The human side of mergers and acquisitions - HP & Apollo Computer

Essay by yswong1668University, Master'sA, March 2005

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Understanding and Managing Human Resource Integration Issues

Companies have engaged in domestic and international mergers and acquisitions over the last few years to match the macroeconomic trends operating on a worldwide scale in the marketplace. Yet the ultimate success of a company's global strategy may depend on how well it manages the often-vexsome human resource "fit" issues associated with strategic customer-centered decisions and strategies. This paper presents a human resource model that can be used for understanding and resolving interpersonal management issues that result from organization, team, and individual misalignments. An actual merger and acquisition integration project is used to discuss the application of this approach. Names of project team members have been changed to protect their identities. Mergers and acquisitions increased exponentially in the 1980s and are expected to continue at a strong pace in the 1990s and into the next century. Most mergers and acquisitions are premised on the belief that the combined company will have greater value than the two companies alone.

According to Mirvis and Marks (1992), most companies executing acquisitions have done a reasonably good job sizing up the economic and financial characteristics of the takeover. Typically, the dealings are led by the two companies' top executives, some directors, investment bankers, lawyers, and third parties close to one or another of the firms. Their primary concerns are legal and financial - how much a company is worth, what terms to negotiate, how to structure the transaction, and how to get regulators to go along with it. Balance sheets are scrutinized, projections of demand and capacity are studied, and cost-cutting requirements are at the forefront of consideration. Most of the analysis concerns valuation and the financial contours of the deal.

Yet the ultimate success of the deal may depend on how well the acquirers manage the...