International Acquisition and Merger

Question: Discuss about theInternational Acquisition and Merger. Answer: Introduction Globalization of firms has become a common trend for companies seeking to penetrate new markets. The process also aims to facilitate the increase in sales volume, enhance the development of good business reputation, facilitate the acquisition of competitive advantage over rivals, and meeting logistical demands among more. In simple terms, companies engage in the acquisition, amalgamation, takeovers; spin-offs and others as a strategy in managing operations across borders to achieve corporate goals and objectives. With the tremendous changes that have happened in the field of technology, these processes have been a success. However, inappropriate planning, administration, and coordination of after the acquisition or amalgamation results in failure and collapse of some companies. The administration at a local firm is not complicated as it is the case in multinational corporations. Switching from home to managing a range of affiliate companies international will require more commitments from the human resource department. The complexity is as a result of differences in the setting and business environment. For instance, there exist a difference in the legal systems, culture, market phenomenon, customer behaviours, and more others. The activities aim at managing organizational human resources at international level or across several countries (Able, 2007, p.67-80). The multi-cultural employees both at the corporate office and at the foreign plant have to be motivated and managed professionally by documenting policies and practices that are sufficiently flexible and considerate for employee productivity to be realized. Most importantly, the company planning for a merger has a responsibility of undertaking a series of research to unearth practical methods of executing the process in the right way. For instance, there exist differences in the forms of administration, cultural differences, and differences in the short and long term objectives. Aligning the aims of the two firms into one will require an earlier preparation. The acquiring company will be obligated with establishing training and mentorship programs in an effort of educating the employees for the new roles they will be expected to play. Therefore, the change process features as a requisite that may stifle the entire program if the management fails to address the subject (Harrison, et al. 2007). There are important issues that the administration of the parent company should note for smooth operations in the host country. The paper has therefore addressed human resource issues that the acquiring management should consider in the process of administering the enlarged business. Both the staffing, cultural, and more metrics have explicitly captured in the discussion. Among the essential strategies explored includes remuneration and reward, incentives to promote meeting targets, multicultural considerations, to mention but a few (Waldman, 2009, p. 130-132). The learner going through the paper will acknowledge all of the factors comprehensively addressed. Factors to consider by the human resource management in a merger or takeover Considerations before entering a merger or takeover The issue at hand presents us to two companies occupying different market share. Acquiring a firm that is well known to the locals for offering distinguished products and services will require consideration of the factors discussed below; Remuneration and Reward strategies: the management of the acquiring firm needs to be familiar with the currency strength of the host company bearing in mind inflation. To this effect, adequate compensation should be made to the employees to cushion them from harsh economic reality. It will notably include elements like consideration of the allowances offered to the employees. For example, Cost-of-living allowances where the management should adjust differences between the home country and abroad and housing benefits, which might range from financial assistance to offering them housing facilities (Iankova, 2013, p.82). As a matter of fact, the human resource management should observe the minimum remuneration and wages based on the countrys legislation and labour laws. Consequently, the company will avert labour cases and employees will commit all of their efforts working towards the achievement of the organization objectives. Providing incentives for meeting and exceeding targets: in doing this, the employees get motivated and are encouraged to commit all their efforts working for the fulfilment of the organizational interests. The incentives can be in the form of payment of fees for those pursuing further education, financial incentives, promotions and other forms of rewards. The rewards should base on the current economic forces of the state. Application of a fixed rate across the branches may disadvantage employees who work in unstable economy prone to inflation. Besides, the management has to adequately perform an assessment of taxes charged in both home and host country and devising ways to bridge the difference. Multi-Cultural Management: the management of the acquiring firm should consider and embrace cultural diversity between the host and mother country to avoid culture collision and resultant misunderstanding (Aguilera, et al. 2006). Culture itself encompasses many factors such as languages, religion values, and attitudes. Culture is a sensitive aspect in that a slight mess will negatively impact on the performance of the company. The products sold should not compromise cultural provisions of the inhabitants. Also, the management should ensure strategies are established to promote cultural aspects of the entire society. Contrary to which the company should prepare to face resistance. Consequently, it will result in reduced sales volume. On the side of culture, the management of the company should protect the right to culture of the host country in both religious and social matters for employees to work undisturbed. Example, their day of worship and countrys holidays should be factored in the company calendar and be observed. Some actions or words of the management of the acquiring firm might show disrespect and contempt to the employees of the hosting company (Mazur, 2010, p. 5-15). There is also a culture in the way a company is managed. It can be analysed in the style and ease of communication. The host company could believe in the philosophy of everyone is a manager and free constant communication both up and down the management structures; whereas the acquiring firm believes in protocol and hierarchy of power to dictate the form of communication (James, 2008). Therefore, the acquiring company management has to be familiar with such matter and embrace it for a smooth running of operations. The reason behind work-life balance gives the workers time to at least socialize with family members. One can get a chance to attend to family matters and fix them accordingly. Of late, some institutions have instituted programs to allow some of the staff spent at least 21 days with their family. These programs have positively to employees commitments while at job place. Therefore, cultural consideration and observation is a particular aspect that imperatively requires maintenance. At last, compliance with cultural imperatives with the new land will result in the establishment of healthy relationships hence leading to the development of customer loyalty and societal goodwill. Development of Training and Development programs: the company should invest more in training and development of its staff to counter possible underperformance due to the dynamics of the enterprise. Training is critical to ensure employees are updated and remain valid as before in the occurrence of any dynamics (Goldsmith, et al. 2009). Training programs are primarily structured to impart knowledge to the employees. Also, it aids in keeping them informed about the current work expectations and align their skills with the current technology. And the development programs empower the workers and broaden their abilities and competencies. As a result, the organization benefits by offering quality services to the clients. Development on the other side entails providing the employees with the special opportunities to grow so that they advance in their career and become competitive in the global market. It goes hand in hand with training. The growth will encourage the employees to participate in innovative activities aimed at fulfilling the organization interests. Staffing and recruitment dimensions: recruiting and staffing are paramount for a firm to realize its overall goals and objectives. It is important to a company to employ qualified and competent employees who remain professional in their duties and responsibilities. The management should recruit employees based on qualification and competence and importantly focus on the locals of the host country so that corporate social responsibility is realized. Also professionals from the host country should be given key positions in the subsidiary. And finally, should strictly follow an accepted procedure in handling employees matters relating to hiring and firing of the workers (Allan, 2013, p.33-36). Labour Laws and Legislation: with this dimension, the consideration is placed on time and shifts of work and work safety and precaution and local diversity. To start with, employees daily working hours should be as stipulated by the legislation of labour laws. Working beyond this time will be at their discretion and ought to attract overtime payment. On the job safety and precaution, the acquiring firm should ensure caution is maintained in the course of duty by its employees. Precautionary measures including equipment ought to be availed to them for safety to protect in case of hazardous materials (Fernndez, et al. 2011). They should receive adequate Compensation in cases of harm to their bodies while on duty. Finally, the management should consider local diversity in recruitment and staffing to avoid possible legal problems of being un- inclusive in job creation. The setback will be that it can end up bringing a legal battle that will negatively impact on the operations of the comp any. In addition, the employees voice and recognition should be factored. The management of the acquiring firm should support and promote people by establishing a favourable work environment. The HRM should articulate and comprehensively address their needs, concerns, and psychological contracts. Unions that act to champion for employees rights should be supported to engage and bargain on behalf of the employees. The management has to consider the geopolitical stability and Government regulations. Political matters change from one country to another and affect the operations and decisions affecting the locals to a larger extent. The management of the acquiring firm has to be careful and roll its actions and decisions along the social and political requirement of the host country. Some states may require maximization of women. Perhaps, calls for equality have always taken for granted by employers. They prefer hiring more men compared to women. Up to date, justification of the sex that performs better in an organization has not established. But the bitter truth is that both the sex are equal (Marks, et al. 2011). Also, the demographic changes of the employees are a critical area to give a focus. With globalization, the multinational company will attract workers across countries boundaries. The management has to articulate the various motivations and expectations of its workforce; what is valued by its workers and their opinions on management actions and decisions. It is important for them to remain focused and committed to their work. Finally, the management should devise an effective way of leading and managing teams and employees remotely. It can be achieved through the parent company investing in a fast and sufficient mode of communication to improve the quality and frequency of communication. And include automated or digitalized system of monitoring and getting feedback on the progress and issues affecting the employees in their course of work (Lech, et al. 2010). In fact the consideration of this factor will enable the management minimize cases of employee turnovers. Examples include computerized people human resource management that complies with employees details and contract agreement; also where they can quickly convey their message including requesting for Annual leaves or off by the documented rules and regulations. Conclusion As discussed above, the management of the acquiring firm has to be careful in its actions in integrating the two companies so that there is no friction or misunderstanding amongst the employees. The process has to be at greater extend employee focused so that their quality of lives are not affected, or they do not perceive to have been disadvantaged by the development. If anything, they need to be compensated promptly and assured of job security and opportunities for growth and development. In consideration of the explored factors, success will just come at ease. References Able, M. (2007). The Importance of leadership and culture to MA success: Human Capital Institute, p.67- 104 Aguilera, R. V., Dencker, J.C., Yalabik, Z.Y. (2006). Institutions and Organizational Socialization: Integrating Employees in Cross-Border Mergers and Acquisitions. University of Illinois: Urbana-Champaign, pp.40-41 Allan, S. (2013). Retaining talent after an MA. Training Journal, 33-36 Harrison, S., Farrell, P. (2007). Measuring Post-Merger Success: Integration Processes and Human Factors, Dainty, (4 Ed) Procs 24th Annual ARCOM Conference, Cardiff: UK, pp.6-8; Fernndez C., Groysberg, B., Nohria, N. (2011). How to hang on to your high potentials: Harvard Business Review, 89(10), 76-83. Goldsmith, M., Carter, L. (2009). Best Practices in Talent Management: How the World's Leading Corporations Manage, Develop, and Retain Top Talent. Pfeiffer, 5(7), 77-110 James, G. (2008). How to execute a merger: Retrieved October 15, 2016, from https://www.bnet.com1240313241_23-200371.html Iankova, S. (2013). Success and Failure Factors of the Mergers and Acquisitions Performance: Evidence from Bulgaria, International Journal of Economics Business Administration, vol.1, issue 1, p.82 Lech, B., Georgiades, T.J., Tomovic, C.L. (2010). The impact of Product Lifecycle Management on virtual team creation: a concept change model for heightened productivity, International Journal of Manufacturing Technology and Management, 19(3/4), 279-293. Marks, M.L., Mirvis, P.H. (2011). Merge ahead: A research agenda to increase merger and acquisition success. Journal of Business Psychology, 26(2), 161-168. Mazur, B. (2010). Cultural Diversity in Organization Theory and Practice: Journal of Intercultural Management Vol. 2, No. 2, November 2010, pp. 515 Meglio, O., Risberg, A. (2010). Mergers and acquisitions: Time for a methodological rejuvenation of the field. Scandinavian Journal of Management, no. 26, pp. 87-95; Mirvis, P.H., Marks, M.L. (2003), Culture in corporate combinations, Leading in turbulent times, London, UK:Blackwell, pp.284-301 Schweyer, A. (2008). Talent management systems: Best practices in technology solutions for recruitment, retention and workforce planning. Wiley, p.153-200 Watkin, C. (2009). Engaging key talent: Identifying fast tracking and motivating high-flyers. Benefits Compensation International, 39(1), 47-66 Waldman, D., Javidan, M. (2009). Alternative forms of charismatic leadership in the integration of mergers and acquisitions. The Leadership Quarterly, no.20, pp.130-142;