HR Know-how in Mergers and Acquisitions
HR Know-how in Mergers and Acquisitions
Sue Cartwright and Cary CooperInstitute of Personnel and DevelopmentLondon2000116 pp.£18.99ISBN 0-85292-634-0 (paperback)
Keywords: Change, Culture, Success
HR Know-how in Mergers and Acquisitions is an interesting and informative book which addresses an area of growing importance in the field of human resource management.
The book begins with an overview of merger and acquisition (M & A)activity in the UK and Europe, highlighting its significance in financial and human terms over the past 20 years. Pointing to the fact that about 50 per cent of M & As do not achieve the outcomes anticipated, the authors turn to the role of HRM in reducing the incidence of unwanted turnover, distress and loss of productivity. They argue for the inclusion of HR considerations during the negotiation, implementation and consolidation phases of any merger or acquisition. Their main purpose is to set out pragmatic and comprehensive HR strategies for each of these phases. They do this very well. The text is clear and accessible, and case studies of actual M & As are used to illustrate the key issues.
Chapter 2 addresses the role of HRM in assessing the degree of cultural fit between the various (usually two) organisations before a potential arrangement is finalised. The significance of organisational culture is discussed, and readily accessible sources of cultural data are outlined. The authors suggest how this data can be used to identify and engage potential problems due to different perceptions, values and practices that might exist between the organisations involved.
The next four chapters cover the implementation phase, which begins with a formal announcement of the merger or acquisition. The importance of clear communication is highlighted, especially because many M & As involve rationalisation and cost-cutting, and lead to widespread anxiety over job security and other losses. The authors discuss constructive approaches to redundancy, poor morale, retaining valued staff, training, employee assistance and the like. However, they go beyond these HR challenges to consider two underlying factors which shape human responses during M & As. The insights and information provided in these sections alone make the book a worthwhile read.
The first of the two underlying factors concerns change-induced stress. More so for M & As than for any other form of organisational change, all aspects of the job situation are likely to be affected, including job security,intrinsic elements, workload, role identity, sense of control and work relationships. Hence, dealing comprehensively with the causes of merger stress is critical to an effective HRM strategy. The second factor concerns the explicit and implicit bond, or psychological contract between employer and employee. According to the authors, M & As are likely to terminate relational contracts, which are anchored in a sense of mutual support, loyalty and commitment. Only a transactional bond, based on an exchange of effort for economic reward, remains. In a HRM strategy, transactional issues are a priority in the short term, but relational bonds need to be carefully rebuilt for the longer term health of the organisation.
The final chapters cover the consolidation phase of M & As, where the challenge for HRM is to integrate at least two structures and cultures. This is examined in terms of organisations in general, while an additional chapter is devoted to integrating across national cultures. The characteristics of people most likely to cope with relocation to another country are discussed in an earlier part of the book.
HR Know-how in Mergers and Acquisitions is a work of genuine substance, reflecting the combined research, writing and consulting experience of its two authors and other colleagues. It will interest human resource professionals, managers and management educators, as well as inspiring those who might be inclined towards further research in this area.
Judith Ann ChapmanUniversity of Western Sydney,Australia
