Portfolio Project Option #1: Problem Analysis Paper

Problem Analysis Paper –
Cultural Remedy for the Psychological impacts of Workplace Mergers
Your Name
January 9, 2017
Your Institution of Affiliation
Introduction
The news about Mergers and Acquisition of a smaller company by a bigger one is not new anymore. Most of the times, mergers happen for the sake of the company’s survival or for chances of getting much bigger profits. However, most literature that talks about this, one theme that seems to always be forgotten is the discussion about its psychological effects to the employees. Perhaps, this trend is because of the belief that the effects of mergers do not always permeate as deep in the organizations as compared to restructuring done by a single company. At times, when companies merge, it seems that the only changes that would occur are those in the administrative level, while the basic functions of every employee remain untouched. However, in most cases, mergers usually restructures that whole company even to the most basic positions in order to fit with the new administration's mission, vision, and goals. Having experienced this, the author of this paper would try to lay out some of the psychological issues and stresses that employee of a newly merged company face. In line with this, the author believes that in order to cope with this stresses, there is a great need to consider both the workplace and the personal “culture” that the organization/employee has.
The Human Dimension of Mergers
According to peopleandculture.co.uk (2009), despite the varying numbers, research proves that most mergers (about 50% to 70%) that happen fail to reach their objectives. For a time, most research has proven how a dilution in the shareholder’s values have lead to a decrease in profits and revenues generated. However, recent researchers have now recognized how important it is to study the human side of these phenomena, rather than simply discussing the basic systems, processes, and strategies that they face (peopleandculture.co.uk, 2009). In their article peopleandculture.co.uk (2009) cited the top responses when asking CEOs about what would they do differently, if a merger would happen again, and the most common answer is the “the way they communicate with the employees”. According to Richards, (n.d.), one of the most significant reasons for these negative impact on employees are (1) stress, (2)fear of job loss, and (3) competitiveness. The first factor, stress, refers to the difficulty of an employee in assimilating with new tasks, roles, objectives, and even with a new workplace. The next factor, fear of job loss, is another daunting aspect of every merger due to the fact that in the most integration of two different companies, past expectations of employees in getting a good job/promotion is now threatened (Richards, n.d.). Thus, this leads to the employees to try to either look for a new job elsewhere or to our next factor – competition. As compared to the healthy competition, this type of competition is the unhealthy and stressful one. This negative competition is dangerous especially if it is already characterized by harassment or violence, and thus should be critically taken into consideration. According to Wharton.edu (2005), one of the main problems why a merger rarely works out, is that the well-being of the employees are usually taken-for-granted, focusing more on the costs rather than the stresses and problems that the local community and its employees face (Wharton.edu, 2005). Nonetheless, in any of the general factors, stated above, one aspect is notable, and that is ‘culture’.
Culture and Psychological Stresses in Workplace mergers
In the fields of Sociology, Anthropology, and Psychology, among others, the effects of culture in one’s emotional, social, and psychological state is very linked to one’s culture. The way we act, speak, think, and even perceive things are based/strongly similar with how we are raised and from the culture of our upbringing. However, in the event of mergers, culture does not solely mean our own personal culture and the culture of our hometown. Rather, the term culture could refer to a number of things such as workplace culture, organizational culture, corporate culture, and a lot of other things, which might seem as very similar to one another, but in reality, are not. Nevertheless, for the sake of this discussion and its scopes, the author of this paper believes that it would be best to speak about personal and workplace culture. With regards to workplace culture, it is important to note that this factor is perhaps one of the most complicated and difficult to understand due to the fact that in any workplace, most of the workers come from a different cultural background and varied ideologies, and thus, studying the culture of a particular workplace simply refers to studying the whole dynamics of this microcosm of variedness. In simpler terms, studying workplace culture from the perspective of one employee/collective of employees is almost impossible and that each and every workplace has a unique one.
In a study done by Islam, Sengupta, Ghosh, and Basu (2012), in the behavioral aspects of mergers in acquisitions in the State Bank of India, twenty-work factors (Appendix 1.A) were isolated and tested for their effects on the “employee resistance”, which then led to the delay of the merger process. According, to them, there are twenty factors that led to this, but these factors are mainly related to a close model of four attribute...