Running Head: HUMAN RESOURCE MANAGEMENT
Human Resource Management
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 is based on 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.
Literature Review
In the past decades, there has been advancement in the matters related to the management of individuals. Important attention has been directed to human resource management, which is a special way to the management of persons (Becker, B.E. & Huselid, and M.A. 2006). This area of study has not been limited to criticism termed to as “micro analytic”. In the past period, researchers have developed the importance of human resource management in the advancement of an organization’s performance through strategic measures.
In the current world there has been an intense change in the environment, globalization, and inventions and innovations to issue competitive goods and services, as well as the ever changing demands of the clients. For effective and efficient competition, organizations have to set new priorities. The priorities of the organization are strategic and less ventured towards traditional human resources objectives like staffing, training and appraisals. Strategic priorities lie in team-based job designs, flexible workforces, quality improvement practices, employee empowerment and incentive compensation.
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. Porter, argues that the management of human resources can go 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 view of the varied forms of strategies, the appropriate methods to determine the best strategy as well as the implications that accrue.
To acquire success following a merger, it becomes important to apply the varied forms of integration; procedural, physical and managerial and sociocultural integration.
Procedural Integration
It involves 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.
Functional Integration
This 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 collection of new data, altering of the format, redesigning of several procedures and adjusting of the structures.
The merger between the TI and M & C, showed 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.
Strategic Integration Unit (SBU)
It involves running the newly acquired business like a free profit center and joining it to the corporate world strategic planning system as well as 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
This 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.
Factors to consider which strategy to choose
The varied forms of mergers described above 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.
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
This 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.
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 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.
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. The human resource consideration is relevant to determine the strategic state of the organization; an organization is bound to become poorly competitive. Consequently, the connection between human resources management with strategic management may overemphasize the matters related to human resources in strategy formulation.
Bibliography
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Harris, L. Ogbonna, E. 2001. Strategic Human Resource Management, Market orientation, and Organizational Performance. Journal of business research, 51, pp. 157-166.
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Maria Alaranta and Maarit Vilijanen, n.d. Integrating the Is Personnel after A Merger –Managing Challenges and Opportunities. Retrieved on 5th August 2011 from http://csrc.lse.ac.uk/asp/aspecis/20040003.pdf
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