Behavioral Resistance and a Smooth Merger
Organizational Theory and Behavior BBA 3451-13L
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 satisfaction and uncertainty (Schraeder, 2001).
Addressing employees’ concerns is a great way to gain their trust and support. I propose to hold town hall style meetings, hosted by upper management, to communicate our goals, and address rumors heard through the grapevine, and in the lunchroom. The company can establish an employee hotline to allow employees to call and voice concerns or questions. Employee surveys, or questionnaires can collect information on how they perceive the process is going. Responses gathered by these surveys can even be used to identify and publish future benchmarks. Accurate communication about the change process enhances management credibility and employee reaction to change. It also provides information on how the change process will take place and its consequences (Saruhan, 2014).
In particular, communicating a strong message of unity to our newly acquired employees is paramount. I propose that we get senior management form the small company to reassure those employees that they will fit in after the merger. These managers are better equipped to deal with these individuals’ feelings and personalities. Furthermore, a company event such as a retreat, or social gathering is advised, so that employees from both companies can meet and perhaps exchange ideas, and get to know one another. Once the merger has taken place it is crucial that all management continue to meet with our employees and display an open, caring organization that is concerned with their well-being. Teamwork
Once our objectives are out in the open, management, both top and middle will need to stay engaged with employees to improve perceptions and organizational commitment. I propose middle management recruit seasoned employees to act as change champions, promoting the merger transition throughout the company (Schraeder, 2001). This can be accomplished through the creation of work teams assigned with...
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.
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