Online Assignment – Your

Homework Help Partner

(We’re faster than your deadlines)

Subject : Strategic Management

Topic: Effect of Mergers on Employers,

Employees & Customers.

Effect of Mergers on Employers,

Employees and Customers

Building Support Systems and Communication Plans

Abstract

This abstract builds a communication plan to tackle

problems faced during a merger. The case in point being

the merger of Princeton File Cabinets, a manufacturer of

file cabinets and office supplies with Sauer Incorporated, a

multinational conglomerate. It outlines the difficulties and

ways to tackle threats and insecurities faced by

employers, employees and customers, costs involved and

goals and objectives to keep in mind during the

uncertainties of a merger. The paper includes a detailed

plan and alternate options to help the merged organization

sail through the transition smoothly.

Scenario:

You are the chief executive officer for Princeton File

Cabinets, a manufacturer of file cabinets and office

supplies. Your company has recently merged with Sauer

Incorporated, a multinational conglomerate. The merger

poses numerous potential problems for you and the

employees of Princeton.

Many of your officers and middle management personnel

have expressed concern over their job security. They are

worried that Sauer will install its own management

personnel. Many rumors are circulating. The fears of

management-level personnel need to be addressed. Your

job is also tenuous, since Sauer has replaced key people

after several other mergers and takeovers.

Many of Princeton's customers have expressed concern

over the merger. Your industry is highly competitive, and

there is a real threat that many of your long standing

customers will seek a more stable supplier. They must be

assured the quality and availability of your product line will

remain as consistent.

1. What is the objective/goal of your plan?

The objective of my plan is as follows:

• Target smooth assimilation of processes, people,

management styles and work cultures of both the

organizations

• Create a smooth, open and transparent

communication system so that rumors can be

eliminated as much as possible

• To convey to management-personnel that the

objective of the merger is to harmonize both entities,

that is Princeton File Cabinets and Sauer

Incorporated for improved performance and results of

the overall company benefiting everyone and making

them understand why the change is needed

• To ensure that the employees of Princeton File

Cabinets get reassurance from management-level

personnel with the right communication and

confidence in this change and make them feel secure

about minimizing their losses—loss of control,

positions, monetary losses etc.

• Make employees see the ‘Big Picture’.

• Prevent employees from unproductive behaviour as a

result of a negative thinking towards the merger by

building support systems through a ‘Transition Team’

to help them sail through the change.

• To convey to customers that the company, though

now merged with Sauer Incorporated, will maintain

the quality and availability of its products. The loyalty

that it has consistently shown over the years, which is

evident through its long-standing customers will be

intact through the same amount of dedication and

service that Princeton File Cabinets has always

adhered to.

• Try and eliminate ‘merger stress’ as much as possible

2. Who is/are your targeted audiences (stakeholders)?

The stake holders that need to be addressed through the

communication are the management and employees at

every level from janitors and housekeeping to executives

and management.

The customer also needs to be addressed as the merger

will make them doubt the stability of the company that they

have been dealing with. They need to be assured that the

products and services that Princeton File Cabinets have

been offering will remain at the same standard in terms of

quality and availability.

3. What messages will be directed to each stakeholder

group, and what communication processes/methods

will be used?

Each group will be dealt with in a separate manner as they

feel threatened by different aspects of a merger. A merger

affects every part of the company, both acquired and

acquiring. Hence for Princeton File Cabinets, it is

important that it reassures all its stakeholders in order to

grow and not let the merger and its difficulties damage the

reputation that it has built over the years. Below are the

stakeholders with descriptions of how they must be

tackled:

• Management- The prime message that will be

directed to the management are the objectives of the

merger. Why did the merger happen in the first place?

Was it financial troubles or a plan for both the

companies to grow profitably together. The

management will be made to understand the ‘Big

Picture’ and try and visualize it. They need to be able

to see the building and not just the laying of bricks.

The message conveyed will also make them feel

responsible to keep the company together in this

phase of transition. They should be effective leaders

who can convey to the employees of Princeton File

Cabinets about the happenings at the top-level, so

that they can bridge the gap that can sometimes be

created during a merger.

The tools used to communicate all this to the

management will be cross-cultural meetings,

leadership training sessions and motivational

speakers who will help management tap into their

core-skills that is leadership and crisis management.

Cross-cultural meetings will help management

understand the long-term and short-term objectives

and goals of the merged company, helping them

decide their individual benefit as well as those carried

over by the company doing well.

Taking them out for a retreats will be an excellent idea

as it will help them understand the objectives better

by being in a stress-free environment. It will also help

them feel that the company cares about its

management and assist in team bonding.

Leadership Training sessions will act as a gentle

nudge in the right direction. It will leave them feeling

positive and energized, to motivate them to sail

through times of difficulty.

The management should also be able to put together

a ‘Transition Team’ which will consist of trusted

employees representing every level, who have

excellent people skills and can smooth over situations

to benefit the company. This transition team should

be able to carry the communication plan forward and

be able to address every part of the organization.

• Mid-level employees- These employees have to be

dealt with in an extremely transparent fashion. No

amount of communication during a merger can be

considered ‘over-communication’. Tools such as

newsletter, regular e-mailers with updates and open-

meetings giving them a realistic picture about their

benefits, salaries and job security will be conducted.

Reducing the gap between management and

employees will eliminate the need for rumors to arise

and spread to a large extent. It will help the

management in building credibility with the

employees, which in turn will affect the customer base

as these employees are the ones directly in touch

with the customer.

Team-building exercises will be conducted regularly in

order to give employees the confidence that the

company views them as a whole and not as

individuals, reducing fear of layoffs. With a fair

amount of attrition expected, Princeton File Cabinets

will help employees to move on with resume services,

severance packages in certain cases etc. as it will

build goodwill in the industry through word of mouth

and also with retained employees. These team-

building sessions which will include games, physical

activity etc will also help with morale-building and

reduction of ‘merger stress’ such as increased

sickness, low productivity etc which are all a result of

negative thinking.

• Low-level employees- These employees will be

addressed by someone from their own ranks, who is

trusted by both the company and these employees,

as they will relate much more to them than a ‘suited-

booted person’. It needs to be communicated to them

that only who they report to or the name of their

company is changing, and will not affect their day-to-

day work. Care will be taken to ensure that they feel

like an important part of the process and not someone

who is on the periphery of the merger. It is also

necessary to talk to them about their salaries, benefits

etc, as this is their prime concern.

Tools used for these employees will be flyers, notices

etc. along with regular visits and meetings within their

unions if existing or meetings will be especially

conducted interspersed with visits from management.

• Customers- Outdoor communication such as

hoardings, pole kiosks will be used for customers, the

main proposition being something like ‘Different

name, same company’ to put it simply. Also direct

marketing tools such as personalized e-mailers,

leaflets, brochures etc will be sent out to make them

feel like the company is focusing on each and every

one of them and wished to continue their long-

standing relationship. The merger should seem like

an endeavor that has been undertaken to be able to

serve them better with improved products and

services.

4. What is the proposed timeline?

The proposed time-line is one year divided into two parts.

The first six months, will be intensive and the next six

months will be determined by the learnings of the first six

months and a step down or step up depending on that.

5. Are there any costs associated with your plan?

Yes, there are costs associated with my plan. The costs

include time costs, manpower, monetary costs, as well as

cost of productivity. For example, the Transition Team will

require manpower, training sessions will include speakers

from within the company and outside which will require

monetary expenditure. These sessions will take time and

ultimately reduce productivity in terms of hours put in by

employees. Also due to the low morale and apprehension

within the employees, productivity will be relatively lower,

hence creating a cost on productivity. The retreats will

include monetary costs as well. Communicating with the

customer, the most important cost will result in advertising

expenses, but direct marketing costs will be relatively

lower than outdoor advertising, hence emphasis will be on

direct marketing as it involves a closer association with the

consumer as well as lesser costs. These will be the costs

associated with tackling the problems faced due to the

merger, but they must be treated as a long-term

investment on behalf of the merged company.

6. How will you measure the success of your

communications plan?

Forums for feedback will be open for employees to put in

suggestions and complaints anonymously. Also

counselors to help employees deal with merger stress will

be asked to keep track and notice behaviour trends in the

organization, but withholding names under all

circumstances. Also rate of attrition and productivity scales

will be an indicator as to how well the communication plan

is working.

7. What is/are your alternative option(s) if your plan is

not successful?

1. The first option in case of plan not being successful

will be a thorough understanding of why it failed and

since an ‘education and communication’ approach did

not succeed, a ‘participation approach’ will be put in

place which means those who oppose the change

can be brought into the decision making process.

Assuming that these individuals are rational people,

who can make a meaningful contribution, their

involvement will reduce resistance, get commitment,

and put a fair decision-making process in place. The

negatives will also exist in this case, that is wastage

of time and a possibility of coming to a poor

conclusion that will not benefit the organization.

2. If my plan is not successful, a more aggressive plan

can also be practiced which would reward employees

for accepting change with direct benefits such as

incentives, higher chances of retention in case of

downsizing etc. and removal of unwilling elements

from the process that have high chances of leaving

and spreading damage. This helps in the lessening

the impact that negative influences have on other

employees.

Thank You

Online Assignment – Your Homework

Help Partner

We’ll be glad to help you

Mail: homework@onlineassignment.net

Website: www.onlineassignment.net

Live Support : Live Chat 24*7