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   Subject : Strategic Management
Topic: Effect of Mergers on Employers,
      Employees & Customers.




       Effect of Mergers on Employers,
         Employees and Customers
Building Support Systems and Communication Plans
Abstract


This abstract builds a communication plan to tackle
problems faced during a merger. The case in point being
the merger of Princeton File Cabinets, a manufacturer of
file cabinets and office supplies with Sauer Incorporated, a
multinational conglomerate. It outlines the difficulties and
ways to tackle threats and insecurities faced by
employers, employees and customers, costs involved and
goals and objectives to keep in mind during the
uncertainties of a merger. The paper includes a detailed
plan and alternate options to help the merged organization
sail through the transition smoothly.
Scenario:


You are the chief executive officer for Princeton File
Cabinets, a manufacturer of file cabinets and office
supplies. Your company has recently merged with Sauer
Incorporated, a multinational conglomerate. The merger
poses numerous potential problems for you and the
employees of Princeton.


Many of your officers and middle management personnel
have expressed concern over their job security. They are
worried that Sauer will install its own management
personnel. Many rumors are circulating. The fears of
management-level personnel need to be addressed. Your
job is also tenuous, since Sauer has replaced key people
after several other mergers and takeovers.
Many of Princeton's customers have expressed concern
over the merger. Your industry is highly competitive, and
there is a real threat that many of your long standing
customers will seek a more stable supplier. They must be
assured the quality and availability of your product line will
remain as consistent.




1. What is the objective/goal of your plan?


The objective of my plan is as follows:
  • Target smooth assimilation of processes, people,
    management styles and work cultures of both the
    organizations
  • Create a smooth, open and transparent
    communication system so that rumors can be
    eliminated as much as possible
  • To convey to management-personnel that the
    objective of the merger is to harmonize both entities,
    that is Princeton File Cabinets and Sauer
    Incorporated for improved performance and results of
    the overall company benefiting everyone and making
    them understand why the change is needed
• To ensure that the employees of Princeton File
  Cabinets get reassurance from management-level
  personnel with the right communication and
  confidence in this change and make them feel secure
  about minimizing their losses—loss of control,
  positions, monetary losses etc.
• Make employees see the ‘Big Picture’.
• Prevent employees from unproductive behaviour as a
  result of a negative thinking towards the merger by
  building support systems through a ‘Transition Team’
  to help them sail through the change.
• To convey to customers that the company, though
  now merged with Sauer Incorporated, will maintain
  the quality and availability of its products. The loyalty
  that it has consistently shown over the years, which is
  evident through its long-standing customers will be
  intact through the same amount of dedication and
  service that Princeton File Cabinets has always
  adhered to.
• Try and eliminate ‘merger stress’ as much as possible
2. Who is/are your targeted audiences (stakeholders)?


The stake holders that need to be addressed through the
communication are the management and employees at
every level from janitors and housekeeping to executives
and management.
The customer also needs to be addressed as the merger
will make them doubt the stability of the company that they
have been dealing with. They need to be assured that the
products and services that Princeton File Cabinets have
been offering will remain at the same standard in terms of
quality and availability.




3. What messages will be directed to each stakeholder
group, and what communication processes/methods
will be used?
Each group will be dealt with in a separate manner as they
feel threatened by different aspects of a merger. A merger
affects every part of the company, both acquired and
acquiring. Hence for Princeton File Cabinets, it is
important that it reassures all its stakeholders in order to
grow and not let the merger and its difficulties damage the
reputation that it has built over the years. Below are the
stakeholders with descriptions of how they must be
tackled:


  • Management- The prime message that will be
    directed to the management are the objectives of the
    merger. Why did the merger happen in the first place?
    Was it financial troubles or a plan for both the
    companies to grow profitably together. The
    management will be made to understand the ‘Big
    Picture’ and try and visualize it. They need to be able
    to see the building and not just the laying of bricks.
    The message conveyed will also make them feel
    responsible to keep the company together in this
phase of transition. They should be effective leaders
who can convey to the employees of Princeton File
Cabinets about the happenings at the top-level, so
that they can bridge the gap that can sometimes be
created during a merger.
The tools used to communicate all this to the
management will be cross-cultural meetings,
leadership training sessions and motivational
speakers who will help management tap into their
core-skills that is leadership and crisis management.
Cross-cultural meetings will help management
understand the long-term and short-term objectives
and goals of the merged company, helping them
decide their individual benefit as well as those carried
over by the company doing well.
Taking them out for a retreats will be an excellent idea
as it will help them understand the objectives better
by being in a stress-free environment. It will also help
them feel that the company cares about its
management and assist in team bonding.
Leadership Training sessions will act as a gentle
  nudge in the right direction. It will leave them feeling
  positive and energized, to motivate them to sail
  through times of difficulty.
  The management should also be able to put together
  a ‘Transition Team’ which will consist of trusted
  employees representing every level, who have
  excellent people skills and can smooth over situations
  to benefit the company. This transition team should
  be able to carry the communication plan forward and
  be able to address every part of the organization.


• Mid-level employees- These employees have to be
  dealt with in an extremely transparent fashion. No
  amount of communication during a merger can be
  considered ‘over-communication’. Tools such as
  newsletter, regular e-mailers with updates and open-
  meetings giving them a realistic picture about their
  benefits, salaries and job security will be conducted.
  Reducing the gap between management and
employees will eliminate the need for rumors to arise
and spread to a large extent. It will help the
management in building credibility with the
employees, which in turn will affect the customer base
as these employees are the ones directly in touch
with the customer.
Team-building exercises will be conducted regularly in
order to give employees the confidence that the
company views them as a whole and not as
individuals, reducing fear of layoffs. With a fair
amount of attrition expected, Princeton File Cabinets
will help employees to move on with resume services,
severance packages in certain cases etc. as it will
build goodwill in the industry through word of mouth
and also with retained employees. These team-
building sessions which will include games, physical
activity etc will also help with morale-building and
reduction of ‘merger stress’ such as increased
sickness, low productivity etc which are all a result of
negative thinking.
• Low-level employees- These employees will be
  addressed by someone from their own ranks, who is
  trusted by both the company and these employees,
  as they will relate much more to them than a ‘suited-
  booted person’. It needs to be communicated to them
  that only who they report to or the name of their
  company is changing, and will not affect their day-to-
  day work. Care will be taken to ensure that they feel
  like an important part of the process and not someone
  who is on the periphery of the merger. It is also
  necessary to talk to them about their salaries, benefits
  etc, as this is their prime concern.
  Tools used for these employees will be flyers, notices
  etc. along with regular visits and meetings within their
  unions if existing or meetings will be especially
  conducted interspersed with visits from management.


• Customers- Outdoor communication such as
  hoardings, pole kiosks will be used for customers, the
  main proposition being something like ‘Different
name, same company’ to put it simply. Also direct
    marketing tools such as personalized e-mailers,
    leaflets, brochures etc will be sent out to make them
    feel like the company is focusing on each and every
    one of them and wished to continue their long-
    standing relationship. The merger should seem like
    an endeavor that has been undertaken to be able to
    serve them better with improved products and
    services.


4. What is the proposed timeline?


The proposed time-line is one year divided into two parts.
The first six months, will be intensive and the next six
months will be determined by the learnings of the first six
months and a step down or step up depending on that.


5. Are there any costs associated with your plan?
Yes, there are costs associated with my plan. The costs
include time costs, manpower, monetary costs, as well as
cost of productivity. For example, the Transition Team will
require manpower, training sessions will include speakers
from within the company and outside which will require
monetary expenditure. These sessions will take time and
ultimately reduce productivity in terms of hours put in by
employees. Also due to the low morale and apprehension
within the employees, productivity will be relatively lower,
hence creating a cost on productivity. The retreats will
include monetary costs as well. Communicating with the
customer, the most important cost will result in advertising
expenses, but direct marketing costs will be relatively
lower than outdoor advertising, hence emphasis will be on
direct marketing as it involves a closer association with the
consumer as well as lesser costs. These will be the costs
associated with tackling the problems faced due to the
merger, but they must be treated as a long-term
investment on behalf of the merged company.
6. How will you measure the success of your
communications plan?
Forums for feedback will be open for employees to put in
suggestions and complaints anonymously. Also
counselors to help employees deal with merger stress will
be asked to keep track and notice behaviour trends in the
organization, but withholding names under all
circumstances. Also rate of attrition and productivity scales
will be an indicator as to how well the communication plan
is working.


7. What is/are your alternative option(s) if your plan is
not successful?
  1. The first option in case of plan not being successful
    will be a thorough understanding of why it failed and
    since an ‘education and communication’ approach did
    not succeed, a ‘participation approach’ will be put in
    place which means those who oppose the change
    can be brought into the decision making process.
    Assuming that these individuals are rational people,
who can make a meaningful contribution, their
  involvement will reduce resistance, get commitment,
  and put a fair decision-making process in place. The
  negatives will also exist in this case, that is wastage
  of time and a possibility of coming to a poor
  conclusion that will not benefit the organization.
2. If my plan is not successful, a more aggressive plan
  can also be practiced which would reward employees
  for accepting change with direct benefits such as
  incentives, higher chances of retention in case of
  downsizing etc. and removal of unwilling elements
  from the process that have high chances of leaving
  and spreading damage. This helps in the lessening
  the impact that negative influences have on other
  employees.
Thank You
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  • 1. Online Assignment – Your Homework Help Partner (We’re faster than your deadlines) Subject : Strategic Management Topic: Effect of Mergers on Employers, Employees & Customers. Effect of Mergers on Employers, Employees and Customers
  • 2. Building Support Systems and Communication Plans
  • 3. Abstract This abstract builds a communication plan to tackle problems faced during a merger. The case in point being the merger of Princeton File Cabinets, a manufacturer of file cabinets and office supplies with Sauer Incorporated, a multinational conglomerate. It outlines the difficulties and ways to tackle threats and insecurities faced by employers, employees and customers, costs involved and goals and objectives to keep in mind during the uncertainties of a merger. The paper includes a detailed plan and alternate options to help the merged organization sail through the transition smoothly.
  • 4. Scenario: You are the chief executive officer for Princeton File Cabinets, a manufacturer of file cabinets and office supplies. Your company has recently merged with Sauer Incorporated, a multinational conglomerate. The merger poses numerous potential problems for you and the employees of Princeton. Many of your officers and middle management personnel have expressed concern over their job security. They are worried that Sauer will install its own management personnel. Many rumors are circulating. The fears of management-level personnel need to be addressed. Your job is also tenuous, since Sauer has replaced key people after several other mergers and takeovers. Many of Princeton's customers have expressed concern over the merger. Your industry is highly competitive, and there is a real threat that many of your long standing customers will seek a more stable supplier. They must be
  • 5. assured the quality and availability of your product line will remain as consistent. 1. What is the objective/goal of your plan? The objective of my plan is as follows: • Target smooth assimilation of processes, people, management styles and work cultures of both the organizations • Create a smooth, open and transparent communication system so that rumors can be eliminated as much as possible • To convey to management-personnel that the objective of the merger is to harmonize both entities, that is Princeton File Cabinets and Sauer Incorporated for improved performance and results of the overall company benefiting everyone and making them understand why the change is needed
  • 6. • To ensure that the employees of Princeton File Cabinets get reassurance from management-level personnel with the right communication and confidence in this change and make them feel secure about minimizing their losses—loss of control, positions, monetary losses etc. • Make employees see the ‘Big Picture’. • Prevent employees from unproductive behaviour as a result of a negative thinking towards the merger by building support systems through a ‘Transition Team’ to help them sail through the change. • To convey to customers that the company, though now merged with Sauer Incorporated, will maintain the quality and availability of its products. The loyalty that it has consistently shown over the years, which is evident through its long-standing customers will be intact through the same amount of dedication and service that Princeton File Cabinets has always adhered to. • Try and eliminate ‘merger stress’ as much as possible
  • 7. 2. Who is/are your targeted audiences (stakeholders)? The stake holders that need to be addressed through the communication are the management and employees at every level from janitors and housekeeping to executives and management. The customer also needs to be addressed as the merger will make them doubt the stability of the company that they have been dealing with. They need to be assured that the products and services that Princeton File Cabinets have been offering will remain at the same standard in terms of quality and availability. 3. What messages will be directed to each stakeholder group, and what communication processes/methods will be used?
  • 8. Each group will be dealt with in a separate manner as they feel threatened by different aspects of a merger. A merger affects every part of the company, both acquired and acquiring. Hence for Princeton File Cabinets, it is important that it reassures all its stakeholders in order to grow and not let the merger and its difficulties damage the reputation that it has built over the years. Below are the stakeholders with descriptions of how they must be tackled: • Management- The prime message that will be directed to the management are the objectives of the merger. Why did the merger happen in the first place? Was it financial troubles or a plan for both the companies to grow profitably together. The management will be made to understand the ‘Big Picture’ and try and visualize it. They need to be able to see the building and not just the laying of bricks. The message conveyed will also make them feel responsible to keep the company together in this
  • 9. phase of transition. They should be effective leaders who can convey to the employees of Princeton File Cabinets about the happenings at the top-level, so that they can bridge the gap that can sometimes be created during a merger. The tools used to communicate all this to the management will be cross-cultural meetings, leadership training sessions and motivational speakers who will help management tap into their core-skills that is leadership and crisis management. Cross-cultural meetings will help management understand the long-term and short-term objectives and goals of the merged company, helping them decide their individual benefit as well as those carried over by the company doing well. Taking them out for a retreats will be an excellent idea as it will help them understand the objectives better by being in a stress-free environment. It will also help them feel that the company cares about its management and assist in team bonding.
  • 10. Leadership Training sessions will act as a gentle nudge in the right direction. It will leave them feeling positive and energized, to motivate them to sail through times of difficulty. The management should also be able to put together a ‘Transition Team’ which will consist of trusted employees representing every level, who have excellent people skills and can smooth over situations to benefit the company. This transition team should be able to carry the communication plan forward and be able to address every part of the organization. • Mid-level employees- These employees have to be dealt with in an extremely transparent fashion. No amount of communication during a merger can be considered ‘over-communication’. Tools such as newsletter, regular e-mailers with updates and open- meetings giving them a realistic picture about their benefits, salaries and job security will be conducted. Reducing the gap between management and
  • 11. employees will eliminate the need for rumors to arise and spread to a large extent. It will help the management in building credibility with the employees, which in turn will affect the customer base as these employees are the ones directly in touch with the customer. Team-building exercises will be conducted regularly in order to give employees the confidence that the company views them as a whole and not as individuals, reducing fear of layoffs. With a fair amount of attrition expected, Princeton File Cabinets will help employees to move on with resume services, severance packages in certain cases etc. as it will build goodwill in the industry through word of mouth and also with retained employees. These team- building sessions which will include games, physical activity etc will also help with morale-building and reduction of ‘merger stress’ such as increased sickness, low productivity etc which are all a result of negative thinking.
  • 12. • Low-level employees- These employees will be addressed by someone from their own ranks, who is trusted by both the company and these employees, as they will relate much more to them than a ‘suited- booted person’. It needs to be communicated to them that only who they report to or the name of their company is changing, and will not affect their day-to- day work. Care will be taken to ensure that they feel like an important part of the process and not someone who is on the periphery of the merger. It is also necessary to talk to them about their salaries, benefits etc, as this is their prime concern. Tools used for these employees will be flyers, notices etc. along with regular visits and meetings within their unions if existing or meetings will be especially conducted interspersed with visits from management. • Customers- Outdoor communication such as hoardings, pole kiosks will be used for customers, the main proposition being something like ‘Different
  • 13. name, same company’ to put it simply. Also direct marketing tools such as personalized e-mailers, leaflets, brochures etc will be sent out to make them feel like the company is focusing on each and every one of them and wished to continue their long- standing relationship. The merger should seem like an endeavor that has been undertaken to be able to serve them better with improved products and services. 4. What is the proposed timeline? The proposed time-line is one year divided into two parts. The first six months, will be intensive and the next six months will be determined by the learnings of the first six months and a step down or step up depending on that. 5. Are there any costs associated with your plan?
  • 14. Yes, there are costs associated with my plan. The costs include time costs, manpower, monetary costs, as well as cost of productivity. For example, the Transition Team will require manpower, training sessions will include speakers from within the company and outside which will require monetary expenditure. These sessions will take time and ultimately reduce productivity in terms of hours put in by employees. Also due to the low morale and apprehension within the employees, productivity will be relatively lower, hence creating a cost on productivity. The retreats will include monetary costs as well. Communicating with the customer, the most important cost will result in advertising expenses, but direct marketing costs will be relatively lower than outdoor advertising, hence emphasis will be on direct marketing as it involves a closer association with the consumer as well as lesser costs. These will be the costs associated with tackling the problems faced due to the merger, but they must be treated as a long-term investment on behalf of the merged company.
  • 15. 6. How will you measure the success of your communications plan? Forums for feedback will be open for employees to put in suggestions and complaints anonymously. Also counselors to help employees deal with merger stress will be asked to keep track and notice behaviour trends in the organization, but withholding names under all circumstances. Also rate of attrition and productivity scales will be an indicator as to how well the communication plan is working. 7. What is/are your alternative option(s) if your plan is not successful? 1. The first option in case of plan not being successful will be a thorough understanding of why it failed and since an ‘education and communication’ approach did not succeed, a ‘participation approach’ will be put in place which means those who oppose the change can be brought into the decision making process. Assuming that these individuals are rational people,
  • 16. who can make a meaningful contribution, their involvement will reduce resistance, get commitment, and put a fair decision-making process in place. The negatives will also exist in this case, that is wastage of time and a possibility of coming to a poor conclusion that will not benefit the organization. 2. If my plan is not successful, a more aggressive plan can also be practiced which would reward employees for accepting change with direct benefits such as incentives, higher chances of retention in case of downsizing etc. and removal of unwilling elements from the process that have high chances of leaving and spreading damage. This helps in the lessening the impact that negative influences have on other employees.
  • 17. Thank You Online Assignment – Your Homework Help Partner We’ll be glad to help you Mail: homework@onlineassignment.net Website: www.onlineassignment.net Live Support : Live Chat 24*7