HRM ASSIGNMENT

HRM ASSIGNMENT

HRM ASSIGNMENT

Introduction

Despite the recent boom in international mergers and acquisitions (IM&As) driven by globalisation, technological change and deregulation (Schweiger and Goulet, 2000), statistics show that the outcome of mergers and acquisitions (M&As) is mostly disappointing (Overman, 1999; Schuler and Jackson, 2001, Schweiger, 2002). It has been argued that the challenge of M&As is the management of people (Antila, 2005) and the human resource (HR) function and HR managers are constantly encouraged to play a more “strategic” role in organisational change processes such as IM&As (Björkman and Søderberg, 2003).

a) What is HRM?

Many studies address the importance of HRM issues in mergers and acquisitions (e.g. Buono and Bowditch, 1989; Hunt and Downing, 1990; Cartwright and Cooper, 1992; Ashkenas et al., 1998; Marks and Mirvis, 1998; Galpin and Herndon, 2000; Evans et al., 2002; Schweiger, 2002) suggesting guidelines for the sound management of HR in M&As. Schuler and Jackson (2001) contributed the literature by presenting a framework of the critical HR issues in the different stages of IM&A process in pre-combination, integration, and post-integration.

Further, Faulkner et al. (2002) have stated that HRM policies have significant effect on acquirer's ability to get the best results of the new subsidiary. Though, the importance of HR issues in M&As is widely recognised only few studies have actually looked at the roles played by HR in these processes.

According to Jeris et al. (2002) HRD was not involved in initial decision-making to merge or acquire, though post-deal HRD initiatives were perceived as critical indicators of success. The findings by Björkman and Søderberg (2003) are in line with these findings. Their study reveals typical problems in organising and managing HR issues and illustrates how the HR function is easily given non-strategic role in these processes. On the other hand, the study by Antila (2006) describes how HR actually has a strong administrative and employee related role within the IM&A process and if the HR manager is involved from the beginning in pre-combination stage of the process he or she also plays a strategic role throughout.

These studies have increased the understanding of the roles played by HR in the M&A context, but provide only a limited explanation of the reasons affecting the roles played by HR managers in IM&A processes. The present study addresses the existing research gap by investigating further the question of HR managers' roles in IM&As by exploring which factors contribute to the HR managers' involvement in the IM&A process.

b) Importance of HRM in organisations

Only few studies address the reasons behind the roles of HR in the M&A context. A further consulting survey revealed that most of the HR managers felt they did not have enough knowledge of M&A processes to be able to contribute value to discussions about M&As. According to Björkman and Søderberg (2003) top management's low expectations with regards to the strategic contributions of the HR function seem to have contributed to the limited HR role in post-merger change process. Furthermore, organising the work of HR to satisfy the expectations of ...