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Dark Side of Mergers & Acquisitions:

Organizational Interventions andSurvival Strategies

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1930 Hill Bank was founded to serve SMEs 1950 First venture into International arena

1970 opened first foreign representativeoffice

2002 Adopted Matrix based organizationalstructure

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This bank was in the receivership of the

Savings Deposit Insurance Fund

It was acquired by Hill bank in 2004

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Combine superior qualities of both the banks

in different areas

Generate strong synergies

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Due to merger the employee personnelincreased from 8,515 to 11,145 in 2004

The overall average age reduced from 42 to39

The 35% of Hill banks employees who werebelow the age of 40 increased to 52% due toentry of newcomers

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What were individual reactions to changes inthe work environment during and after theacquisition

Were there any specific HR decisions taken Were any managerial implications designated

to reduce employee stress

What were the characteristics, skills, andcompetencies of those employees who havesurvived in the organization after acquisitionprocess

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The interviewee was working in PNM bankfor 14 years

She was working in managerial position in IT

department She was responsible for managing a specific

team that was responsible for integrating theIT systems of two banks.

The team involved mixed group of individualsworking in IT departments either in PNMBank or in HILL Bank.

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The decrease in job motivation and individualperformance

loss of corporate identity

voluntary job exits were most frequentlyobserved

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The layoffs were organized in the form ofcompulsory retirements or change of duties

There were not any positional changes in herdepartment, but such changes occurred inother parts of the bank without any specificcriteria presented for justification

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The necessary information about the

acquisition and its effects on employeesspecific career plans was not provided bymanagement or HR representatives

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Rather than specific skills or characteristics,

having long-established personal networkswithin the organization helped individualssurvival

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Employee of HILL bank for 8 years

Left the job post merger

She started her professional career in HumanResources Department in 1996, moved to amanagerial position in 2002, and left the bankin 2004 to work in an equivalent position inanother bank

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The employees generally felt job insecurityand thought that their career plans would be

disrupted due to reduced advancementopportunities in the new organization.

Some employees showed great resistance tochange and eventually, they voluntarilyquitted their jobs

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Some terminations were made based onassessment of duplicated positions in the

new organization.

For positional changes, two criteria wereemphasized

fulfillment of the required job qualifications

individual performance level

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The middle-level managers were seen as abridge between top-management and

employees They were provided with necessary

information regarding the employee relatedaspects of acquisition process.

Nevertheless, managers were not providedwith any specific knowledge or training tocope with the prevalent employee stress

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Survivors were those employees

who performed well in their jobs

who had been working in the bank for a certainperiod of time

who had strong career orientations

who were highly resistant toward uncertainty

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Lack of timely and accurate information createuncertainty on the side of the employees

The basis for the terminations should be

justifiable and organizations should providecompensation to dismissed personnel

In order to reduce prevalent employee stress,managers should provide both timely and

honest information to their employees ratherthan the false promises that will just validate orinvalidate rumors

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They should act as a buffer between theorganization and dismissed employees and

ease the detachment process of theseindividuals It is crucial for employees to increase their

personal visibility, to be patient and showresistance to uncertainty, to positionthemselves as team players who are open tochanges

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