《Merger And Acquisition.ppt》由会员分享，可在线阅读，更多相关《Merger And Acquisition.ppt（26页珍藏版）》请在三一办公上搜索。
1、1,MERGER AND ACQUISITION,Basic Terms.,Merger:The statutory combination of two or more corporations in which one of the corporations survives and the other corporations cease to exist.Acquisitions:Direct purchase or combination of net assets of one company to form a consolidated company or a new comp
2、any.,2,Global cross-border M&As,value and growth rate,1988-2006,Cross border M&As valued at over$1 billion,1987-2006,Why it is done M And A is done,Mergers pursued for a variety of reasons:Economies of scale in operationsConsolidation in saturated marketsImproving competitive position through larger
3、 asset baseTwo thirds of mergers fail Largely because of inability to merge cultural and other human factors,HISTORY,In 2003 the value of M&A business in the US was worth$510,866.4,compared to 1.2 trillion in 1998.Statistics show that one of the major reasons for failure of M&As is the human resourc
4、es aspect.However,the success rate of these M&As is estimated to be a mere 30 40%.,HR Issues&their Implications on Various Stages of M&A,Stage 1:Pre Combination Identifying,forming,searching,selecting and planning.The HR implications in this phaseSystematic and extensive selection Combination which
5、minimizes problems at a later stage.,HR Issues&their Implications on Various Stages of M&A(cont),Stage 2:Combination Selecting,designing,creating,retaining and managingThe HR implications in this phaseSelecting the appropriate candidate Creating team designCommunicating the benefits of merger,HR Iss
6、ues&their Implications on Various Stages of M&A(cont),Stage 3:Solidification&AssessmentSolidifying,assessing,revising and learning.The HR implications in the integration phaseCreating and evaluating a new structure Elective leadership and staffing of the new entity The new entity must learn.,Managin
7、g HR Issues in M&A,To manage organizational stressestablish performance criteriaidentify who will stay and who will gocreate a new organizational structureassume the leadership of the emerging organization,CHALLENGES IN M&A,HR Areas will offer:,Emotional Support.Positive environment for change.Count
8、eraction to job insecurity.Reduce level of uncertainty an fostering realistic expectations.Commitment to job may be developed by showing career growth.,12,Integration process and Problems,Procedural Integration.Physical Integration.Socio Cultural Integration.,13,Managing HR Challenges.,Avoid Quick c
9、hanges at any levels.Avoid large scale reduction early on the process of amalgamation.Avoid Restructuring pitfalls.Do trim employees based on pragmatic reasons,way to do it,and better pay off compensation.,14,Address While Due-Diligence.,Communication Creation of task forces Employ a variety of comm
10、unication mechanismsEmployee Integration Integration project plan HR due diligence review Identify critical talent based on strategic objectivesTalent Retention Retention bonuses Senior level accountability,15,16,Process Of HR Due Diligence.,Reasons For failure Of M&As,Pre Merger:1)Strategic Plannin
11、g.2)M&A target concern.3)Non addressing HR Due Diligence.Post Merger or Transitional Phase:1)Time Frame and balance.2)Unanticipated Turnover.,17,Objective of HR,human resource system issues that become important in M&A activity are:human resource planning compensation selection and turnoverperforman
12、ce appraisal systememployee development and employee relations,How HR works in M&As?,The human resource issues in the mergers and acquisitions(M&A)can be classified in two phases:The pre-acquisition periodThe post acquisition periodIn pre-acquisition period HR involves assessment of the cultural and
13、 organizational differences,which includesorganizational culturesrole of leaders in the organizationlife cycle of the organizationmanagement styles,The different activities done by HR,The post acquisition activities done by human resource,these are:The difference in organizational cultureJob securit
14、yDifferences in human resource systemCompensation structure and performance appraisal systemDifferences in organizational structures Employee relations,The organizational culture,Organizational practices,managerial styles and structures are determined by the organizational culture.Employees not only
15、 need to throw out their own culture,values and belief but also have to accept an entirely different/new culture Dissimilar cultures can produce feeling of unfriendliness and significant discomfort which can lower the commitment and cooperation,whose results may develop“us”versus“them”attitude which
16、 may be harmful to the organizational growth.Cultural clash,one of the cultures that is dominant culture may get preference in the organization causing frustration and feelings of loss for the other set of employees.,Job security,Divert the focus of employees from productive work to issues like job
17、security,changes in designation,career path,working in new departments and fear of working with new teams.Causes changes in employee well defined career paths and future opportunities in the organization.Result in relocation or assigning of new jobs.This may have an impact on the performance of the
18、employees.Increased political processes that may be underway in the organizations to sustain the importance of the various individuals and departments.,Human resource systems and Compensation structure,The human resource systems vary across organizations owing to the differences in the organizationa
19、l culture,sectoral differences and national cultural differences.Hindustan Lever Limited acquiring TOMCO,the employees in TOMCO enjoyed better terms and services compared to the HLL employees compensation structure and the performance appraisal system among the organizations may also differ creating
20、 troubles one of the firms may have performance based pay while other may have higher component of fixed pay.,Organizational structures and employee relations,Since the organizational structures have different designations the acquiring organizations need to develop a mechanism to remove the differe
21、nces in the grading systems bring them at equal level.Employee relations gain more importance in the acquisitions of manufacturing units.The power equation between management and trade unions is bound to change with the acquisition.This require study of management-union equation,employee contracts,p
22、olitical linkages of the unions,compensation related clauses,number of trade union and dynamics between the unions.,HR takes control,Train managers on the nature of change Technical retraining Family assistance programs Stress reduction program Meeting between the counter parts Orientation programs
23、Explaining new roles Helping people who lost jobs Post merger team building Anonymous feedback helpline for employees,Acquisition strategy of Cisco,It devised a three step process of acquisition.analyze the benefits of acquiringunderstand how the two organizations will fit together evaluation proces
24、slooked whether there is compatibility in terms of long term goals of the organization,work culture,geographical closeness etc.integration strategy is rolled outA top level integration team visits the target company and gives clear cut information regarding Cisco and the future roles of the employees of the acquired firm,
