Issues


Issue: The Two Companies Are Not Compatible In Terms Of Culture

This is generally the case due to the history and evolution of the firms. Since it is almost always the case, some managers minimize this and state that they can change the culture. After all, they run the company. But culture is deep. There is culture involved at the company, country, and business unit level.

Impact

If the problem is either misunderstood or minimized, then the issue is not addressed. The problems grow and signs show up in terms of clashes at the working level. These are often misdiagnosed.

Prevention

The best approach is to identify a list of potential cultural issues. You can create a table of three columns. The first consists of the issues. The second is the impact. The last consists of comments.

Action

If you start seeing signs of problems, you need to think about culture being behind the situations.

Issue: There Was A Lack Of Analysis Of Processes And Systems; Too Much Attention Was Placed On Organization

It is very interesting that organizations do not generate profits; instead, they generate costs. Where are profits made? In business processes and supporting systems. Yet, the processes and system get so little attention. In some cases, they are treated as afterthoughts. In the real world you want to consider processes first, followed by systems. Then with these defined you can move onto organization— a more consistent approach.

Impact

With the organization fixed and most of the time chewed up in organization analysis, there is tremendous pressure to finish up the processes and systems. Most of the time, the systems part will come through. The process part will not.

Prevention

Start with the processes and transactions. Then move out to systems. After this, then you can consider the organization.

Action

There may be too little time and a crisis. The best thing that we can suggest is to raise examples of problems with specific transactions. Your basic purpose is to raise the spectre of fear and dread to get management’s attention.

Issue: The Acquiring Or Dominant Firm Does Not Pay Attention To Issues At The Local Level

In a merger or acquisition there is so much to do and the work falls on the shoulders of too few people. Thus, attention falls at the headquarters level. People often do not want to go out to the field offices because of the fear of being left out of the communications loop.

Impact

If the dominant firm is not paying attention, then they really don’t feel that it is important. The employees in that office don’t need mind readers to determine what is going on—they get the message. They tend to leave. Then suddenly, the headquarters starts to wake up—too late.

Prevention

You should begin out in the field where the work is done. Then you can work back into the headquarters. There are often many issues that require attention. During the merger or acquisition process, the work on issues is frozen. The problems build up.

Action

Issues will begin to surface at the local level. They may be dealt with ad hoc responses. This is not systematic. In many cases, the issues are ignored due to the press of other matters.

Issue: Organization Change Is Pushed Through Without Thought Or Planning

This arises because management at the headquarters takes a more remote, academic view of the organization. The business processes have not been considered. Often, organization change is based in part upon “deals” or agreements made with certain managers during negotiations. The organization may be warped around the deals. Another situation is that the headquarters part of the organization is defined. However, the structure of in-country offices is left fuzzy—leaving the people there up in the air. The situation is particularly acute in cases where both companies have offices in one city or country.

Impact

The new organization may not fit the business processes—causing problems later. Roles may not be precisely defined. There may be overlap. Where decisions are made or information passed up through the organization may not be clear. If only a part of the organization is defined, then many employees will feel left out. In a time of downsizing, good employees may leave. In some mergers, the company fell apart in a year or two.

Prevention

The first step is to begin where the companies make money—start with incountry and nonheadquarters sites. Define new business processes and then the organizations locally. This gives stability to the processes and work, and guarantees the revenue, sales, and customer service. Then the headquarters organization can be addressed through a combined top down and bottom up approach.

Action

If problems start to arise, you can detect it in the attitude of employees in the field first. One idea here is to freeze the organization at headquarters and not implement change until the processes and local organizations have been addressed.

Issue: Costs Are Not Reduced As Planned

Every merger or acquisition will claim large savings. Overlap in functions is cited. Let’s look at the real picture. The people who are doing the sales, distribution, servicing, and other functions, we assume, are productive and are busy. Not much savings here. There could be savings in office consolidation, but even much of this may be lost due to long-term leases on office space. The savings is probably at headquarters. If there are large, bureaucratic headquarters units, then there are large, potential savings. But even here some of the savings may not come true due to deals made during the negotiations.

Impact

Shareholders and investors want the expected savings. Pressure is placed on management to get these savings. Management looks around and finds that they cannot do much more politically at headquarters. So they issue edicts or fiats that the remote offices must make severe cuts. Surprise, the revenue stream diminishes; customers leave and the company shrinks.

Prevention

Overpromising savings often results from an academic, distant look at the organization. If you really want to estimate savings, follow the guidelines of the last issue and begin with the processes and local organization. You can define streamlined versions of these. Then proceed inward toward headquarters and you will find that the headquarters organization can be very small.

Action

Resorting to emergency cuts in costs just creates more problems. Instead, use a combination of trying to raise revenue and looking at the business processes for increased efficiency. Unfortunately, these will take time.

Issue: Current Work In Many Locations Is Negatively Impacted

When there are negotiations going on between two firms, the employees of both firms get very nervous. When there are soothing, general statements from headquarters, the reaction may be panic. In the twenty-first century there is sometimes not a lot of trust in corporate management to tell the truth. Morale starts to go downhill. Customers and suppliers start asking questions of the local, incountry management. When they do not respond adequately, then the customers or suppliers think that local management is out of the loop and may be clueless— not good for customer and supplier relations.

Impact

Lower morale leads to reduced productivity and that in turn rubs off on customers and suppliers. Relations are affected. People may want to wait until the dust settles until they decide what they are going to do.

Prevention

Communications should start with employees, customers, and suppliers. In detail, the companies should indicate the level of service, range of products, and other factors that are tangible and specific to get things calm from the start.

Action

If you start to detect problems in the field through customer and supplier contacts, then you should try to improve relations by stabilizing the field organizations.




International Project Management
International Project Management: Leadership in Complex Environments
ISBN: 0470578823
EAN: 2147483647
Year: 2003
Pages: 154

flylib.com © 2008-2017.
If you may any questions please contact us: flylib@qtcs.net