Mergers and Acquisitions

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Introduction

As a result of the extreme competition in the marketplace in the current world, Mergers and Acquisitions (M&As) are becoming universally practiced strategic options for many organizations worldwide to still remain in the market instead of going underground (going underground??, You mean the company goes bankrupt or?). This helps them to come together to help them (English!) achieve evolving profitable prospects in the world. Objectives for coming together include growth, diversification and achieving economies of scale.

A merger entails the joining of two establishments into one while an acquisition involves the buying progression of a corporation by another, where only one of them will have the control power of the new consequential group (De Hilal, 2013). Mergers and acquisitions are amongst key commercial approaches which multinationals use to multiply, diversify, or amalgamate their commerce (Rottig, 2007) for them to expand the value expected by the shareholders. Coming together of two or more companies is more valuable than operating as separate corporations which are the motive behind mergers and acquisitions. Prosperous M&A helps in aggregating the market share, fundamental structural aptitudes, understanding, and proficiency (Kongpichayanond, 2009). As noted (Sanda, 2011), the best-favored strategy that is used by most firms to enhance great market growth and overcome competition is the  M & A as it warrants rapid penetration of new marketplaces while lowering entrance hazards and expenses.

Though M & As is a well-organized way to grow into new marketplaces, incorporate new expertise and to modernize, their accomplishment is not guaranteed, many fall short of their stated aims and objectives. Various studies have acknowledged the need for corporations to thoroughly address human resource concerns and activities in their M & A undertakings.

Numerous corporations participate in M & As by giving consideration to the conversion of the operational, legal, and financial components of mergers and acquisitions but not the human mechanisms of their managerial structures (Sanda, 2011). Thus, companies often focus too much too intently on cutting cost, increasing revenues so much that they forget to assess the impact of the M&As on their workforce and their perception of the whole process neglecting the opinion that a better understanding of human resource in the transition and integration stage could help the companies succeed. It is thus vital for organizations to recognize the view of employees under the purview of M&As administration. This is principal because they are the support of every prosperous business since they make up the workforce and deliver the services. Investigators and philosophies link the Resource-Based Models have attested that human factor is important in the delivery of amenities. This implies that the fundamental reason for success and failure of mergers and acquisitions are human resources i.e. personnel and behavioral issues, blends of cultures and philosophies, as well as a set of guidelines and techniques.

Effects of Merger and Acquisition on employees of the acquired corporation

Mergers and acquisitions have an incredible consequence on the corporations that are involved in the deal, but this study focuses on the consequence on workers of the assimilated company (you mean the company that has been taken over – English? and the achievement aspects of the merger and acquisition grounded on activities and planning executed by the purchasing company.

Mergers and acquisitions could be reflected as brands of organizational modifications with the purpose of joining two or more distinct organizations into one as stated by Georgio (2014).

Research Question

There is one Research Question! The professor wants us to have one and explore topics around it that refer to the Research question.

In my document to you it says: Research Question: How to keep staff engaged after post-merger and avoid further pitfalls? If you think there is a stronger question, let’s discuss!! But we do want to find solutions to the issues wh staff are not engaged after mergers!

 

Further topics around it may be explored!

The inquiry interrogations of the study are identified below:

• The general perception of employees’ about M&As management by American (why only American) companies
• The employees’ anticipations of their role in the process of M &As management
• What are employee challenges in the management of M &As
• What employees’ think can be done to improve management of M &As

Literature review

In the recent times, a number of companies turn to fall on M&As as a means to expand possession margins. Conversely, handling change and its consequence on workforces in M&A progression is deliberated as the biggest trials that companies encounter since it encompasses management having ideas of their employee’s prospects, improbability and pressure in order to reduce the influence of opposition to change. During the M&A progression staffs experience

disturbance as a result of an increase in doubt and stress. Subsequently, the firm can be adversely affected depending on how well it is ready to quickly counter and accomplish the impression of workers’ views of its doings and performance (De Hilal, 2013).

The human factor is key to addressing the problem since it is accountable for the extraordinary proportion of letdowns when two businesses combine or when one buys another. Although many companies have acknowledged the important role the human factor plays in the victory or failure of the M&A procedure, administrations have a tendency of undervaluing its significance. The organizational change that is part of the M&A process usually causes negative reactions and resistance among employees and also increases uncertainty and stress. Doubt and trauma is due to the fact that the workforces which are involved in a M&A practice are unable to quantify the real effect of the practice in relation to their upcoming job functions in the new group, the likelihood of keeping their occupations or being laid-off, what administrative culture is going to prevail and what type of adaptation will be prerequisite of them (Bordia, 2004).

Study objectives

The goals of the study are:

• Assess the overall perception of employees’ about M&As administration by American companies
• Assess employees’ prospects of their role in the progression of M &As management
• Assess employee challenges in the management of M &As
• Assess what employees’ think can be done to improve management of M &As

(should be the result of the qualitative survey) – see document I attached)

 

The significance of the study

Due to the growing recognition and adoption of M&As in the American business as a tool for the revival of most businesses it is therefore key that organization incorporates and appreciate their human resources in all the stages of M&As. The main significance of this study is to disclose the likely opinion of employees before and after M&As (the qualitative study will only explore the opinions of the employees after the M&A) and whether their views even matter to the victory or failure of M&As. The analysis in the study can contribute to the field of strategic management as a viewpoint of employees and human resource management. The policymaker can reflect this view as an input in policy preparation. Additionally, the study will form the basis for further research to the general public and thus contribute to knowledge on the case which would be most beneficial to students.

Methodology

This comprises collecting data and examining the information collected. This segment, hence, presents the research approach, design, qualitative and quantitative methods, secondary and primary data, sampling method and people, data gathering tool, and data management/ examination and demonstration.

Research Approach

Qualitative research encompasses analyzing and interpreting scripts and talks to realize important designs vivid of a specific phenomenon.

The quantitative approach entails gathering statistical information; unveiling an opinion of the relationship between theory and research that is often deductive. Quantitative research methodology attempts to establish formal relationships between related variables (Forbes, 2005).

This study will use both research tactics. (which study are you referring to here?)

 

Research Design

Conferring to (Aaker, 2016), exploration strategy is the comprehensive outline that gives a guideline in the execution of an investigation study towards the attainment of its objectives. There exist four research designs namely exploratory, descriptive, explanatory and experimental (Uma Sekaran, 2016). This study will use the descriptive research approach to examine and analyze employee’s perception of mergers and acquisition management in the American business space.

Sampling Technique and Population

A non-probability sampling design in the form of purposive and simple random sampling technique will be used to gather data from respondents

 

 

Data Collection Instrument

According to (Donald R Cooper, 2008), two main methods of data collection can be eminent

• interviewing
• Self-administered questionnaires/surveys. (it will be a questionnaire as attached in the assignment given to you)

 

Data Management/Analysis and Presentation

For statistical analysis, we will use the Statistical Package for the Social Sciences (SPSS) version 17.0. (which statistical analysis are you referring to here)?

Study Delimitation

A proposal of this research work is to be taken in the USA ) (no in Europe!) with the range of the study being limited to Fintech Industry, an American company operating in America that have undergone mergers and acquisitions and thus do not include all companies operating in the US.

The quality of the tested population will be taken from the company; all-encompassing will be managers and all staff that will be casually selected hand-picked to make up a sample size of a hundred (100). As a hypothetical research, the sample size so determined fulfills the minimum rules concerning the depth of the study.

 

 

 

This study has the following limitations

The foreseen limitations as a tradition of most exploration studies such as finance, time and access to respondents and their prejudices may be about to happen.

Time constraint is also a limiting factor to this research but as a researcher, time management is a very key component in carrying out the research work.

Organization of the study

This study is comprised of five subdivisions. (do not understand what do you mean here)?

Chapter one comprises of the overview of the whole reading. Chapter two is a literature review which shall review relevant literature in respect of various studies relevant to this study. The design and methodology that would be applied in the research process would be addressed in chapter three. The last two chapters, four and five, would capture results and discussion, and summary, conclusion, and recommendations of the research, respectively.

References

Aaker, D. A. (2016). Marketing research. Hoboken, NJ: John Wiley & Sons, Inc.

Bordia, P. (2004). Uncertainty during organizational change: Is it all about control? European Journal of Work and Organizational Psychology, 345-365. Retrieved from European Journal of Work and Organizational Psychology.

De Hilal, A. G. (2013). Literature review to develop a study on how the human factor can Influence the success or failure of mergers & acquisitions.

Donald R Cooper, P. S. (2008). Business research methods. Boston: McGraw-Hill Irwin.

Forbes, D. P. (2005). Measuring the Unmeasurable: Empirical Studies of Nonprofit Organization Effectiveness from 1977 to 1997. Nonprofit and voluntary sector quarterly, 183-202.

Kongpichayanond, P. (2009). Knowledge Management for Sustained Competitive Advantage in Mergers and Acquisitions. Advances in Developing Human Resources, 375-387.

Rottig, D. (2007, August). Successfully Managing International Mergers and Acquisitions:. Retrieved from A Descriptive Framework, International Business: Research Teaching and Practice: http://www.aibse.org/wp-content/uploads/2012/02/07Rottig.pdf

Sanda, M. (2011, June). How is the Firm Dealing with the Merger? . Retrieved from A Study of Employee Satisfaction with the Change Process: https://www.diva-portal.org/smash/get/diva2:987038/FULLTEXT01.pdf

Uma Sekaran, R. B. (2016). Research methods for business : a skill-building approach. United Kingdom: John Wiley & Sons.