The role of HR while companies merging

Essay by thisfridayCollege, UndergraduateA, May 2008

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HR plays an important role when merging of two companies occurs. Conducting a benchmarking analysis, the LogicaCMG seems to have a great success with merging/acquisition processes. LogicaCMG acknowledged that "HR programs have been an essential part of its rapid growth - both organic and through acquisitions" (Stjernfelt, 2006). LogicaCMG is one of the leading company in IT services and wireless telecom industry. The main focus of this company is on "management and IT consultancy, systems integration and outsourcing services to clients across diverse markets including telecoms, financial services, public sector, energy and utilities, industry, distribution and transport" (LogicaCMG, 2006). Recently this company went through acquisition of Unilog. "This acquisition was also of a regional player looking for a way to sell globally" (LogicaCMG, 2006). However, just like any merger, an acquisition requires a great deal of attention from HR and management to insure the process goes smoothly and effectively. "This expansion has presented a number of cultural and management challenges for LogicaCMG, which are addressed and tackled through its strategic global HR program and framework" (Perks, 2007, pg.


A part of solution was to set up a team that "developed a new career architecture matrix called Pathways, together with a full coaching and mentoring program" (Perks, 2007, pg. 24). This program was based on the performance management system (PMS) which allowed employees to understand which level their skills are and what is the necessary training is needed to meet job requirements. "Overall, the company has developed an HR strategy and blueprint that enables it to roll out its core PMS on a local basis following mergers and acquisitions activity" (Perks, 2007, pg. 24). Having HR involved and monitoring the merging process is a key element of the amalgamation of any two companies.

While going through the merging process, it's important to focus on the people and provide clear communication and reasoning why change needs to occur. During research I've learned that Gary Forsee, who is a chairman and CEO of Sprint-Nextel Corp, placed a great amount of attention to the company's employees when Sprint and Nextel merged. "Employees expect straight talk, whether the news is good or bad" (Pomeroy, 2007, p. 16). Gary tried to be open and share all information when the merger was announced. His focus was "always on the people." (Pomeroy, 2007, p. 16).

In order not to lose the employees trust as well as not destroy the company culture, communication must be clear and consistent throughout the company. While sharing the company's goals and directions, it's necessary to listen to employees opinions. Management and human resources must be honestly open to suggested changes. Plans, on occasion, need to be revised based on workforce feedback and suggestions. Adjusting to the merge will take some time, perhaps even years. The leadership team must constantly meet with employees to provide status updates and to address concerns or questions that employees may have. "At this point, a year and a half into the merger, we have made a lot of progress, but we still have a lot of work to do. I expect it to take another year and a half to two years to complete the major pieces. It's a big job, but I'm optimistic," (Pomeroy, 2007, p. 16) Forsee concluded in the interview he gave to HRMaganize.

While many company's have had great success increasing their productivity and improving their products and services by merging. It's important that HR has a good plan, have good communication channels established within the company and all members of the organization must participate in order to reach established goals.

ReferencesLogicaCMG Buys Swedish IT Services Company WM-Data (2006). Retrieved from, N (2007). Merging with confidence at LogicaCMG. Strategic HR Review, 6(2), p. 24-27. Retrieved from ABI/INFORM Global database.

Pomeroy, A. (2007). Focus on the People During a Merger. HRMagazine, 52 (3), p. 16. Retrieved from ABI/INFORM Global database.

Stjernfelt, C. (2006). WM-data is now a part of the international IT-services company LogicaCMG. Retrieved from