Human Resource Management
Introduction
In the present time, it has been a common knowledge that the business arena which we have the human resources can be developed to create a source of competitive advantage, as long as the policies and practices for managing the individuals are combined with the strategic goals and objectives. Strategic human resource management insists on the relevance of determining the relation between the human resource policies and the strategic goals of the organization (Bird, A. and Beecher S. 1995). Post-merger integration is a process where persons from several organizations are able to cooperate when transferring strategic capabilities, this happen in several steps varying from procedural, physical and managerial.
The strategic human resources management is relevant in an organization to cater for the desires and planned talent advancement that is necessary in the application of a competitive strategy and acquiring the goals of the organization.
An organization is termed to as competitive when it consists of capabilities, resources, relationships and satisfactory decisions that enable a firm to add on to its opportunities and eliminate threats ((Becker, B.E. & Huselid, M.A. 2006). According to Porter, he argues that the management of human resources can far to assist a firm to acquire competitive advantage through declining of its costs, improving quality, increasing the sources of product and service differentiating or either (De Noble 1984). For an organization to acquire competitive advantage by application of human resource management on its activities it requires a strategic planning. This article provides a lay out of the varied forms of strategies, the appropriate methods to determine the best strategy as well as the implications they are composed of.
For one to acquire a successful integration following a merger, it becomes important the varied forms of integration there are varied forms of post-merger integration; procedural, physical and managerial and sociocultural integration.
Procedural Integration is composed of joining systems and procedures of the companies merged at the operating, and management control as well as strategic planning. This form of integration is designed to make things similar and create a single standard work procedure. The standardization of procedures makes it possible to communicate between acquiring and acquired organizations. It is similarly able to advance productivity and minimize the cost or processing of information.
Legal and accounting Integration: This is the most basic of the procedural task, which is composed of integration of legal aspects of the merging partners via the transfer of ownership title. It involves two optional procedures; the pooling and purchase method. The pooling method analyses assets of merging partners and is necessary when the functions to be performed by the merger involved bundling the assets and divesting at a higher value in the market. The choice to consider is based on the function of the merger, terms of the merger, nature of the purchasing arrangements and the desire to advance the balance sheet structure in accordance with the necessary application of the price-earning multiples as well as multiples.
Functional Integration involves the transfer of management control systems and procedures from one organization to another. One of the organizations involves highly developed, and effective as well as transferable systems for doing several tasks like inventory, costing and order processing among several others (Harris, L. Ogbonna E. 2001). This is at times disruptive. It involves the collection new data, altering of the format, redesigning of several procedures and adjusting of the structures.
With the merger between the TI and M & C, there was an attempt to create a complex planning and budgeting to the poorly run M & C organization. This resulted to numerous problems that involved a decline in performance, resistance from M & C staff to acquire new procedures, lack of appropriate input as well as bench marks to enable the budget system to function properly in the new environment and to change the trend of long term objectives to advance the short term objectives (Darwish Tamer K., March 2009). The factors lay in the available appropriate and working departments, effective implementation of new information techniques and also working personnel to establish the newly merged system. Commitment in its application is quite necessary.
Strategic Integration Unit (SBU) is composed of running the newly acquired business like a free profit center and joining it to the corporate world strategic planning system. It is composed of the establishment of a new SBU with a wide range of guidelines for its task in the corporate world and its objectives for the future. The newly established is expected to create a strategic plan and establish certain strategic programs to attain its goals. The SBU integrated does not require any alterations in the operating level. Majority of the production and market operations go on as they were before the integration.
Physical Integration follows the procedure integration; it is composed of production techniques, R & D projects, plant and equipment as well as real estates. This form of integration is takes a lot of time and involves a lot of work; according to a study over 400 steps are needed to acquire the equipment and its maintenance following the merger of Pennsylvania and New York central Railways. A common problem in most integration is the reallocation of the assets when sharing resources.
Sociocultural Integration involves managers from varied levels as well as operational personnel, it is based on the assumption that managers have about their organizations as well as its surroundings. It is best described using the Organizational Frame of Reference (OFOR). OFOR consists of assumptions, information and mental maps that are applied when making decisions by the managers.
The factors to consider which strategy to choose are based on the varied forms of mergers described above which are not recommended in any form of merger, but lay in a personal choice of the partners. It is necessary to determine the maximum degree of integration at each situation. One should consider; the objectives of the merger and the size & form of merging companies.
There are varied forms of objectives of the merger. A merger is normally a substituent of a strategy for the desire of growth or diversification. A merger can similarly be based on unrelated business and motivated by the want to advance its price or earnings or also the growth of the sales with without any desire to share resources. The needs based on these two instances men that the desire of the post-merger would vary.
Size & form of merging companies is necessary when it comes to merging; the bigger the size the more diverse and intensive the integration problems become. The Du Pont-Conoco is a good example of this where the merging was large with problems attributed to it. Each and every partner has his or her own problems; the mergers are enhanced when the merger occurs (Cynthia A. and L. Mark Lengnnick-Hall 1988). The large company is big that is becomes hard for the individuals to operate it. The nature of the merger is reliant on the nature and extent of the post-merger integration of the organization.
In the Implication of Post-Merger Integration; Most of the mergers and acquisitions, similar to organizational transitions, are impacted by several changes in the structure as well as cultural that may lead to a rise in stress, anger, disorientation, frustration, confusion and fright on the staff (Aguilera, R.V. & Dencker J. 2004). Uncertain among other negative emotions could lead to negative results in the organizations; minimal commitment and productivity, high level of dissatisfaction and disloyalty.
In the earlier stages of the merger or acquisition there is a high turnover; as seen in the M & A process. This is as a result of the uncertain situation that prevails amongst the employees; the employees are uncertain of the next course of action in the organization and at what the time scale the changes will happen. Aspects such as job security, responsibility and salary are the key issues of concern. This calls for the utmost speedy communication from the start of the process (G.D. Olive 1983; Maria Alaranta and Maarit Vilijanen n.d.). There comes about situations where unorganized staff loss becomes high, these results to a high cost of recruitment and retraining.
On the brighter side the ICT sector is expected to grow fast, with increased information professionals, high development needs this should happen in situations where there are high expectations of the organization production. The merger similarly adds favour to the challenging work gotten by allowing an expansion of personal knowledge and experience.
Consequently, mergers have their varied forms of implications to the employees as well as the organization, it is therefore vital to take into consideration the past and future effects before doing the merger. All the same most organizations have the best in their mind when theses doing mergers.
Conclusion
The adoption of a strategic human resources management it has to incorporate the human resource with the strategic aspect related to it. This presents a view that human resources are necessary to attaining competitive success (Maalik Nadeem 2009; Shrivastava Paul n.d). There are bound to be opportunity costs related to this. The human resource consideration is relevant to determine the strategic state of the organization; an organization is bound to become poorly competitive when compared to other firms with higher flexibility. Consequently, the connection that exists between human resources management with strategic management may be overemphasize the matters related to human resources in strategy formulation.
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