Organizational leaders are challenged daily to make decisions steeped in risk and uncertainty. Some of these decisions affect the organization and stakeholders in fundamental ways, such as the decision to go public, acquire large assets, or merge with another company. Such decisions require a number of associated critical decisions to be made. The effectiveness of these decisions is predicated upon framing an optimal decision environment to fully integrate all stakeholders.
For this project you will identify an industry-related problem or opportunity facing an organization leader and identify how to structure an optimal decision environment.
This project consists of the following parts:
Formulate the Management Problem or Opportunity
- Explain how management problems and opportunities are defined in the academic and practitioner literature. Focus on classifications that distinguish different levels of complexity and impact.
- Identify a management problem or opportunity in one of the following areas:
- Analyze the impact of the problem or opportunity you selected in terms of one or more of the following areas:
- Construct specific measurable outcomes aligned with an effective decision framework.
Formulate the Management Problem or Opportunity
Definition of Management Problems and Opportunities in the Academic and Practice Literature
In academic and practice literature, the problem definition concept must be based on a problem-solving extensive account. Among the management theorist, stage, or phase models are the most famous depiction of the process of problem-solving (Smith, 1987). According to Vizioli and Kaminski (2017), the initial problem definition stages include a clear description of all accessible facts, identification of objective and relevant facts, and goals definition. It also describes why the situation is regarded as problematic is highly significant on the stages of efficacy in verifying, decision-making, and generating alternative proposed solutions (Vizioli & Kaminski, 2017). In most cases, problem definition in academic and practice literature gives an excellent opportunity for researchers to identify a more viable and innovative solution to the defined problem.
Identification of a Management Problem or Opportunity in Merger and Acquisition
An acquisition refers to how the company assets are transferred to a new owner or a buyer. At the same time, a merger describes the disposal or combining of two or more firms’ resources after an acquisition. Merger and acquisition have unique benefits to organizations that include cost reduction by eliminating duplication, economies of scale, a higher market power, inter-partner learning, and an extensive range of services and products (Allahar, 2015). Merger and acquisition also present the human resource issue, characterized by a combination of different organizational cultures, integration strategy of an ill-conceived human resources integration strategy, and massive workers turnovers after a successful merger or acquisition (Schuler & Jackson, 2001).
Impact of the Selected Problem or Opportunity in Terms of Maintaining Competitive Advantage
Human resources are the primary source of competitive advantage in an organization. Employees have the knowledge, skills, and expertise needed to enhance the adequate provision of services or develop quality products in an organization. This is true, especially among key employees that hold vital positions that determine production efficiency, product quality and innovativeness, and effective integration of new technology in production and service provision. During mergers and acquisitions, companies always face employees’ issues to eliminate or keep to preserve knowledge and expertise in the company from both ends. Human resource managers experience a challenge in determining who to leave and who to stay after a merger. Moreover, there is always a high level of tension among workers that is characterized by anxiety and fear of job loss and lack of job security (Cartwright & Cooper, 1990). This state pushes most of the two companies’ workers to start looking for another employer just if they are affected or when they cannot stand the ultimate results of workers laid off after the merger and acquisition. This means the company is likely to lose even the most talented and knowledgeable workers it could have been happy to keep by leaving voluntarily. Such moves would highly impact the company’s competitive advantage, acquired through workers’ skills, competence, expertise, and innovativeness or creativity. The company is likely to lose talents that are hard to replace among the workers who leave voluntarily following their co-workers’ massive layoff. Moreover, mergers and acquisitions are likely to impact the left workers’ work morale. Mergers result in the integration of different organizational cultures or the adoption of the parent company’s culture. Whatever the case, there is always a group of new employees to the newly adopted culture and who are least likely to like and embrace the new culture. There is also internal conflict among employees, as one group tends to act superior to the other, making it considerably hard to work in harmony in the early stages of merger and acquisition. This generally, the new human resource management environment is likely to impact workers’ morale, motivation, and commitment negatively. This will directly impact the company’s ability to maintain competitive advantage immediately after merger and acquisition and a few years after (Cartwright & Cooper, 1990).
Specific Measurable Outcomes Aligned with an Effective Decision Framework
According to Rodriguez-Sanchez et al. (2018), an effective merger and acquisition process involves three fundamental stages: the planning stage, the integration stage, and the acquisition stage. In a useful decision-making framework, the HR function is introduced in the implementation stage. After the organizational integration, the period is often typified by absenteeism, redundancies, voluntary staff resignations, conflicts of interest, and power struggles. This tendency seems to occur in all integrations, though it mostly relies on the strategic purpose of operation, the level of hostility or amicability, and sought integration. The implementation stage’s HR management success determinants are grouped into classes, which include control merger and acquisition process, consolidate leadership, culture evaluation, strategy, and structure, and HR evaluation and provision (Rodriguez-Sanchez et al., 2018). The efficient management of the novel process in the implementation stage will evade tension among HR, people’s apathy, and performance impairment. HR management will try to attain staff provision and their turnover. Tacit knowledge entrenched in HR is a precious resource to be transferred. HR retention and permanence favors significant knowledge transfer and is essential in Merger and acquisition success.