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Merger Failure within the Integration Process & the Contributing Extent of Human Resources

Másdóttir, Heiða Kristín LU and Spoljarik, Maja LU (2016) MGTN59 20161
Department of Business Administration
Abstract
This thesis investigates the role of the Human Resource (HR) departments in the success or
failure of the Merger or Acquisition (M&A) process. Through M&As, companies aim to gain
strategic advantages by obtaining another company’s core competences, buying their
biggest competitor or building a stronger organization by merging with another. In contrast
of the high quantity of M&As conducted each year, the success rate for M&As is very low.
Previous research has shown diverse factors contributing to either the success or failure of
M&As but the majority of these factors are connected to human relations. Nonetheless,
companies appear to neglect them.
The researchers have done a literature review to investigate existing knowledge on
... (More)
This thesis investigates the role of the Human Resource (HR) departments in the success or
failure of the Merger or Acquisition (M&A) process. Through M&As, companies aim to gain
strategic advantages by obtaining another company’s core competences, buying their
biggest competitor or building a stronger organization by merging with another. In contrast
of the high quantity of M&As conducted each year, the success rate for M&As is very low.
Previous research has shown diverse factors contributing to either the success or failure of
M&As but the majority of these factors are connected to human relations. Nonetheless,
companies appear to neglect them.
The researchers have done a literature review to investigate existing knowledge on
this subject. Therefore this is a conceptual study which focuses further on these contributing
factors but with an emphasis on the role of the HR department and what it can do to
eliminate the negative impact of these human factors. Data collection was performed
through semi-structured interviews with the HR department of a bank in Iceland as well as
with researchers in the field of M&As to investigate the role of HR further. From the
extensive literature review and interviews combined five themes emerged: lack of
communication from executives to employees on how and what is to come, the need for
acculturation of clashing organizational cultures, the inevitable turnover of workers, the
mental stress and anxiety that M&As put on employees, and the resistance to change which
can threaten the outcome of the whole process.
Our hypothesis is: If HR departments take the significance of these factors seriously
and address them all the likelihood of a successful M&A will increase significantly. We
further suggest steps that HR departments can follow to help with that process, such as
inter-organizational communication, stress management seminars, meet & greet events for
employees of both companies, and team building workshops to target new composition of
teams. (Less)
Please use this url to cite or link to this publication:
author
Másdóttir, Heiða Kristín LU and Spoljarik, Maja LU
supervisor
organization
course
MGTN59 20161
year
type
H1 - Master's Degree (One Year)
subject
keywords
Mergers and Acquisitions, Human Recourses, Success & Failure, Integration process
language
English
id
8887831
date added to LUP
2016-08-11 14:34:14
date last changed
2016-08-11 14:34:14
@misc{8887831,
  abstract     = {This thesis investigates the role of the Human Resource (HR) departments in the success or
failure of the Merger or Acquisition (M&A) process. Through M&As, companies aim to gain
strategic advantages by obtaining another company’s core competences, buying their
biggest competitor or building a stronger organization by merging with another. In contrast
of the high quantity of M&As conducted each year, the success rate for M&As is very low.
Previous research has shown diverse factors contributing to either the success or failure of
M&As but the majority of these factors are connected to human relations. Nonetheless,
companies appear to neglect them.
The researchers have done a literature review to investigate existing knowledge on
this subject. Therefore this is a conceptual study which focuses further on these contributing
factors but with an emphasis on the role of the HR department and what it can do to
eliminate the negative impact of these human factors. Data collection was performed
through semi-structured interviews with the HR department of a bank in Iceland as well as
with researchers in the field of M&As to investigate the role of HR further. From the
extensive literature review and interviews combined five themes emerged: lack of
communication from executives to employees on how and what is to come, the need for
acculturation of clashing organizational cultures, the inevitable turnover of workers, the
mental stress and anxiety that M&As put on employees, and the resistance to change which
can threaten the outcome of the whole process.
Our hypothesis is: If HR departments take the significance of these factors seriously
and address them all the likelihood of a successful M&A will increase significantly. We
further suggest steps that HR departments can follow to help with that process, such as
inter-organizational communication, stress management seminars, meet & greet events for
employees of both companies, and team building workshops to target new composition of
teams.},
  author       = {Másdóttir, Heiða Kristín and Spoljarik, Maja},
  keyword      = {Mergers and Acquisitions,Human Recourses,Success & Failure,Integration process},
  language     = {eng},
  note         = {Student Paper},
  title        = {Merger Failure within the Integration Process & the Contributing Extent of Human Resources},
  year         = {2016},
}