The Role Of HR In Managing Organizational Change: A Case Study Of DeWaal Pharmaceuticals And BioHealth Labs Merger

Cultural Issues in Merging

In this report, a complete understanding of the merger of two companies will be described in regard to a different conflict situation. Both the DeWaal Pharmaceuticals and BioHealth Labs is going to merge with each other, and in this context, different organisation changes can occur which can hamper the daily work. Cultural issues are one of the important factors that need to be highlighted properly because both the companies are from different countries. This report will also highlight the role and responsibilities of the HR management in merging. Various theories will be discussed for a better understanding of the future development of the company. 

DE Waal Pharmaceuticals is an established European drug maker based in Netherlands and Bio Health labs is also an established drug maker headquartered in the north of New York City are going to merge in recent days. As both companies made the wide range of drugs, counter pain relievers and AIDS medicines this merge evolve the business opportunity in the global market but there is some confliction which may arise:

• As both of the companies from the different countries have different regional languages, one of the problems may appear at the time of communication between employees.
• From the cultural point of view both the companies have a different culture, and for the employees, it will be quite fascinating to know the mentality of the employees and communicate as a whole team.
• As both, the companies from different countries racism and dominating mentality may arise in the organisations’ atmosphere.

Hofstede model of organisational culture may clear these hurdles and continue the success in the competition of becoming the best drug manufacturer in the global market.

One of the major tasks for the companies will be to give the same respect and priorities for all of the employees instead of priorities own company beliefs, ideologies and practices. The power should be distributed equally to all the designation of DE Waal Pharmaceuticals and Bio Health labs (Hofstede, 2017). Both the companies should assign the team leaders, or team manager from the benefits from the team point of view instead of individual and team members also need to respect the team leaders and work as per their advice.

Fig 1: Hofstede cultural model

Source: (Hofstede, 2017)

The effect of differences in male and female values in the culture may lead the companies to fail. So the companies need to value the male and female from the same point of view (Mazanec et al., 2015). Both the companies need to look into the domination of male employees if it arises and gives the female employees the same respect in the major decision making.

Both the companies refer to an atmosphere in the organisation where individuals share their views and ideas to take part in the productivity of success. Most of the time in these scenarios employees share a healthy relationship and take care of each other when it required.

Role of HR in the Merging Process

Both the companies need to train their employees on how to respond to the unusual and unforeseen circumstances (Bakir et al., 2015). Organizations have to prepare their employees to adjust in uncomfortable situations and also try hard to avoid these situations. 

This term refers to that the employees need to look into the attachment with the organisation instead of short-term objectives. Sometimes employees need to think from the organisations’ point of view instead of profit or image of individuals and should have a steady approach to fulfil the expectations of management.

DE Waal Pharmaceuticals and Bio Health Labs after merging several issues can be originated and management especially the human resource management needs to facilitate the proper management circulation and communication with the employees. Several management theories are there which can be helpful in the circulation of the process. Maslow’s hierarchical needs are one of them which can describe the basic requirement of the employees in a pyramid shape.

 

Fig 2: Maslow’s hierarchical needs

Source:(toyanov, 2017)

According to the diagram, there are five factors or basic criteria that can be beneficial for every employee to mitigate issues between top management and employees.

Physiological needs: the first factors that are in the base position of the pyramid is the physiological need of the employees like food, place, and drink shelter, home sex and many more. Such basic demands need to be met first to transfer to the next level (toyanov, 2017).

Safety needs: safety is another issue that an employee must have to get from the management in the office culture and also in their life through its career. Management must need to ensure the proper law, health security, stability in life.

Love and belongings: the personal relationship is also important in this context which is placed in the third level of the pyramid where Maslow highlighted the interpersonal relationship to the work motivation. After merging, both the company and top management have to facilitate the proper work environment and structure where the employees can get the healthy support from their family and friends.

Esteem and needs: the fourth stage is the esteem needs where every employee expected to gain in their career and achieve respect from co-workers and management (Tanner, 2015). Proper career growth can motivate the employees and dignity.

Self-actualization needs: personal value and self-fulfilment is another part of the hierarchy of needs where everyone desired to be experiences and potential in their work field proper promotion, suitable wages and many more can be the best practice of this (Rasskazova, Ivanova,  & Sheldon, 2016).

Theories to Aid in the Merging Process

Above described theory of Maslow’s needs to be implemented after merging where cultural barriers and language issues are the main reason which can hamper the entire process. After merging the policy will be changed and many employees will be terminated due to poor performance. Top management needs to facilitate the above describe five stages to their employees so that they can get their basic needs.

Another theory of Henry Fayol of management describes the entire principles of employees in their workplace.

Division or work: Top management should need to divide the task according to specialisation to maintain the quality.

Disciplines: every individual in the workplace must have to maintain the disciplines such as proper behaviour, respect to each other, obedience and many more (Shafritz, Ott & Jang, 2015). After merging different cultural and language issues will be arrived, but proper discipline can resolve such issues.

Unity of command: there must be a good leader or supervisor who can guide the team in a proper direction. More than one team member can lead the scene towards the conflict.

Scalar chain: after merging proper hierarchical structure is must need to facilitate the significant communication between authority and employees.  Merging can lead the changes in the authority, but the organisation must have to focus on viable communication for the proper work.

Equity: Equal distribution of the work and other services must need to be facilitated because merging will lead the unequal distribution due to the cultural disparity (Hatchuel & Segrestin, 2018).

Stability of tenure: Retention of the employees is needed after merging because when an employee get the job security, it will lead them to achieve the basic need for their life and dedication can be increased easily.

Beside this, there are more other factors which Fayol recommended for the top management and employees which can help both the company to reduce the cultural disparity and fair management process.  After merging of DE Waal Pharmaceuticals and Bio Health Labs, a hectic situation arose where management to employees both need a new communication way to bringing the systematic work culture.  

New people will join the company from different nations as a result of merging, but cultural disparity and personal harassment due to racism can occur. Top management needs to fix it by facilitating proper communication and policies (Angwin & Meadows, 2015). Besides this, both the company need to make a viable strategic plan for the organisation to minimise such issues. 

Maslow’s Hierarchy of Needs

As DE Waal Pharmaceuticals and Bio Health labs are the two companies from different countries problem may arise from the cultural, language point of view. The selection process for the company also can be quite hectic as the merge is so new.  

• Understand of power is one of the key points of any merger or acquisition and both the companies DE Waal Pharmaceuticals and Bio Health labs have to take care that how to use a powerful position. Both the companies need to justify the reason about who will take the responsibilities for a dominant position, and the companies need to make a hierarchy model achieve one goal instead of looking at the success or profit of own company. Every employee in a company should take responsibility for their work and the benefits or rights will enjoyed equally by every employee in the hierarchy model.
• DE Waal Pharmaceuticals and Bio Health labs are two companies from different countries, and one of the major problems will occur from the language or communication point of view. To work better and be in the competition in the global market the employees need to communicate with each other properly so the companies should hire an interpreter or choose a single language to communicate.  
• As both, the companies are from different countries the cultural ideologies, belief and practice also different. So the companies look into this matter with a priorities manner. Companies should refer to an atmosphere where the employees are comfortable to share their point of view from cultural aspects, and it will gain the success in the competition of the global market. Male and female employees should have the same rights in the major decision making for the company.
• Companies should follow a long-term relationship with the employees to complement the merge successfully. The training process for the employees should have one goal and work as a team will be one of the goals. Employees should respect their team leaders and follow their advice. Team leader and team managers should complement the employee’s point of view and the quality to extract the best from the team members. Employees should have the attachment with the companies and leaders motivate the employees to understand the new structure, customers, process and products.
• The selection process is one of vital role to play in merging situation. Companies should understand the circumstances and not to hurry to start the new process and structure. Senior managers of the companies should not look through the lens of their own culture in the process of selection. Whatever the goal it is the selection process should be in a flow where the first level of appointment should help the second level of selection, and the HR policies should complement it. Fairness is one of the critical points to make a successful selection process, and by a well-planned and broadly communicated process, it can be achieved. The Management should have a complete overview and knowledge of their desired goal.  

After the merging of the two companies DeWaal Pharmaceuticals and BioHealth Labs, HR has a huge role which can help both the organisation two get the valuable benefit from all direction. It is very natural that after merging a mess situation has been working like poor communication, understanding and many more and that directly can lead the failure of the merging decision (Zhou, Fey & Yildiz, 2018). HR department can organise the entire process to make the decision successful. The HR maintains a proper leadership role in term of merging.

Evaluation of the organisational culture of both the companies is essential for the growth of the company and HR must need to explore the platform where both the organisational culture can meet smoothly. Managing the employees in such a scenario is a big deal for the HR, and they must need to know about the view of the employees of both the companies (Vasilaki et al., 2016). A smooth transition is needed for the process that can be achieved only by providing a proper work environment and facilities.

Beside this HR department must have to figure out the possible outcome of the merging. After the collaboration of DE Waal Pharmaceuticals and Bio Health Labs, HR needs to understand the demographic view of every employee to avoid the cultural harassment (Brewster, 2017). If any problems found, then it must need to mitigate as soon as possible because it can take the massive shape of confliction due to weak communication in the early stage of merging.

This is very natural that after merging of the DE Waal Pharmaceuticals and Bio Health Labs different issues can be arise as both managers discussed while dividing the role of the work but HR department must have to evaluate the infrastructure and possibilities of changing roles, because if employees did not accept it in free mind it could lead towards the complete misunderstanding.

Motivating employees: the main role of the HR is to motivate all the employees of both the organisation because the underlying psychology of human revealed that an employee could face mental and psychological harassment due to cultural dissimilarity and these chances are high for the merging. Proper training can build up a viable communication between the employees. Besides appropriate job security, sufficient wages, safety policy and plans and many more can be futile.

Fayol’s Principles of Management

Few recommendations that the HR department can implement:

• Clearing the exact role of every employee.
• Selecting the right people for the right job.
• Evaluating the work progress of every employee to understand the future communication.
• Proper communication between management and employees is needed to ensure trust to establish the new structure.

Suitable planning: beside the employee manage, HR also needs to engage the proper strategic planning for the company because merging will allow the company to plan differently with more resources (Glaister, 2014). In such scenario utilisation of the resources to meet the goal is vital and HR must need to engage in this process purely. 

Fair recruitment: in the new company after merging will need more potential employees, and a fair recruitment process and job design must need to be created for the future development. Besides this development of the different employee-friendly policies to retain the experience employees is also in the hand of the HR.

By the Hofstede model theory, the companies will able to solve the problem of cultural aspects as DE Waal Pharmaceuticals and Bio Health labs are from different countries and they have different cultural practice. This model will help these companies to understand the employee’s cultural stand and solve the problem of communication between the team leaders and the team members. To understand the comparison and the contrast between two other nations, Hofstede cultural model theory is one of the easiest ways. Understanding the nation’s cultural practice and beliefs will help two companies to merge successfully (Beugelsdijk, Kostova & Roth, 2017). The theory will help the companies to understand the responsibility for power and what will be the main reason to motivate employees and their point of view.

Maslow’s theory will help the organisation to understand their employees physiologically, and by following this theory, companies can make a good and healthy long-term relationship with the employees. As per the Maslow’s theory, equal distribution of work must be taken care of the companies as the merging will lead to the unequal distribution due to the difference of cultural aspects (Stoyanov, 2017).  This theory will help the companies to understand the importance of hierarchical structure to facilitate the communication between the management and the employee and it will also help to understand the importance of one leader instead of more than one. One of the key points which slow theory refers is to understand the basic physiological needs of the employee, and if the management follows this, it will lead the merging to a success.

Beside these two theories, Fayol theory also essential to understand because this theory refers to how to reduce the cultural disparity and necessity of fair management process. New people will join the company after the merging but to due to the difference in cultural aspect racism and personal harassment may occur. Fayol theory will help the top management how to fix these problems by facilitating proper communication and policies (Peaucelle, 2015). Senior management should know how to conduct a fair recruitment process for the company and to help newly appointed employees to understand the cultural aspect of the merge situation. Fayol theory is one of the easiest and fastest ways to understand the importance of new communication in the hectic situation of merging. Fayol theory will help the companies to understand the importance of dividing the work among the specialised employees to bring the quality of the product.

HR’s Responsibilities in Ensuring a Smooth Transition

Conclusion

From the above discussion, it can be said that conflict situation can be happened any time after merging due to poor communication and lack of stable management. Obviously after merging organisation policies will also be changed which can impact negatively to the employees. Cultural disparities can be another factor that can lead to the complete failure of the regular work and also indirectly can cause of the organisational failure. Different theories like Hofstede cultural model, Maslow’s hierarchy, Fayol management theories can be useful for both the companies to manage the situation. HR will play a vital role to organise the different direction with a strict hand so that proper communication between authority and management can be established.

References

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