Targets Acquisition of Bed Bath and Beyond
Identifying and Overcoming HR Challenges during Merger and Acquisition Activity
HROB*4060 Human Resources Planning
March 22nd, 2013
The goals of mergers range from reducing the number of competitors, to access of new products (Belcourt et al., p 330). Statistics show that 80% of new product developments fail (Howells, 2011), partly due to challenges and conflicts with human resources functions. Mergers and acquisitions are the fastest way to enter new markets. “It is estimated that 1/3 of all mergers fail due to faulty integration of diverse operations and cultures,” (Chhinzer, 2013). Therefore, the success of a merger or acquisition lies in the ability to guide, motivate, retain, and effectively use employees, and rarely has anything to do with financials. Mergers and acquisitions cause insecurity, lower levels of satisfaction at work, less affective commitment, and a loss of trust in the firm (Belcourt et al., p 329-330). In one study, it was found that declines in job satisfaction resulted in costs to the employer of approximately $17,000 per employee (Fairfield-Sonn et al., 2002). The loss of productivity stems from employees being afraid to make a mistake, resentment in the merger, and dealing with rumours about the merger (Belcourt et al., p 330).
As future HR professionals, it is important to recognize the issues that HR faces when dealing with a merger and acquisition and strategize ways to overcome these issues. Target Canada is looking to acquire Bed, Bath, and Beyond (BBAB) Canada in a friendly takeover. Target entered the Canadian market in 2011 through the acquisition of leaseholds from Zellers (Target buys Zellers leases, 2011), and is looking to diversify its’ talent pool. They are looking to acquire the expertise of BBAB’s top management, knowledgeable and experienced front line employees, and supplier and distribution relations.
Reasons to Acquire BBAB Bed Bath and Beyond Canada represents an amazing
HROB*4060 Human Resources Planning
March 22nd, 2013
The goals of mergers range from reducing the number of competitors, to access of new products (Belcourt et al., p 330). Statistics show that 80% of new product developments fail (Howells, 2011), partly due to challenges and conflicts with human resources functions. Mergers and acquisitions are the fastest way to enter new markets. “It is estimated that 1/3 of all mergers fail due to faulty integration of diverse operations and cultures,” (Chhinzer, 2013). Therefore, the success of a merger or acquisition lies in the ability to guide, motivate, retain, and effectively use employees, and rarely has anything to do with financials. Mergers and acquisitions cause insecurity, lower levels of satisfaction at work, less affective commitment, and a loss of trust in the firm (Belcourt et al., p 329-330). In one study, it was found that declines in job satisfaction resulted in costs to the employer of approximately $17,000 per employee (Fairfield-Sonn et al., 2002). The loss of productivity stems from employees being afraid to make a mistake, resentment in the merger, and dealing with rumours about the merger (Belcourt et al., p 330).
As future HR professionals, it is important to recognize the issues that HR faces when dealing with a merger and acquisition and strategize ways to overcome these issues. Target Canada is looking to acquire Bed, Bath, and Beyond (BBAB) Canada in a friendly takeover. Target entered the Canadian market in 2011 through the acquisition of leaseholds from Zellers (Target buys Zellers leases, 2011), and is looking to diversify its’ talent pool. They are looking to acquire the expertise of BBAB’s top management, knowledgeable and experienced front line employees, and supplier and distribution relations.
Reasons to Acquire BBAB Bed Bath and Beyond Canada represents an amazing
References: Belcourt, Monica., McBey, Kenneth., Hong, Ying., Yap, Margaret (2013). Strategic human resources planning (5th ed.). United States of America: Nelson Education. Bramson, Ruth N Chhinzer, Nita (2013). HROB*4060 Human Resources Planning course notes on mergers and acquisitions. Retrieved March 20, 2013 from Chhinzer, Nita (2013, March 15) https://courselink.uoguelph.ca/d2l/lms/content/home.d2l?ou=123364. Corporate Profile (2013) Corporate Social Investment (2010). Next Generation. Accessed March 13, 2013. Retrieved from http://www.nextgeneration.co.za/corporate-social-investment-a-strategic-approach-to-csi- initiatives/. De Roeck, K. & Swaen, V. “The Role of CSR on Employees’ Post Merger Organizational Identification.” Louvain School of Management. (2010). Retrieved from http://www.uclouvain.be/cps/ucl/doc/iag/documents/WP_De_Roeck_01.pdf. Fairfield-Sonn, James, John R. Ogilvie, and Gerard A. DelVecchio. "Mergers, Acquisitions and Long-Term Employee Attitudes." The Journal of Business and Economic Studies 8.2 (2002): 1-16. ProQuest. Web. 13 Mar. 2013. Howells, Richard (2011, July 12) News Releases (2011). Bed Bath and Beyond Investor Relations. Accessed March 13, 2013. Retrieved from http://phx.corporate-ir.net/phoenix.zhtml?c=97860&p=irol-news&nyo=1 Napier, Nancy K Target Buys Zellers (2011, January 13). CBC News: Business. Accessed March 13, 2013. Retrieved from http://www.cbc.ca/news/business/story/2011/01/13/target-zelles- takeover.html.