Wednesday, July 18, 2007

Human factor in M&As

The rosy picture of India Inc's acquisition spree both at home and abroad could dissolve into a nightmare if employee-related issues post-M&As are not taken care of strategically.

While the acquisition of Anglo-Dutch steel maker Corus by Tata Steel and Arcelor by NRI tycoon L N Mittal-backed Mittal Steel are worth taking pride in, such deals are making the employee issue more complex.

Employee problems post-merger include a feeling of loss after teams are split up and merged into a new team, lack of trust in the new team mates and unclear roles that give rise to uncertainty and negativity, says a paper by consultancy firm Training Alternatives (TA).

"Organisations should intensify communication and take up steps to clearly define the structures, roles and responsibilities... (besides) help people understand and anticipate what to expect and how to cope with feelings and emotions at each stage of the merger," the TA paper said.

It said "creating collective goals could be a smart move to avoid such problems." Training Alternatives said strategic planning for a new vision, mission and organisation values would be a great idea and would help in creating a new identity in addition to absorbing everyone in planning and setting a goal.

India has been ranked second in the global M&A deals this year so far in the Asia-Pacific region, with a total outbound deal value of USD 13.5 billion, according to Dealogic.

Training Alternatives noted that the domestic market too has been witnessing a slew of mergers and acquisitions like Fortis buying Escorts Heart Institute and Research Centre, Vijay Mallya-led UB group's acquisition of Air Deccan and Jet Airways takeover of Air Sahara. PTI