Mergers and acquisitions are impactful organizational decisions that lead to changes in senior management, while in turn changing company policies and working culture, as well. A research done in 1988 famously highlighted that mergers and acquisitions transfer money from workers to stakeholders, as all the employee contracts get revised in the merger and consequently, get trimmed. This time and process is used by the new management to increase company profits that go to the shareholders.
In actuality, the process hurts the employees, as in some instances, mergers lead to heavy lay-offs or downsizing, leading to a traumatized workforce. Such events have a long lasting effect on employees’ loyalty to the company as they may fear similar occurrences for themselves. These experiences leave them scared, confused and insecure at their workplace.
Some economic literature has predicted that mergers are good for employees as the process induces more investment in human resource capital and skill refreshing programs are also introduced, even more so, when the merger comes with new technology. Studies show that high quality managers give birth to high quality projects.
With mergers, often comes new technology; combine that with a high quality manager and a freshly ‘skill upgraded’ workforce; and you have a dream of super workers at your disposal, ready to conquer the world. But, this idea remains true for situations where the merger ensures an improvement in technology and an improvement in staff management, as well. Staff morale also increases if increments are offered to those who continue to work in the firm.
Even though research has been conducted on the topic of effects of mergers on employees, there is a need for studies that observe the effects of mergers on every employee individually and come up with results that can actually contest or confirm the results of previous studies. As all the research on this topic is based much more on analysis of over viewing statistics than on hardcore data, going from employee to employee, especially those involved in the process of merger, seems to be the way to go. Not to mention, much of the research seems to be too focused on the impacts of mergers on top management with little work done to assess the impact of such changes on lower management.
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