Legal And Institutional Context In Which Hrm Is Practiced

LEGAL AND INSTITUTIONAL CONTEXT IN WHICH HRM IS PRACTICED
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Executive Summary
The introduction offers an overview of the business environment and the impact merges and acquisitions present to the role of HRM. The changing business environment characterized by high levels of competitiveness has made the HRM practices a critical aspect in successful mergers. The review of the literature highlights that organizations merge to increase their market presence as well as improve performance. In the merger process, HRM plays an important role of aligning the workforce from the different companies with the objectives of the new organization. This is achieved following the legal provisions that protect the workers while aligning them with the organizational needs. Findings and analysis of the review show that an effective approach in HRM practices requires identifying and integrating the different cultural, corporate cultures that exist in different organizations to ensure that workers focus on a common goal. In this light, the HRM practices should be in line with the legal provisions and best practices that dictate how workers should be treated and compensated. Employee relation will focus on inclusion to ensure that all stakeholders are satisfied. This is reflected in the action plan that alludes HRM practices will be strategic to achieve high levels of employee productivity and organizational performance.
Table of Contents
 TOC \o "1-3" \h \z \u  HYPERLINK \l "_Toc531886500"
Introduction  PAGEREF _Toc531886500 \h
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Literature review  PAGEREF _Toc531886501 \h
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Findings  PAGEREF _Toc531886502 \h
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Analysis  PAGEREF _Toc531886503 \h
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Discussion  PAGEREF _Toc531886504 \h
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Employee relations in the new company  PAGEREF _Toc531886505 \h
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Conclusion and recommendations  PAGEREF _Toc531886506 \h
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Action plan  PAGEREF _Toc531886507 \h
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Recommendations  PAGEREF _Toc531886508 \h
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Legal and Institutional Context in Which HRM Is Practiced
Introduction
Increased globalization is increasingly influencing the economic and business environment, making it dynamic and competitive. This has made it necessary for organizations to adjust and restructure their strategic growth and survival in their respective industries. At the same time, human resource management (HRM) functions have become imperative aspects of how organizations gain competitive advantage (Rees and Edwards, 2009, p. 24). This is premised in the context that organizations have access to the same type of resources, technologies, and financial capital to remain competitive, but the workforce is the most important asset. With effective HRM practices, organizations can create competitive advantage through the workforce, because the business structure and practices might be replicated, but the skills, knowledge, and experience held by workers remain unique for each organization (Oliver, 1997, p. 697). In the quest for competitiveness, market expansion, and strategic growth, organizations engage in radical restructuring that involves mergers and acquisitions (M&A). These approaches are evident across different industries, and they are characterized by the impact on the role of HRM due to the human costs that emerge and affects workers in the businesses involved. It is evident that the lack of attention on the fundamental human dimensions in the legal and institutional contexts prevents success in M&A and it can result in failure of the venture. Effective HRM practices ensure that the employee needs are aligned with the legal provisions and the institutional process that facilitate effective M&A. This paper intends to identify the legal and institutional implications faced by HRM in the merger of two companies.
Literature Review
The business environment is increasingly becoming competitive as service providers across the globe venture in creative and innovative solutions to attract consumers. With many organizations having the potential for an increased number of employees that includes professionals at different levels, there is an increased need for efficiency in HRM practices. Mergers and acquisitions of companies had become a strategic initiative employed to foster success through differentiation of products and services and in venturing into new markets. In the recent past, there has been an increase of mergers within small and large organizations highlighting the significance of HRM in the process (Brouke, 2015). The HR practices involve aligning the large workforce with the change, developing the new organizational culture, and evaluating the workforce to identify the talents that exist and how they can foster success in the company.
Focus on the legal and institutional aspects of M&A through the HRM practices can be attributed to the challenges faced in ensuring the objectives of the restructuring process are achieved. In this context, the HRM has the mandate to engage employees from the merging organizations in a productive manner. Resultantly, the HRM is tasked with identifying and communicating the purpose of the M&A to workers (Antila, 2006, p. 999). Failure of effective communication results in employee resistance to change, especially due to job security. Notably, change is often perceived to be dislocating and upsetting. At the organizational level, the HR must foster effective communication strategies that ensure workers are prepared for the change, and they understand how it can benefit them and prepare them for the stress that might emerge in the process. The legal obligations essential in the merging process show that human resources have to engage closely with stakeholders to formulate organizational policies that are in line with the new culture of the combined entity. This includes compliance with the legal framework that informs on the rights employees have in job security and compensation. Other critical matters to address include the contractual obligations, which might be different in the original companies. Suggestively, the workers need to engage in new contractual relationships with the new company to ensure that workers are not exploited. This also ensures that there are high levels of employee productivity, which ultimately contributes to organizational performance.
A key role of HRM in M&A is selecting and coaching a team to be involved in the leadership responsibilities of the merger. Leadership is an imperative aspect of change management because it shapes how stakeholders are involved. Effective leadership practices are exemplified by the increased engagement of all parties in decision making. This ensures that the opinions, interests, and needs of different people are taken to account in the change process. Subsequently, there is minimal resistance to change. Such leadership characteristics are evident in the transformational leadership style, which is considered to be effective in engaging people and ensuring productivity in the change process (Briscoe et al., 2012, p. 13) Distributive leadership and the delegation of responsibilities is also important to allow the top management to focus on important issues about the merger while the subordinates ensure that the business remains productive. In this light, the HR leadership should ensure that there are higher employee productivity and high organizational performance despite being in a transitional phase. The coaching should be sensitive to the organizational culture differences between the business and attempt to align them without having a substantial impact on workers. Fundamentally, leaders should culturally sensitive because of the increased cultural diversity in the modern working environment (Ahlstrom, 2010, p. 341). This implies that the leaders should embrace best practices in HRM, which are aligned with the needs and expectations of all workers. These practices are important in retaining and motivating workers as they adapt to the new organizational structure and work environment.
Findings
The merging organizations present varying cultures, which need to be integrated for them to align in achieving the common goals of the new organization. This is largely the role of the HRM because corporate cultures are influenced by how w...