The challenge of corporate integration

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Friday , August 17, 2007 at 2159 hrs implies involving HR from the target selection stage itself, understanding the rationale behind the deal, reviewing the target company’s compensation policy, comparing organisational philosophies, educating finance managers about the risks and costs, mapping job descriptions, and designing an appropriate transition plan.

Overall, a merger or acquisition affords a valuable opportunity for companies to review their existing systems and design new ones that are more comprehensive and serve the needs of the new entity. Vice-president, HR operations & people development, Patni, Kalpana Jaishankar believes, “Integration and implementation is more important and should not be spread over a long period of time. It should be confronted and resolved at the earliest.”

Integration planning is the stage wherein various points of contact with people from both sides are decided, highlighting processes that will take time such as the performance-management process, recruitment process, exit process and payroll process. During the implementation stage, HR is involved in all the steps, as at this stage, people integration is discussed. Herein lies the highest possibility of discord. “The key here is to remember that more communication is better than less communication,” says Chumble.

Often, M&A necessitates manpower rationalisation. “The most significant aspect of such rationalisation is to determine the business need, to communicate that need to the staff and to ensure that individual respect or dignity is always upheld in the process,” said Rajiv Singh, vice-president, HR, Geometric Software Solutions.

The core capabilities needed by an HR manager to overcome the obstacles to a successful M&A is the ability to understand cultural issues and the ability to walk the thin line between discretion and transparency successfully and look at the big picture. The management team has to anticipate and prepare for the emotional response of employees at the earliest, say experts.