IHRM Chapter 4

1.
a. A merger is when two companies come together and form a new
company. (Company A + Company B = Company C)
b. An acquisition is when one company buy a new company to form a
larger company. (Company A + Company B = Larger Company A)
c. An international joint venture is when two companies come together to
form a team, but are still two separate companies. (Company A +
Company B = Company A AND Company B)
2.
a. The first is the pre-M&A phase. Essentially, this is where you want to
get all of your ducks in a row. Assessment of the people and educating
the team is a couple of key points.
b. The second is the due diligence phase. This is where you need to plan
out the financial aspect of merging the two organizations. You will also
need to identify and assess cultural issues.
c. The third is the integration planning phase. This is where you start to
merge and plan how you will get along. Things like coping with
change and creating a staffing plan is a part of this phase.
d. The fourth and final is the implementation and assessment phase. This
is where the two companies are officially merged. The newly formed
company will align their HR practices and start monitoring the
integration.
e. The HR implications are relatively small in the beginning of the M&A,
but continue to grow as each phase progresses. It starts with education
of those HR implications, but leads to monitoring/assessing of the
implementation.
3.
a. The first is the formation stage. This is where companies want to
identify why they are wanting to do this and then search/decide who
would be a good partner. In terms of HR, this could be thought of as an
interview for a new partner. They want to properly asses another
company to see if they are a good fit.
b. The second is the development stage. This is where they establish
structure and getting the right senior management together. Like the
first stage, this would be like an interview for HR. You want to make
sure the senior management has the exact same mindset the
companies have or the IJV will not work.
c. The third is the implementation stage. This is where the companies
want to establish a vision, mission, values strategy and structure that
they seem will work. For HR, this is important because policies and
practices need to be developed.
d. The fourth and final is the advancement and beyond stage. This is
about learning from the partner and transferring knowledge. HR
systems need to be established for support of knowledge to and from
the parent companies.
4. Cultural and institutional differences can impact HR integration in M&As and
IJVs greatly. An example would be if a company has more of a straight
forward, almost rude approach to business. The other has a more indirect
approach to business. This could lead to the first company getting frustrated
and the second company being scared or overwhelmed.
5. There are many barriers to internationalization for SMEs. A couple of those
include inability to contact oversees customers and limited ability to locate
markets.
6. One of the challenges for HR in SMEs is the recruitment, selection and
retention. There is a scarcity of qualified managers. Also, smaller firms have a
harder time in this process compared larger companies. Another challenge is
limited resources. Some of the limited resources are financial capital and
smaller control over internationalization processes.