Integration between two corporations is more difficult than simply exchanging funds for the other company’s stakes. Integration is weighed down by numerous issues that might hold back the realization of the merger if not taken care of. As a result, it is crucial to evaluate the difficulties amalgamation presents as well as probable solutions to overcome the difficulties.
The first challenge that impacts integration is the individual’s problems. Integration incorporates blending two varied work forces into one mutual unit. A sample of individual’s problem is the establishment of fresh human resources policies as well as exercises (PWC 1). In addition, the staffs of the two companies are well-versed with diverse tactics as well as the varied objectives. Amalgamating them will, thus, impact their performance and might lessen their output because of misunderstandings and unclear purposes.
The other problem that encounters the merger between Starwood and Diamond Resorts is supporting the amalgamation procedure with the deal type or thesis. These two kinds of deals are present in the course of merger; this is the scale and the scope deal. If Starwood is hesitant of the deal it desires then, it might culminate in blending the two deals, and picking a deal unsuitable to the amalgamation procedure. Scope deal need solitary undertakings that connect to be merged whereas a scale deal needs all tasks in a corporation to be combined expansively.
The other difficult experienced in the course of the merger is the degree of business cultures that the two companies ought to embrace (Dreßler et al. 1). If the companies have diverse business cultures, it clarifies that the fresh corporation will be wavering between which cultures to approve. Workers and great managers might get baffled as well as attempt to conform to their old culture that might be significant in the fresh company.
People’s problems that come up in the course of integration can be handled via inclusion of the human resources team in the merger procedure. Only great managers take care of most integration with the exemption of human resource staffs. Nevertheless, it is essential that the human resource group be included in the amalgamation procedure in advance. Human resource from the two companies will include a public-aimed integration procedure. This will guarantee that the desires of the personnel from the two companies are looked at in the course of integration as well as actions taken to make sure that they stay industrious.
Suitable configuration of the amalgamation procedure with the deal kind is essential to the triumph of any merger. The motive is that the deal picked will impact the fresh company structure, staff retention, cultural integration as well as executive selection. If all the afore-mentioned facet of the acquisition procedure are done devoid of suitable know-how of the deal, the integration is then insignificant. So to overpower this difficulty, suitable evaluation of the integration necessary ought to be done. The company ought to ascertain the apt network of both corporations as well as choose whether they ought to enact a scale or scope deal.
The finest manner to handle diverse business culture is to look at the problem in the course of the integration procedure. The corporation whose culture will be out of control need to be informed prior to striking a deal. This will let the workers of this company to get set for the adjustment in business culture. When the integration is conducted, the workers will be in a state to comprehend which culture is being embraced and, therefore there will be less misunderstandings.
Dreßler, Inka, et al. “Merged Companies: How corporate culture can be integrated.”
PWC. “Why people integration continues to dominate M&A challenges.” 2012. PWC. Web. 10 March 2014 <http://www.pwc.com/us/en/people-management/publications/workforce-integration-mergers-acquisitions.jhtml>.