The significance or otherwise impact of change in the modern entrepreneurial world is irrefutable. Today, the growth, expansion, and continuous development of various for-profit and non-profit organizations are owed to the changes that the said organizations go through. Essentially, as much as change is considered a time of opportunity for some organizations, it is considered a time of loss for other organizations. Besides, change could be considered a form of disruption or threat to the existence or survival of other organizations in a given market or industry (Cummings and Worley, 2014, p752). It is vital to note that the way change is managed is the determinant of whether an organization will survive, thrive, or disappear in a specific business environment. The inherence of change is irrefutable, and every for-profit and not-for-profit organization either in the private or public sector must undergo changes to achieve the objective of remaining relevant, which is one of the major strides towards profitability and success (Gill, 2002, p 308).
Organizational change occurs in various forms, which include the embrace of technological advances, bowing to economic and political pressures that could see the restructuring of the organizational leadership, decreasing or increasing the cost or prices of products or services, enhancement of human resource management, or engagement in mergers and acquisitions (Goksoy, 2016, p 193). In the recent years, organizations have focused more on mergers and acquisitions to remain relevant in various business environments although these strategies of change have faced strong opposition and resistance from within and outside the organizations taking part in the same.
Regardless of the way changes take place in organizations, one of the key factors that determine the success or failure of organizational change is change management. This is the process through which involved organizational stakeholders take a structured and well-planned approach to ensure that an organization is aligned with a given change (Goetsch and Davis, 2014, p 10). In the real sense, every stakeholder inclusive of organizational employees must be aware of the anticipated changes and understand what the change means for them. Through this, the sustenance and accommodation of various organizational changes are not jeopardized because the involved stakeholders will have behaviourally adjusted. Arguably, a successful change management requires that the individuals masterminding the change should clearly articulate the reasons for making the change. Besides, it is important that organizational employees should be involved earlier in every change process to prevent resistance that could challenge the process. Moreover, frequent communication between organizational managers and employees is important for every change process, as it ensures that the managers understand and familiarize with the needs of customers and vice versa. Furthermore, to ensure successful change processes, organizational stakeholders should strive to acknowledge and celebrate the past of parent organizations as well as establish new cultures and structures that meet the demands of employees.
With these perspectives in mind, the focus is on the changes expected at First Watch Ltd, also known as FW Ltd, and Gaze Inc, also known as G Inc. FW Ltd is a renowned British company that manufactures lenses for specific vision correction. The company is not only found in Britain but also has a network of sales and distribution sites across Europe and Australia. It is anticipated that FW Ltd will merge with Gaze Inc, which deals with eye-care products such as surgical and pharmaceutical products and contact lenses. The primary purpose of the merger that was to take place in 2014 was to see the two organizations form a global company, particularly through the sales of shares. The global company would not only see an expansion of the services provided by both but would also enhance profitability, which is the objective of every organization. This paper is divided into three sections: characteristics of the merger, analysis of impact and culture, and the recommendations for the change agent. This paper recommends that the change agent should maintain the culture and structures of both organizations, as this would be integral in the prevention of resistance not only from the employees but also other key stakeholders involved.
Mergers and acquisitions serve the purpose of ensuring that organizations remain relevant and competitive in specific business environments, and the achievement of this objective is dependent on the improvement of the organization that is to be acquired. It is anticipated that the merger of the two organizations will result in both hard and soft changes. The hard changes will be evident in the structural changes such as the increase or decrease of employees, the relocation of the headquarters of the parent organizations, and the change of leadership. On the other hand, soft changes will be evident in the cultural and motivational changes.
With these perspectives in mind, one of the characteristics of the merger is that the hard changes such as the change of the structure of the parent organizations have clearly defined timescales. The timescale of the moving on of the Directors of FW Ltd paving the way for new leadership is clearly defined. Moreover, the restructuring of support services such as Finance and Human Resource, with the intention of seeing an improvement in the provision of services to customers, is one of the hard changes with clearly defined timescales (Doppelt, 2009, p 105). On the other hand, the timescale of the soft changes merger such as the change of organizational culture are not clearly defined.
Another characteristic of the merger is that the resources needed are identified. It is argued that the merger of the two organizations would occur through the sales of shares. Simply put, the two organizations were to sell their shares as a single corporation. This means that Gaze Inc would retain its manufacturing sites in the US and Mexico whereas FW Ltd would continue manufacturing in the UK. The newly created organization would also leverage on the production of lens products and pharmaceuticals that were initially produced by G Inc and FW Ltd.
Also, a characteristic of the merger is that its objectives both for the hard and soft changes are specified. As mentioned earlier, the organizations would have to undergo hard changes such as a restructure of the employees and leadership. The specified objective of these changes is to see an increase in profitability, expansion, and continuous growth regarding the number of customers and market share (Fullan, 2014, p 40). It should be noted that before the merger, FW Ltd accounted for 10% of the European sales market, with 25% the European market share owed to its specialist lenses. On the other hand, Gaze Inc enjoyed a large market share in America, and its excellent operations in the said market were attributed to the excellent performance exhibited by over 8,500 employees. The merger would result in the establishment of one profitable company with the mission and values, as well as the same ways of working, and this is an objective of the anticipated changes.
The merger is also characterised by the fact that the managing group of both organizations would be in control of the resultant company. It is anticipated that the CEO of G Inc., Dan Oakes, will be the overall head of the created company with its headquarters in the United States.
It is should also be noted that a characteristic of the merger is that there is resistance from employees of both organization, and this indicates that the sources of the problem facing the merger lies within the organizations. Arguably, First Watch has been subjected to several takeovers, and this has resulted in most of its employees becoming cynical of the acquisitions. On the other hand, employees of G Inc would resist the change if the structural changes would result in loss of their positions.
Analysis of the impact of structure and culture
To ensure successful change process during the merger, there are key steps that the stakeholders involved should follow. First, the stakeholders should give clear articulations why the change is important and they should make the employees and other stakeholders aware of how the prospective company would look like. Second, the stakeholders should ensure that every employee of both organizations is involved in the process of change. Third, frequent communication horizontally and vertically is vital for a successful change process for both FW Ltd and G Inc. Also, the managers of both organizations should ensure that the past is celebrated and acknowledged, as this will motivate the employees to shift to the new company. the establishment of new cultures and structures is also essential in ensuring a successful change process for both organizations. Moreover, the revision of the new changes is important as it will enable the employees and other stakeholders familiarize. However, failure to follow the aforementioned steps will put the existing cultures and structures in jeopardy, and this will affect the management of the merger.
As mentioned above, the involvement of employees in the change process and frequent communication is vital. The steps would make the employees aware of the prospective relocation of the organizational headquarters as well as the change in organizational leadership. For instance, it is expected that the merger will be headed by Dan Oakes, who is the CEO of Gaze Inc. This implies that the position of the CEO at FW Ltd will be done away with, and this move would face resistance from employees and other stakeholders of FW Ltd in case they are not involved in the change process jeopardizing the management of the merger. Also, the employees should be involved and made aware of the fact that the merger will see either a reduction or increase in the employees of both companies. The failure to communicate with the employees could affect the customer relations (Chen and Popovich, 2003, p 673), and this will have negative impacts on the management of the merger.
The move of either increasing or decreasing the number of employees of Gaze Inc would face resistance, and this would have negative impacts on the management of the merger. Besides, increasing the employees would be accompanied by additional operational costs, and this would jeopardize the management of the merger. It should also be noted that the decrease or increase in the number of G Inc’s employees will compromise the provision of services and customer relations. As noted earlier, to enhance customer relations, organizations should strive to retain their employees, a perspective that would be compromised by the merger of the organizations thus having a negative impact on the management of the merger.
Other than the structures, the cultures of the two organizations would be changed by the merger, and this would have impacts on its management. To start with, First Watch Ltd has a culture that sees the manufacture of solid and reliable products, which have not changed for many years. The lack of change in the solidity and reliability of products has enhanced the loyalty of customers. Also, First Watch Ltd has a culture where each employee has the obligation of meeting the requirements of their role, and has not only ensured the production of high-quality products but has also enabled the organization’s sales team to stress its dependability thus facilitating the distribution of products throughout Europe. Another culture of FW Ltd although negative is that has undergone myriads of takeovers, and this has rubbed the organization’s employees the wrong way. Notably, the merger would result in a change of FW Ltd’s culture that sees the manufacture of solid and reliable products, and this would compromise the loyalty of customers.
The compromise of the loyalty of customers would mean a loss or a reduction in the number of customers (Beech and MacIntosh, 2012, p 97), and this would affect how the merger is managed. As noted earlier, the merger would be under a new leadership, and this would result in a change of FW Ltd’s culture where employees have the obligation of meeting the requirements of their role. The new leadership would come up with new policies that would demoralize or suppress the employees thus affecting organizational performance, productivity, and profitability. The new management would have a hard time controlling the employees, and this would negatively impact the distribution of its products to various markets. However, the merger would see a change of FW Ltd’s culture of incessant takeovers, a perspective that would serve as an encouragement to FW Ltd’s employees paving the way for an effective management of the merger.
The merger would also result in the change of Gaze Inc’s culture, and this would interfere with the management of the merger. Gaze Inc has a culture that focuses on the investment in Research and Development. Besides, its culture stresses the development of innovative products with the aim of meeting patient sight needs for a range of diseases and vision corrections. G Inc also has a culture that upholds a dynamic, collaborative work environment. Irrefutably, under the new leadership and structure, G Inc’s culture that focuses on investment in Research and Development would be changed, and this would not only face resistance from involved stakeholders but would also jeopardize the management of the merger (Beech and MacIntosh, 2012, p 97). The merger’s focus would also shift from the development of innovative products resulting in employee turnover that would have negative impacts on its management. It is anticipated that the merger would deviate from upholding a dynamic collaborative environment particularly under the new leadership, and this would impact negatively on its management.
The merger of FW Ltd and G Inc would compromise the culture and structure of both organizations resulting in resistance from every stakeholder including employees and customers. Thus, to address the resistance to change, it is recommended that the change agent should give clear articulations of reasons for the merger and how it is beneficial to both organizations. The change agent should give reasons why the headquarters of the prospective company should be shifted to the US. The change agent should also articulate clearly the reason for maintaining G Inc’s headquarters in the US as well as increasing or decreasing the number of employees. It is also important that the change agent should involve the employees of both G Inc and FW Ltd in the change process to avoid resistance that would jeopardize the merger. Moreover, a key strategy of eliminating possible resistance is frequent communication, and this should be embraced by the change agent. Also, the change agent should ensure that the past of G Inc and FW Ltd is acknowledged and appreciated. Most importantly, the change agent should establish new norms, cultures and structures that meet the demands of the employees and other stakeholders. For instance, the frequent takeovers witnessed previously at FW Ltd should be abandoned. It is also vital for the change agent to revise and repeat the change process to ensure the employees of both organizations familiarise with the new contexts, cultures, and structures.
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