Research And Analysis Report - APA Sample

Running head: COMMUNICATION DURING INTEGRATION 1

Effective Communication during Integration after Mergers

By (Name)

Institution

COMMUNICATION DURING INTEGRATION 2

Table of Contents

Executive Summary ................................................................................................................... 3

Strategies in Communication during Integration after Mergers ................................................ 4

Changes during Mergers ........................................................................................................ 4

Importance of Communication during the Integration Process ............................................. 6

Recommended Strategies to Effective Communication during Integration ........................... 6

Conclusion .............................................................................................................................. 9

References ................................................................................................................................ 10

COMMUNICATION DURING INTEGRATION 3

Executive Summary

Post-2008 economic crisis, a rise in mergers and acquisitions has been witnessed. With the

phenomenon, integration has become an area in business and communication, worthy of

exploration. Mergers present organizations with changes in the composition of top

management, management information systems, human resource dynamics and accounting

balances among others. These changes have to be managed well in order for success in

integration to be realized. Effective management of change has at its core efficiency in the

communication function of the involved organization. While different approaches to

communication are open for use, strategic communication is often the key to sharing

information in an engaging and effective manner. Strategies in communication are developed

based on the needs of the audience and those of the organization, as well as the issue at hand.

With integration, communicating the change well in advance to all the stakeholders is one

such strategy. Another recommendation is that information gathered through benchmarking

and due diligence processes be shared to all internal stakeholders in a manner that is

accessible. Further, working in small diverse teams with the objective of enhancing

communication and mitigating cultural collisions has been shown to work towards the

success of a merger. Most important is the timely delivery of information in all the strategies

adopted; the merging organizations have to present the new brand in the shortest time

possible in order to ensure continuity in terms of the client base.

COMMUNICATION DURING INTEGRATION 4

Effective Communication during Integration after Mergers

The failure rate of mergers has been as high as the increase in their frequency in the

recent past. The failure rates are estimated at a high of 70 percent to 90 percent (Martin,

2016). Loopholes in the integration process contribute to the lack of success and largely

derive from communication problems (Miller, 2015). Subtle changes occur during mergers,

and in order to ensure success in the integration process, the change processes have to be

communicated in a strategic manner. The current paper reports on the changes that occur

during mergers, analyses the importance of communication in the context of such changes,

and lastly, offers recommendations on strategies that can be used to communicate effectively

in the integration process.

Changes during Mergers

Integration has become a necessity to business success in the years post the 2008

economic crisis because of frequent business mergers and acquisitions. The desired success

from mergers and acquisitions can only be achieved with the effective integration of the

changing businesses. Several changes can occur during the mergers and acquisitions.

Notably, top management composition, including that of the Board of Governors, accounting

balances, human resource dynamics, and management information systems are areas of major

changes. All these changes have implications for a business's future and, therefore, they need

to be effectively managed in order for the integration process to transition with success

The composition of the top management plays a big role in what options will push

through during the decision making process. Ivana notes that the demographic characteristics

of top management play a major role in the approach employed in decision-making (2016).

Consequently, the change in composition as necessitated by mergers and acquisition imply a

change in how a business is generally run. Closely related to this change are human resource

practices whereby recruitment planning can change. Further, retentions or retrenchments are

COMMUNICATION DURING INTEGRATION 5

uncertainties with which the present employees on either side have to bear. Job rotations may,

be introduced or the overall job description altered. The direction taken in integrating the

human resource practices will, therefore, be greatly influenced by the composition of top

management regarding the demographic characteristics.

Often, each company (or merging group) comes with its own way of managing

information. Various systems for managing information are currently in use in the market

whereby the choice of a company depends on its needs and the preference of the top

management. Integration of management information systems in a way that fits both groups

while maintaining features of efficiency is a recipe for success. Achieving such a balance is

often a tough bargain in which the top management has to engage (Morrissey, 2014). While

integrating the information is mainly easy, ensuring an access interface that is friendly to all

users is often a challenge.

Another important area of change is account balances and tax implication. Assets and

liabilities coming in from either side of a merger have to be harmonized. During the

consolidation process, some parts of assets such as goodwill (non-current asset) may be

written off. In addition, the implication of the new status on the taxation of the new entity

should be considered during integration to avoid future collisions (Tucker, 2016). Tax

valuation is especially important with larger mergers where the magnitude of the implication

can be huge. The new financial status of the joined entity may spill over its effects on human

resources and business processes, affecting their state and how they are run. The emphasis on

transparency and efficiency in the way consolidation of financial operations is done is

noteworthy (Freeman, 2015).

COMMUNICATION DURING INTEGRATION 6

The Importance of Communication during the Integration Process

At the core of a successful organization is effective communication. The strategic

planning of any successful company incorporates communication plans. In the absence of

well-organized communication, integrating and orienting an organization’s operations and its

management function to meet the corporate goals with efficiency, becomes an up-hill task. In

the context of successful integration following a merger or acquisition, tested plans for

executing the communication function are of extreme importance. Communication facilitates

success in change management; in integrating all the business processes and other aspects

such as corporate culture, effective communication cannot be overruled.

Apart from ensuring that all the internal processes are well synchronized, the

employees are cohesive, and the new entity is up and running, effective communication

ensures the retention of the corporate brand or creation of a new one. Mergers and acquisition

present the external environment with confusion regarding the brand. In order to clear such

confusion and portray the brand an organization envisions, effective communication is an

indispensable tool.

It has been noted that communication strategies that are tailored to the specific

integration required can greatly aid in the achievement of success in the integration process

(Galtabiano, n.d.).This means that planning the communication can only occur right before a

merger or acquisition. In such strategies, the external and internal communication functions

are both put to task (Galtabiano, n.d.). The next part of this paper focuses on strategies that

place internal and external communication in the best use possible in successful integration

after mergers/acquisitions.

Recommended Strategies to Effective Communication during Integration

i. Benchmarking

COMMUNICATION DURING INTEGRATION 7

Benchmarking the expected integration process of the organization with others that

have taken place in the industry is in line with business best practices (DePamphilis, 2009).

Through benchmarking, the organization will identify the approaches that are best suited to

their case. Processes of due diligence generate information that when communicated across

the necessary departments of an organization act as a good primer for integration. The

information should be presented using the simplest language possible so that all internal

stakeholders make sense of it and understand the necessary actions (“The four faces of

leadership…,” 2015). Benchmarking as a whole also serves to demonstrate whether the

integration is to the benefit of the company or not, in addition to helping gain knowledge on

how to go about the integration process.

ii. Timing

Timing is crucial to communication efficacy during integration. The decision to participate in

a merger and the reasons behind it are usually clear to most of the top management personnel;

however, junior management, other employees, and even shareholders are often in the dark.

Further, different clientele in the external environment may be pondering and wondering on

the effects of a merger on the brand to which they had got accustomed (Galtabiano, n.d.).

Consequently, it is important that the necessary communication is done way in advance of a

merger or acquisition. Little to no room should be left to speculations by the internal and the

external stakeholders.

iii. Announcement

Internal communication on the anticipated merger can be initiated via a scheduled

face-to-face announcement. All employees and shareholders should be invited for the

announcement. Additionally, pamphlets and stickers containing the content of the

announcement should be made available and accessible to everyone in the internal

COMMUNICATION DURING INTEGRATION 8

environment of the organization; ‘pinning boards' and common rooms are a great outlet.

Mailing lists should be used to ensure a wide reach—this approach also applies when

communicating to external stakeholders. How does one know that sense-making was

achieved with the wide information distribution? Only with feedback, can efficacy in

delivering information can be assessed (Radhaswamy & Zia, 2011).

iv. Web 2.0 Technologies

How can information channeling be designed in such a way that timely feedback

provision is possible? Digitization of communication and the availability of Web 2.0

technologies have made it possible to obtain feedback in an effective manner; corporate blogs

are, for instance, important to efficiency in internal communication (Donald & Sarah, 2010).

Blogs not only allow for feedback, but also allow for the exploration of alternative views,

which greatly enhances the approaches adopted the organization.

v. Small diverse teams with an assigned manager

Notably, corporate cultures vary most of the time; therefore, once the integration process

is initiated, collisions among personnel from either side are highly likely. Culture collisions

need to be contained for success in integration (DePamphilia, 2009; Galtabiano, n.d.). In

order to achieve containment or mitigation, the decision-making on the manner in which

integration will be achieved should be done in holistic consultation. While early

communication as earlier discussed is vital, the top management should also be active in

ensuring that the merging teams start viewing each other as one, and start working towards

oneness. Roles in the merger should be clarified, and so is the decision-making chain, as well

as any other changes that are important to the company’s structure and its strategic goals.

Further, small teams built out of the larger integrating teams, and within which duties

and information are shared during the transitioning period, has been shown to buffer

COMMUNICATION DURING INTEGRATION 9

differences (Galtabiano, n.d). Within such teams, common issues are explored during which

any cultural tensions are released and improvement in social cohesion achieved. Notably,

individual concerns such as those related to job loss, inadequate skill to cope with

information systems and duties, as well as changed routine are better addressed in groups of a

few people as opposed to large groups. The smaller groups can voice their common views

regarding the change processes in interactive sessions with the respective managers. In the

end, a consensus will be reached where all members feel represented in terms of their feelings

and workplace needs

Conclusion

In conclusion, communicating in a strategic way is necessary for achieving a

successful of integration following an organizational merger or acquisition. In the light of the

changes necessitated by a merger, effective integration is a major determinant of success.

Notably, efficacy in communication is at the core of successful integration. Various strategies

can be employed in communication to make the transitioning a success; timeliness of the

communication is a key strategy. All the necessary audiences to both the external and internal

communication functions should be reached in time and using the right channels. With the

digitization of communication, social media has made it possible to communicate effectively

and obtain feedback that can be worked on to make communication even better. Effective

sharing of information obtained from benchmarking integration and building small diverse

teams for communication purposes have been shown to enhance success in integration.

COMMUNICATION DURING INTEGRATION 10

References

“The four faces of leadership and the importance of the vision thing: three keys to

communicate vision.” (2015). Healthcare Registration, (2). 3.

DePamphilis, D. (2009). Mergers, acquisitions, and other restructuring activities: An

integrated approach to process, tools, cases, and solutions. Academic Press, pp. 243

– 244.

Donald, P. C. & Sarah, S. K. (2010). Best practice at Dell Computer Corporation

benchmarking a high-speed management communication system. Best practice at

Dell Computer Corporation, 15-20.

Freeman, G. A. (2015). Financial integration: consolidating finance operations, whether the

result of a merger or even within an existing system, requires finesse and

transparency. HealthLeaders Magazine, (4). 32.

Galtabiano, G. (n.d).Marketing Lessons from a Major Merger and Acquisition. Brand™

Quarterly. Available from: http://www.brandquarterly.com/marketing-lessons-from-

a-major-ma-in-the-energy-and-technology-sectors

Ivana, B. (2016). The Influence of Top Management Demographic Characteristics on

Decision Making Approaches. Ekonomski Vjesnik, Vol 29, Iss 2, Pp 393-403 (2016),

(2), 393.

Martin, R. L. (2016). M&A: The one thing you need to get right. Harvard Business Review.

Miller, G. (2015). Integration is the tough part of mergers. Las Vegas Business Press

(10712186), 32(16), P8.

Morrissey, J. (2014). New partners, new systems? Newly merged hospitals have a tough

decision to make about integrating or interfacing information technology. Trustee, (4).

COMMUNICATION DURING INTEGRATION 11

Radhaswamy, P., & Zia, A. (2011). The Importance of Communication. IUP Journal of Soft

Skills, 5(4), 52-56.

Tucker, E. (2016). Mergers and Acquisitions on the Upswing. Business NH

Magazine, 33(12), 26.

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