HR
must take the lead when choosing a top management team and dealing with
clashing management styles and egos when businesses are involved in
international mergers and acquisitions (M&As).
According
to a new guide released by the Chartered Institute of Personnel and Development
(CIPD), the early involvement of HR expertise – particularly in the appointment
of a post-merger integration manager and team – is key to minimising the risks
to post-merger business performance.
CIPD
international manager Frances Wilson, said the active involvement of HR
throughout the process is critical, and companies should look out for
misunderstandings brought about by local stakeholder influences, and cultural
and legal differences.
"The
result can be costly mistakes, corporate clashing and ultimately poor
integration," she said. "HR will bring a management focus to
potential problems that arise during a merger or acquisition, including
resistance to change, poor communication and declining employee morale."
The
report, International Mergers and Acquisitions, says that success in
international M&As is often hampered by:
–
A workforce that is not committed to a future with the new business
–
Poorly informed management decisions and behaviour
–
Loss of key talent
–
High levels of internal conflict
–
Focusing on internal issues and not on the strategy/marketplace/competition
–
Management time tied up on legal issues
–
Inability to attract new talent
–
Costs becoming out of control
The
aspects of management performance that minimise the risks include:
–
A purchase price that reflects the reality of likely post-merger costs and
risks
–
A clear and realistic strategy for the combined business
–
Achievement of key objectives including cost, growth, cash flow, market and
product benefits
–
High workforce morale and productivity
–
Retention of investor confidence
–
Integration at the right speed
–
Early organisation and planning
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