Background of the organization
In the international environment, the HRM concepts are applicable to address the issues related to the cultural and social differences. In the international business merger HR professionals need to make strategies and conduct proper research in context of economic, cultural and legal differences between countries. The present sections give an overview of the different issues and obligation which are applied in case of international business. The host country should be in constant communication with the home country office should ensure policies and practices are aligned with the organization (Lebedev, Peng, Xie and Stevens, 2015). The present report is based on No-cable & Case mobile shops and its acquisition process.
No-cable & case is Singapore based enterprise which sells phones, tablets, and repair phones. It has 41 chain stores in Singapore and Malaysia. The corporation wants to expand its business on an international level. The owner of the company Jo and Alicia Leung want to purchase Australia based Galaxia Emporia (Cooper, Liu, and Tarba, 2014) which is an online retail chain and it has 25 stores in Australia. Through this merger, No-cable & case receives distribution network in the Asia-specific and also expand business in Australia. In the international business merger, HR issues have to face many types of problems. Some of them are given below:
In the merger and acquisition, there are three-stages model which can be used for identify the HR issues and provide formalize the M&A process. The ability to structure of three stage model in the organization allows others to focuses on necessary conditions for successful M&As. The three-stage model is taking over by the companies so they can integrate with merger easily and achieved business-related goals earlier. The $13.2 billion acquisition of Columbia Pipeline Group by TransCanada is also followed the similar concepts in order to overcome with HR issues related to the merger and acquisitions.
The first issue associated with the merger is change management. As after the acquisition of the new business the company has to make many changes in its business policies. The new management can make changes in the top authority and also change in the procedures. It is possible that the employees and other individuals resist the changes implemented by the organization. The employee resistance is the most common problem in the change introduced in an organization. The business organizations face this issue as the employees find difficulty in adapting to changes in a business organization. They find it challenging to adapt to new business processes or learn new skills; as a result, the employee resistance is the most common problem in the business organization. It directly impacts on the productivity and the profitability of the business organizations.
Online Growth and Expansion Plans
In the case of No-cable & Case mobile company, HR may also face similar problems as the employees of Galaxia Emporia can become change resistant and do not accept new policies (Krug, J Wright, and Kroll, 2014). So new management Jo and Alicia Leung need to make communication with workers regarding the vision and purpose of the merger. The HR should make communication about the necessity of changes.
In the international merger and integration of the two companies, culture also needs to be integrated. In the merger of No-cable & Case and Galaxia Emporia, the culture of both companies is also integrated with each other. The No-cable & Case is making the focus on retail business; on the other hand, Galaxia Emporia is focused on the online business in retail. In both companies, employees have different culture and values. In the international merger, it may be possible that cultural conflicts are occurring. So, the HR needs to anticipate culture differences and take steps to integrate two cultures.
In the international merger and acquisition, the new management needs to decide their structure and determines who will stay and who leaves the organization. It can lead to dissatisfaction among present employees. The company may fail to retain its key personnel or talented candidates. So, in the acquisition Galaxia Emporia, the new management needs to ensure effective workforce planning and maintained its key talent employees (Deng and Yang, 2015). In addition, the company also ensures to make effective communication with laborers and help to increase understanding requirements and needs of the new business.
Mergers & Acquisitions can also lead to layoffs of the employees in the business. In the merger and acquisition, outsourcing process may be creating issues problems and results in too many issues for HR. In the merger and acquisition of No-cable & Case and Galaxia Emporia, HR policies and procedures need to consider all types of compensation for all the employees; in addition, the business needs to follow all types of international labor laws and their implications.
During the merger process, there are different types of changes which appears so management needs to build a team for M&A, through which they can effectively apply changes and also help the company to overcome with merger issues. In the acquisition of Galaxia Emporia, Jo and Alicia Leung need to ensure to make the leader focus on the merger solely rather than focusing on the business operation (Marks and Mirvis, 2015). It helps the HR and other management to effectively executive their policies and procedures. The new management can also conduct meetings of employees and leaders so they can develop a better understanding.
Overview of Galaxia Emporia and its management team
In the global business, there are different types of implications which apply on compensation policies of a business organization. It is important to focus on the design and the development of the compensation policies of an organization. It is also important to ensure that every employee is given compensation according to his capabilities and skills. It must be attractive and must be capable of attracting the employees. In the international business, the management of company needs to make sure to follows all type of the national, host country and third county rules and regulations.
Analysis theory
There are different types of the compensation theories are adopted by organization. As per given case study the No-cables, and Case company is adopt equity theory. As per this theory, No-cable and Case Company adopt Equity theory of compensation. According to this theory, the company has to pay equally to all employees as per their skills and knowledge. The similar theory is also adopting many business organizations such as Apple and Google Company.
In the compensation of employees, the management needs to consider equal pay for all the employees and workers. In the case of a home country, employees are paid according to their requirements and needs. The similar approach is also applied to the host country and third country employees. It helps the company to maintain equality in the business. It is a legal obligation of the international business on HR managers (Gomes, Angwin, Weber and Yedidia Tarba, 2013). In the acquisition of Galaxia Emporia, the manager also needs to pay equal payment according to employees’ needs and requirements. This is called balance sheet approach.
All the country have the different legal amount of days which must be mandated as holidays. Most of the countries agree that the employees must be given one off in a week and most probably Monday. Other than that, other day are also mandated as holidays which include public festivals or offs. For example, in Australia, there are maximum 20 days, one can request about the vacation. In the USA, a person can apply for maximum fifteen days’ vacation. So, the HR managers need to maintain and pay the amount of compensation to all employees according to their legal structure. In the case of a merger in Australia, No-cables, and Case need to give compensation of 20 days’ vacation. In Singapore, a person can take vacation of15 days.
Many countries in the world offer the health-care facilities universally. The HR managers need to consider all types of health-related facilities obligations and cover all taxes. In the acquisition of Galaxia Emporia, the company and HR managers have to pay another cost of benefits to their employees (Ellis, Lamont, Reus and Faifman, 2015). If employees belong to the third country such as Malaysia, then payment would be payable according to the Employees health Act. In Australia, health payment would be payable according to the Health and Safety Act 2012, in which all employees have to right receive insurances and in Singapore, all residents receive a catastrophic policy from the government, but they need to purchase additional insurance for routine care.
Challenges in Managing the Australian Business
The pay system includes basic payment and the hourly payment to workers. In each country, there are different laws and regulations related to the payment system and legal requirement. It becomes an obligation for HR and source manager to make payment according to the law. Such as in the Asian countries, the payment system would be based on making higher payment on the basis of seniority (Bauer, Matzler and Wolf, 2016). In the same case, in Australia, payments include minimum wages per hour and in Singapore, in the case of a merger, the new owner Jo and Alicia Leung need to make sure to fulfill all types of the basic payments and to fulfill the legal requirement for acquisition.
In the compensation of the international merger, the HR manager needs to make arrangements for estimating correct analysis of all expenses of the company. The HR professional would estimate these expenses in the home country and costs for the same items in the host country. For example, if No-cable and Case Company is paying $100 to employees as expenses then in Australia and other countries they have to make similar payment. If any type of difference appears in the expenses amount then the manager should make compensation. During the merger, many employees have to face layoffs so the business should also pay extra compensation to employees according to the law. Other than that, the salaries of the employees also need to be streamlined according to between different organizations. The employees at the same post at different organizations must be given same salaries so that no dissatisfaction occurs between different organizations.
The main challenge in the overseas merger is performance evaluation. In the performance evaluation, the domestic country should rate the performance of the expatriate. In case of host country employees and management may evaluate the performance of the employees; however, the cultural difference makes the process ineffective. In the case of Malaysia, harmony in most important as compared to productivity (Lebedev, Peng, Xie and Stevens, 2015). So, the merger of new business Jo and Alicia Leung need to make sure to maintain harmony in the workplace. On the other hand, in Australia, performance evaluation must be on basis of the productivity generated by employees and number of customers should be added in business.
The theory which adopt by the company is Goal setting theory. As per suggestion of this theory individuals goals are established by the employers. By motivating employees for improving performance, company can enhance worker’s performances effectively.
In the acquisition, management needs to make sure to use balance set of rater so they can maintain performance effectively in the home country and the host country. Apart from evaluation, performance management also needs to make criteria for evaluating the performance of the individual. The marking criteria should clearly communicate to all employees and also the business should make sure that the performance management should be developed as part of the individual development and as an effective organization tool (Lebedev, Peng, Xie and Stevens, 2015). The performance management should also need to obtain feedback from employees to improve performance in the company (Cooper, Liu, and Tarba, 2014). In case of merger and acquisition, management and other individuals need to make sure that performance management should be based on the role of leadership, effective communication and address cultural differences between different people. No matter what strategy is adopted by Jo and Alicia Leung for improving enactment, they need to make leadership more effective. There is no such legal obligation for performance management but the culture and workplace ethics make huge differences
In Singapore and Malaysia, people like to work with harmony and easily adopt the cultural difference, while in the Australia individual are making the focus on an increase in sales and profit. On the basis of the individual actions, performance is evaluated (Cooper, Liu, and Tarba, 2014).
Another obligation which rose for a manager under the performance management is to provide training and development. Through the training and development, the employees can improve their performance and also fulfill gap of cultural differences. In the given case study, No-cable & Case and Galaxia Emporia have different work culture and purpose of working. No-cable & Case is mobile shops and repair company which mainly offers its services through the physical store while in case of Galaxia Emporia, the company mainly deal in the online business (Krug, Wright and Kroll, 2014). So, both the organizations have different working culture and also they have a different business purpose. In case if the team members of No-cable & Case leave for an international assignment, HR manager needs to provide training to employees so, they can make effective interaction to each other.
In addition, in the implementation of performance management, organizations should also provide reward and motivation. In each country, HR management has a different reward system. In the Singapore and Malaysia, the management uses non-financial reward and motivation techniques such as providing “employees of month” or giving promotion (Deng and Yang, 2015). On the other hand, in Australia, management have to use the financial techniques such as providing extra salary. In the host country, home country and third country all method for evaluating performance can be evaluated. So, the management has set different criteria in each case. In addition, the new management also set all performance rate criteria ahead on time and provide a clear picture of the international merger. On a timely basis, they also should collect feedback from employees so they can make further improvements in performance management.
Conclusion
Summing up the present report, it can be concluded that, in the international merger and acquisition, HR manager had to face many types of issues. When two business organizations are merged with each other there are a lot of differences which appear in the culture, work environment and conflicts among employees. These all issues are anticipated so HR manager needs to take effective steps to overcome these issues. As present in above case, the management of cable & Case and Galaxia Emporia are merging. Both organizations, in the case of HR should take effective actions to follow international compensation and improve performance.
References
Bauer, F., Matzler, K. and Wolf, S., 2016. M&A and innovation: The role of integration and cultural differences—a central European targets perspective. International Business Review, 25(1), pp.76-86.
Cooper, C.L., Liu, Y. and Tarba, S.Y., 2014. Resilience, HRM practices and impact on organizational performance and employee well-being: International Journal of Human Resource Management 2015 Special Issue.
Deng, P. and Yang, M., 2015. Cross-border mergers and acquisitions by emerging market firms: A comparative investigation. International Business Review, 24(1), pp.157-172.
Ellis, K.M., Lamont, B.T., Reus, T.H. and Faifman, L., 2015. Mergers and acquisitions in Africa: A review and an emerging research agenda. Africa Journal of Management, 1(2), pp.137-171.
Ferreira, M.P., Santos, J.C., de Almeida, M.I.R. and Reis, N.R., 2014. Mergers & acquisitions research: A bibliometric study of top strategy and international business journals, 1980–2010. Journal of Business Research, 67(12), pp.2550-2558.
Gomes, E., Angwin, D.N., Weber, Y. and Yedidia Tarba, S., 2013. Critical success factors through the mergers and acquisitions process: revealing pre?and post?M&A connections for improved performance. Thunderbird international business review, 55(1), pp.13-35.
Krug, J.A., Wright, P. and Kroll, M.J., 2014. Top management turnover following mergers and acquisitions: Solid research to date but still much to be learned. The Academy of Management Perspectives, 28(2), pp.147-163.
Lebedev, S., Peng, M.W., Xie, E. and Stevens, C.E., 2015. Mergers and acquisitions in and out of emerging economies. Journal of World Business, 50(4), pp.651-662.
Marks, M.L. and Mirvis, P.H., 2015. Managing the precombination phase of mergers and acquisitions. In Advances in Mergers and Acquisitions (pp. 1-15). Emerald Group Publishing Limited.
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