Unit VIII Final Project
Behavioral Resistance and a Smooth Merger
Michael Martin
Organizational Theory and Behavior BBA 3451-13L
Professor Flores
January 18, 2015
With this merger, and the total integration of the smaller insurance company into our company’s current organization structure, the focus naturally turns to continued revenue, operational synergies, and even new service concept. However, we must not lose sight of the most important element of a merger—the adjustment the employees must make to the new organization. It has been shown repeatedly that mergers of this type often have negative impacts on employee behavior, resulting in a loss of productivity, absenteeism, low morale, and low organizational commitment. Employees worry of job loss, position stagnation, and even new policies put in place due to a merger (Islam, Sengupta, Ghosh, & Basu, 2012). Employee resistance in this situation often delays the process and adversely affects the company. This proposal outlines steps we can take to minimize change resistance from employees of both companies and through the merger make the organization stronger.
Communications
The period right before a pending merger can be very stressful for employees of both companies. Communication is the key to a successful merger. By being upfront with our employees, we can change negative perceptions they may have of the merger. By removing this stressor, we may gain buy in from our employees (McShane & Von Glinow, 2013). Communication is the key to quell employees’ fears. As early as possible the organization should share pertinent information with the entire staff. It’s been shown that employees who feel the organization has shared information with them regarding a potential merger will exhibit higher organizational commitment than those who feel that the information had not been shared (Islam, et al., 2012). By sharing information early in the merger process, we can stabilize levels of job
Michael Martin
Organizational Theory and Behavior BBA 3451-13L
Professor Flores
January 18, 2015
With this merger, and the total integration of the smaller insurance company into our company’s current organization structure, the focus naturally turns to continued revenue, operational synergies, and even new service concept. However, we must not lose sight of the most important element of a merger—the adjustment the employees must make to the new organization. It has been shown repeatedly that mergers of this type often have negative impacts on employee behavior, resulting in a loss of productivity, absenteeism, low morale, and low organizational commitment. Employees worry of job loss, position stagnation, and even new policies put in place due to a merger (Islam, Sengupta, Ghosh, & Basu, 2012). Employee resistance in this situation often delays the process and adversely affects the company. This proposal outlines steps we can take to minimize change resistance from employees of both companies and through the merger make the organization stronger.
Communications
The period right before a pending merger can be very stressful for employees of both companies. Communication is the key to a successful merger. By being upfront with our employees, we can change negative perceptions they may have of the merger. By removing this stressor, we may gain buy in from our employees (McShane & Von Glinow, 2013). Communication is the key to quell employees’ fears. As early as possible the organization should share pertinent information with the entire staff. It’s been shown that employees who feel the organization has shared information with them regarding a potential merger will exhibit higher organizational commitment than those who feel that the information had not been shared (Islam, et al., 2012). By sharing information early in the merger process, we can stabilize levels of job
References: Goddin, D. (2014). Facilitating change. Training Journal, Aug 2104, 5-8. Islam, S., Sengupta, P., Ghosh, S., & Basu, S. (2012). The behavioral aspects of mergers and acquisitions: A case study from India. Global Journal of Business Research, 6(3), 103-112. McShane, S. L., & Von Glinow, M. A. (2013). Organizational behavior (6th ed.). New York, NY: McGraw-Hill/Irwin. Saruhan, N. (2014). The role of corporate communication and perception of justice during organizational process. Business and Economics Research Journal, 5(4), 143-166. Schraeder, M. (2001). Identifying employee resistance during the threat of a merger: An analysis of employee perceptions and commitment to an organization in a pre-merger context. The Mid-Atlantic Journal of Business, 37(4), 191-201.