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How to Mitigate Potential Negative Impacts Associated with Mergers and Acquisitions

How to Mitigate Potential Negative Impacts Associated with Mergers and Acquisitions

Mergers and acquisitions might be a lifeline to a business that’s on its knees, but they also have a significant impact on employee morale if not handled effectively. Companies have to reorganize all aspects of their business during a merger or acquisition. At least two staff groups are involved in any merger or acquisition effort and coming from different corporate cultures and styles to form a single business outfit. Adopting a new culture can be difficult for some employees, more so if they are faced with uncertainty regarding their job position and what the future hold. This is why a change management consultant is often a good idea.

Stress

Change is something that most employees battle with during mergers and acquisitions, especially when they are excluded from the decision-making that influences their jobs. The change is more so challenging and leads to stress, impacting employee morale negatively if downplayed and not handled effectively.

Hence, communication is an essential aspect of the transition process. Communication consultant at Strategic Communications, LLC, Linda Pophal, says organizations must establish open communication channels to inform the workers about what’s happening and how the changes will impact them and the company.

Fear of Job Loss

A culture clash is seeming inevitable when two or more businesses merge.  It is rare for two companies to have the same work style and culture. Therefore, the groups from either side will take time to know each other, a period that may see conflict arise. It is a situation that can also create perceived or real job losses. Some employees will fear getting fired or being demoted, which is a fear that can hurt productivity.

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Some workers might consider leaving the company as the best move for their professional careers. Therefore, the company, their managers, and the HR department must recognize this and establish opportunities for the staff groups to acquaint themselves and address concerns as they forge a new culture that brings both worlds together.

Competitiveness

When job security becomes a concern for the workers, they are likely to become more competitive trying to outdo each other. It is a situation that can quickly become a recipe for conflict or violence. While competitiveness can increase productivity, it also can create tension and discord in an organization. Managers and HR personnel should be alert, watching out for any counterproductive competition during mergers and acquisitions. They should do this by informing the employees about what to expect regarding their jobs and what the future with the company holds.

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