In global business economy, international mergers and acquisitions (M&As) have become the leading form of development for corporations which seeking competitive advantage. Despite studies and data does not clearly indicate how it can achieve so, Human Resource Management (HRM) can act as a cost-adding function in the merger and acquisition process. This paper undertakes the disregarded human part of M&As by obtaining an important strategic draft to evaluate the link between Human Resource Management and Mergers and Acquisitions. Since, international M&As are more complicated structure than local integration process, we observe contingency in national suitability which affect outcome in this process. We describe on current experimental to underline HRM roles in ways of values resources, and resources which reflect the effect of both strategic draft and national suitability in the combination phase of international Mergers and Acquisition.
1.Introduction
There are numerous researches within the HRM area and business organization to study the human side of M&As, have made studies showing the function of HRM in M&As. In particular, studies of workers concerns covering M&As which focus on how to achieve
top management turnover and acquisition relatively. (Walsh, 1988; Krug and Hegarty, 2001). Nevertheless, plenty of the existing studies among the Human Resources Management area believes the evidence of employees matters in M&As, outcoming in slight systematic assumption (Hunt and Downing, 1990; Buono and Bowditch, 1989; Marks and Mirvis, 1998) which concentrates on local M&As. Partly, because of this less attention respecting to HRM in M&As that HRM role in M&As has been planned by CEOs , compared with early studies of the M&A duration. Possibly, the reason of personnel issues in company can be associated with the M&A form that has concentrated predominantly on financial because of strategic matters in the integration duration and HRM is also the other thought in order to implement the merger process. In M&A integration, although employee issues is identified in firms, there has been surprisingly demand for HRM in order to have significant function, such as offering communication and leadership to lessen turnover, handling employee conflict and obligating the new HRM method and business culture.
The other adversity for HRM in integration process is that when comparing between local and global M&A, local M&As is much more simply than in global M&As in terms of synergies. For example, numerous HRM training is individual companies is suited by managing the challenges (Wright and Snell, 1998), merging HRM procedure from distinct organizational and national probably contexts is to cause a countless of uncertainties. Basically, we would acknowledge that the function of HRM in international M&As is notably different from M&As existing among countries because of national arena's uniqueness. However, we admit the differences between corporations in the global environment are mainly a issue of degree as highlighted by Sparrow et al. (1994). Although researches points out that many HRM exercises in international M&As are likely to converge on one single top model, which is making the function of HRM more presumable, also it reveals that other trainings applied in the integration step keep the nation-specific feature of one of the integrating companies (Child et al.,2001; Faulkner et al., 2002). Child and his colleagues also mention that the issue of integration 'involves considering not just "how much?" but also "on the basis of which practice?"' (2001:17).
Indeed, M&A integration is particularly not simple in international M&As because of the
firms undertaking acquisitions in their own national contexts. Hence, in order to comprehend how much contribution of HRM in cross-border M&As, it is significant to deem not just the
fit between M&A and HRM approaches, however also the contingencies at the national stage in the merger duration, but also in the merger duration the contingencies at the national stage. Meanwhile, we can attain an evaluation of "the fit between environmental situations, strategies that organizations put in place" (Child et al., 2003: 244).
National contexts have been classified along several aspects, such as cultural (Hofstede, 1980), legal (La Porta et al., 1998), employment systems (Marsden, 1999), financial (Zysman, 1983), economic corporation and control (Whitley, 1999). Hence, we seperate countries into two wide groups which cover social and economic dimensions of business life. In addition
we offer that, when the two merging companies associated with the same country cluster, HRM will not be the same than when the two merging companies relate to two different country cluster.
2. Literature Review
History and growth of HRM in M&As :
Mergers and acquisitions have become the one of the significant forms of increase
for companies which looking for competitive advantage in an more and more complicated and international business economy (Adler, 1997). Nonetheless, M&As are caused by several difficulties (Newburry and Zeira, 1997), with seventy per cent of international acquisitions and fifty per cent of local acquisitions, flunking to generate planned outcomes.(Capron, 1999). The importance of HRM in M&As is introduced in middle 1990s. In the last five years, the recent research by Hewitt Associates has established, in the beginning of 2004, this strategy is used by numerous companies, such as Novartis, Sony and Pfizer.
The Role of HRM in International Merger and Acquisitions:
HRM has an impact on the achievement of cross-border M&As in the each level of the duration. For example, HRM is likely to focus on making sure legal fulfillment, such as
corresponding with collective bargaining and equal opportunity. Furthermore, planning process and deal announcement can be started by HRM, such as by managing deal-making process.
We can understand how to manage key matters pre- and post- cross-border M&As duration
and learn how to handle these deliberately because of that method.
3. Aims and objectives of the Dissertation
The main goal of this research is to understand the role of HRM behind international Mergers and Acquisitions. Quantitative financial analysis and qualitative management interviews will be used. The data is going to be taken from different publicly listed, companies.
This research will analyze following questions' answers after interviewing with managers in companies :
-How does acquisition strategy affect on the role the HRM function for international merged firms ?
-Which HRM elements can lead to anticipated outcomes for international merged firms?
4. Proposed Research Methodology
Primary Data Sources
I plan to gather primary data through Interview and questionnaire method.
Secondary Data Sources
Source 1:
I will be using reliable websites on the internet.
Source 2:
Major newspapers, such as Economic Times, The Times, Guardian etc.
Source 3:
Articles from leading journals such as Harvard business review, Business Week, etc.
Source 4:
I will be reading books and using Publications from the authors in financial sector who have written about this topic and done some study on it.
Source 5: I will look into reports carried out in the field of HRM and M&As
5. Research Methods for Gathering and Analyzing Data & Information
Qualitative:
My own views and understanding of the subject and views about the hypothesis & in-depth interviews.
Quantitative:
Develop statistical representation of data collected during research. Produce an outcome through the questionnaires on the topic.
6. Project Plan
Duration/ Period
Task/ Milestone
Week 1 (20 - 26 February, 2011)
Collect general information through research sources
Week 2 - 3 (27 March - 09 April, 2011)
Organize Interviews and take out surveys
Week 4 (10 - 16 April, 2011)
Gather and bring together Primary Data
Week 5 - 9 (17 - 30 April, 2011)
Writing and discussion with administrator
Week 10 (31 April- 06 May 2011)
Revision
Week 11 (07 - 13 May 2011)
Revision and submission
7. JUSTIFICATION FOR CHOOSING A PARTICULAR RESEARCH PROPOSAL
Nowadays international M&A is one of the main organizations among global business firms however, M&A organizations generally concentrate on economically, financially and workers are often afterthought. Thus, firms have been faced many employees' problems. If global firms or companies can take full account of the people issues, the quality of management will be better in firms. I chose this topic because, in this paper, several key issues have been noted in order to understand better why we should combine with HRM and M&A in organizations.
