In a globalized and increasingly competitive economic environment, businesses must constantly adjust and restructure to survive and grow. Radical forms of enterprise restructuring such as merger and acquisition (M&A) are a constant occurrence. Like any other forms of restructuring, M&A involves human costs and affects not only the employers and employees, but also other stakeholders. Lack of attention paid to the human dimension of M&As could prevent success and even lead to a complete failure.
Merger and acquisition are generally practised by enterprises to strengthen and maintain their positions in the global as well as national marketplace. Merger is a combination of two companies to form one, while acquisition is when a company is taken over by the other firm. EduPristine explained that M&A can occur in four situations, including by purchasing assets, purchasing common shares, exchange shares of assets, and by exchanging shares for shares.
There are numerous reasons for companies to adopt merger and acquisition. Some of the most frequent reasons are as follows:
Companies that are successful and inventive in M&A will not only create value but also develop core competence in combination management itself. In turn, this opportunity can lead to job growth over time. When the M&A fails, however, jobs can be lost and the impact on employees and society can be significant. Failed M&A is likely to result in even more negative social consequences, Schuler and Jackson’s study revealed.
The HR department, in this regard, plays a pivotal role in the process of merger and acquisition between two companies. HR plays a key role in managing all crises as well as disputes that might crop up in an organisation, as and when the process of merger and acquisition sets off. According to Schuler and Jackson’s study, here are the main roles of the HR department before, during, and after the M&A.