsibilities of HR managers regarding managing the company’s goals related to the recent acquisition.

Instructions:

You have a wide variety of employees encompassing different ages, genders, and ethnic backgrounds represented in these two companies. As a Strategic HR Director, your goal is to create a workforce that will effectively move the newly formed company forward.

Now, address the following issues:

Identify all of the information you would need to effectively manage the three goals above.

Identify the challenges and potential issues related to implementing the three goals above.

Develop recommendations for strategies to address these challenges and help the newly formed company meet its goals.

Answer 1

All three goals are kind of inter-related and super important for the future of merged company.

First thing first, the new company's HR has to know the new strategy of the merged organization. There has to be a solid overlap between the operations of two companies as both were competitiors. So, every layoff decision has to be taken accordingly to get cost savings by cutting dowm redundancies across the operations and supply chain. Based on work profile, HR has to monitor the past performance track record of employees for retention or layoff decision alongwith keeping the relocation expenses in mind. The key challenge is to how to communicate the required changes to the employees so that they don't feel fearful of losing the job. HR has to make sure that the company is doing all the best efforts to retain maximum people and trying to find new roles and opportunities in case of overlapping roles.

HR needs to communicate high level plan of action to the employees of both the companies so that they feel engaged with the company and there is no loss of productivity.