Tips for How to Manage During a Merger

Mergers are not an occasion: they are a process, and it is important to understand how such processes unfold and the concomitant stress factors that are brought about by the change. During a merger, staff can feel overstretched and overburdened. A logical output of this is that neglect of normal business operations occurs. There are various management strategies recommended in the literature which can be put into place to ensure that such overload and neglect does not lead to failure of the merger.

Mergers are also particularly complex in terms of change management. The human emotional and behavioral issues are but one element of the three essential elements required for successful change, the others being strategy and execution. In a merger the sensitivity to these various elements required exceeds that of other change situations. Change management in merger situations is a quantum leap away from managing a new production project or changing systems within an organisation.

It is thus important to understand that in mergers, scale and complexity are the dominant factors while time may not be a significant concern. When an organisation is in the midst of change, different departments and subgroups can typically be in different phases at any given time. Individuals also experience change differently from one another. Furthermore, individuals and subgroups do not always progress from one phase to the next in an orderly sequence and may sometimes get stuck in a particular phase. Thus, managers need to understand the various phases of change to be able to prepare for what is typically expected in each phase and the characteristic responses from staff.

Many people resist change, particularly if they do not understand why the change is being introduced. Resistance to change can hinder adaptation and progress. Change of the magnitude of a merger usually has a negative impact on employees, at least initially Employees usually have no say in the matter and so this change is not of their own making and is thus feared. Because there is no personal ownership of the decision, managers have to work hard to ensure some buy-in to the change. There is a greater challenge for managers to respond to implicit or deferred resistance as these efforts are usually more subtle, including loss of motivation and increased absenteeism.

If managers handle these people issues well, the new organisation can emerge with a stronger set of capabilities and a more robust attitude towards change. If managers fail to resolve people issues, the new business may well be held back by in-fighting at the top and confusion and low morale at the bottom. The merger experience shapes the climate and culture of the emerging organisation. It is thus essential to take positive steps to ensure that the 'soft' issues of culture, values, behaviors and working styles help rather than hinder the change.