The modern business environment has seen a lot of cross-border mergers and acquisitions taking place as an effective measure of gaining competitive advantage. However, there are human resource management factors that could lead to its failure. Some of them include clashing corporate cultures, lack of employee involvement, and failure to maintain clear communication (Brueller, Carmeli, & Markman, 2018). In cross-border M&A, cultural clashing between the involved enterprises could cause a significant decline in the performance of the new firm formed. Clear communication is important as it enables sharing of ideas to continue growth and expansion strategies (Ahammad, Tarba, Liu, & Glaister, 2016). Finally, failure to include employees in the merger or acquisition process may cause conflict in the implementation of new operational practices. It is also likely that the process in itself may cause anxiety and fear among members of the workforce resulting in employee turnover with the fear of losing their jobs.
It is important that the senior HRM executive conducts an effective evaluation of the corporate cultures of the two or more companies. The idea here is to compare the practices in each firm and how well they align to prevent need for drastic changes in the operational and training of the new members (Brueller, Carmeli, & Markman, 2018). In regards to the issue of communication, organizations may withhold information as a precaution to possible collapse of the deal (Ahammad et al., 2016). The senior HRM executive should clearly identify information that is critical to the smooth completion of the M&A. Non-disclosure and non-compete contracts may be used when intellectual property may have to be shared before the deal goes through. To successfully push the deal through, it is essential that people management and human resource audit is conducted on both sides (Brueller, Carmeli, & Markman, 2018). The issues surrounding the deal, compliance concerns, and needs of the employees should be addressed early on to prevent future troubles.
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References
Ahammad, M. F., Tarba, S. Y., Liu, Y., & Glaister, K. W. (2016). Knowledge transfer and cross-border acquisition performance: The impact of cultural distance and employee retention. International Business Review, 25 (1), 66-75.
Brueller, N. N., Carmeli, A., & Markman, G. D. (2018). Linking merger and acquisition strategies to postmerger integration: a configurational perspective of human resource management. Journal of Management, 44 (5), 1793-1818.
