Week 3 Discussion
Discussion Instructions:
For this week’s discussion, you will want to think about the materials from the text and the lecture and then address the following in your initial posting:
You have just taken over as an executive in a large company, and shortly after you start you find out that the company is going to be merging with another company very soon. You were not aware of this when you took the job, but regardless, the situation has now been brought to your attention from the CEO in one of the first executive meetings that you attend. During the process of merging with the other organization, it is likely that there will be some restructuring and based on that there will also be some people let go. No one else in the organization is aware of what is going on outside of the executive team.
You learn that there is already culture and morale issues within the organization and there is a fairly high turnover rate among the employees. So, the concern is that this type of merger is going to make things even worse in terms of morale and increase turnover even more. You are working to come up with communication to the employees to let them initially know that the merger is coming.
What is the best way to communicate this type of news to a large organization, and why?
Who should the communication come from an why?
What are the most important things to consider when initially communicating this news to the rest of the organization?
What other information should you have (other than what was provided above) before you communicate to the organization, and why?
Draft what you would recommend be said to the employees (it can be right in the discussion area as opposed to a separate document), and after you have drafted the communication, explain why you included what you did in the communication. Keep in mind that if you state the communication should be face-to-face, this can be a transcript. If you state the communication should be in a written format, you can provide an example of the written format of the communication.
Make sure that you post your substantive initial posting no later than Saturday this week, and be sure to use outside support for your posting. This should be from reliable sources (other than the text book), and you need to reference the sources using proper APA Version 7 formatting.
In addition to your initial posting, you need to respond to at least three classmates’ initial posts to provide comments, insights, or questions that further the discussion. Your responses need to be substantive, and should move the discussions forward.
My Discussion Post:
Managing change in an organization can be difficult, especially when the change threatens job security for the employees. Mergers and acquisitions are complex for employees, considering they might not have a future at the company, leading to lower morale and a higher turnover rate (Sigamoney et al., 2019). During this time, upper management must restore morale and ensure people keep working efficiently (Bright & Cortes, 2019). Most companies frame the negative news positively by focusing on new opportunities instead of possible job cuts. This is a good strategy for re-focusing employee priorities. However, one must keep in mind that the employees are feeling restless. Employees are the most essential consideration in designing communication during such a change. Other information that can help in effective communication is understanding the purpose of the change and the structure of the change.
The best way to address organizational-level change is through an email to all employees. Such communication must come from the highest level of management. A CEO communicating the message might be ideal. The communication can look like this:
We are pleased to announce our merger with Beta Corporation. Beta Corporation is a global leader in the industry and is driving innovation. Both companies have strived for development and growth, making mergers the next ideal step for both organizations. This merger will allow us to expand further and focus better on our consumers. It will open up new exciting opportunities that we look forward to sharing with all of you. However, we still remember those who made it possible for us to reach this far: our employees. We remain dedicated to our employees and their development. We look forward to your support and a smooth onboarding process.
The above communication focuses on the merger’s positive aspects and does not discuss potential layoffs. Moreover, it lifts employee morale by discussing company loyalty without making specific promises. The message delivers negative news positively, making it suitable for the current situation.
References
Bright, D. S., & Cortes, A. H. (2019). Principles of management. OpenStax.
Sigamoney, C., Attwarie, N., & Deke, A. (2019). The Impact of Mergers and Acquisition on Employee Morale: An Evaluation of H&S Networks in South Africa. Engineering Management Journal, 03(01), 53.
Discussion Responses:
Alejandro J:
Hi, All and to all thank you for sharing your posts. Below is my post for week 3. Thank you.
The best way to communicate this type of news to an organization is to prepare, plan, and execute a transitional presentation or meeting for all employees. The Chief Executive Officer (CEO) can build an organizational structure that includes the new company’s design, changes, and developmental steps necessary for a successful transition. In addition, the managers will have to study and understand the company’s intent, which would be to seek out the most qualified individuals for the merger and avoid particularism, as Mr. Max Weber believed: lecture, Max Weber’s Bureaucracy, Youtube, 2024.
The preparation should start by advertising positive news from the offices of the (CEO) down to the Chiefs and managers. The message transition must come from the Chief Executive Officer (CEO). The CEO must pick his managers rationally, enabling him to formalize and fix each responsibility based on their expertise. In addition, the CEO must enact merging policies, each emphasizing each company’s best business practices, guidance, rules, and regulations to arm the company’s managers with the tools necessary to disseminate the message intended for the union of the two companies critical to enacting the transition.
The critical part here is to create a positive view of the goods the merger will bring so the employees may start communicating with themselves. Avoid negative things, like a possible reduction in personnel, because they will scare good workers into fleeing the company and searching for new jobs. In addition to a positive advertisement of the merger, the managers have to sit down and read the new policies provided because they can see things like whether wages or salaries are being cut to include theirs or are benefits being reduced or added to entice employees to stay. Managers can use this vital guidance during meetings with peers and colleagues.
Finally, the Chiefs can draft recommendations based on feedback from each of their managers. The feedback will include the message communicated to the employees, concerns, pros, cons, and positive or negative comments, which will contribute to the formatting of the meeting the company wants to present during the merger introduction to all employees.
References
Max Weber Beaucracy [https://youtu.Be/zp554tcdWO8], 2019.
Keisha:
What is the best way to communicate this type of news to a large organization, and why?
Written communication such as an email should be sent to all employees from both companies. A media press release should also be written so it can be issued at the same time employees are notified. This approach will minimize information leakage to and from news media outlets. When communicating news or organizational change, an organization must first establish a transition team that consists of executives and key mid-level leadership from both organizations. It would also be prudent to hire an Organizational Development (O.D.) consultant to supervise the planning, execution, and completion of the integration process.
Who should the communication come from and why?
The email or letter should come directly from the Chief Executive Officers (CEO) of both companies for transparency and consistency purposes but most importantly, to hold employee trust. It is estimated that 30% of employees do not trust their employer’s leadership (Behbahani, 2023) due to poor communication. Learning about major organizational changes from anyone other than the CEO would be a public relations disaster and would erode trust from employees from both companies as well as prospective employees.
What are the most important things to consider when initially communicating this news to the rest of the organization?
It is important that both organizations are transparent about why the merger is happening in the first place. For employee engagement purposes, leadership should host in-person and live virtual information sessions reiterating what was said in the letter but to allow for questions to be asked and answered. This would be the perfect time to share the new corporate vision so employees can understand the direction of where the organization would like to go and to be clear about next steps (Hart, 2022).
What other information should you have (other than what was provided above) before you communicate to the organization, and why?
A timeline from the merger announcement to the completion of the acquisitions should be apart from the initial announcement or immediate next step. Anticipate the top ten likely questions employees will ask by developing a “FAQs sheet” as an insert or second page. As it relates to being honest, it can be stated on the FAQs sheet that it is possible that there will be a workforce reduction as a result of the merger.
What is the best way to communicate this type of news to a large organization, and why?
Written communication such as an email should be sent to all employees from both companies. A media press release should also be written so it can be issued at the same time employees are notified. This approach will minimize information leakage to and from news media outlets. When communicating news or organizational change, an organization must first establish a transition team that consists of executives and key mid-level leadership from both organizations. It would also be prudent to hire an Organizational Development (O.D.) consultant to supervise the planning, execution, and completion of the integration process.
Who should the communication come from and why?
The email or letter should come directly from the Chief Executive Officers (CEO) of both companies for transparency and consistency purposes but most importantly, to hold employee trust. It is estimated that 30% of employees do not trust their employer’s leadership (Behbahani, 2023) due to poor communication. Learning about major organizational changes from anyone other than the CEO would be a public relations disaster and would erode trust from employees from both companies as well as prospective employees.
What are the most important things to consider when initially communicating this news to the rest of the organization?
It is important that both organizations are transparent about why the merger is happening in the first place. For employee engagement purposes, leadership should host in-person and live virtual information sessions reiterating what was said in the letter but to allow for questions to be asked and answered. This would be the perfect time to share the new corporate vision so employees can understand the direction of where the organization would like to go and to be clear about next steps (Hart, 2022).
What other information should you have (other than what was provided above) before you communicate to the organization, and why?
A timeline from the merger announcement to the completion of the acquisitions should be apart from the initial announcement or immediate next step. Anticipate the top ten likely questions employees will ask by developing a “FAQs sheet” as an insert or second page. As it relates to being honest, it can be stated on the FAQs sheet that it is possible that there will be a workforce reduction as a result of the merger.
Company Merger Draft Letter
March 30, 2024
To: All Employees, Eastern Shore Credit Union
From: Keisha Allen, CEO
RE: Eastern Shore Credit Union to acquire Old Bay Credit Union
Dear Valued Employee:
We are excited to share with you through this letter that Eastern Shore Credit Union will acquire and merge with Old Bay Credit Union on July 1, 2024.
Old Bay Credit Union has been a leader in providing banking services to municipal employees and retirees of five towns, 55 places of worship and community colleges in four counties of the lower Eastern Shore since 1930. As we experience overall population loss and fierce competition with traditional banking institutions, we believe that together we can increase our capacity by having a presence in all eight counties that encompasses Maryland’s Eastern Shore.
With this wonderful change, we will close our respective Chestertown and Cambridge headquarters to lease new space in Wye Mills to make it convenient for the daily commute of employees and accessible to our business partners and most importantly, our loyal customers.
Although we are excited about the marriage and journey of our legacy institutions, we want to be transparent with you and share that we expect to reduce our workforce by 10% (approximately 40 positions) by the end of the current fiscal year. Although we are uncertain which positions will be eliminated, we will offer a generous severance package and an employee letter of recommendation.
Over the next 2 weeks, we will have in-person and virtual town hall meetings discussing the next steps of the 90-day integration process. Thank you for your service to Eastern Shore Credit Union and Old Bay Credit Union.
The best is yet to come!
Sincerely,
Keisha Allen, CEO
Easter Shore Credit Union
Jayne Q. Public, CEO
Old Bay Credit Union
References
Hart, B. M. (2022, October 20). 7 tips for communicating with staff during M&As. Journal of Accountancy.
https://www.journalofaccountancy.com/news/2022/oct/7-tips-communicating-staff-during-m-a.html
Behbahani, N. (2023, October 27). Employees don’t trust their Leadership mainly due to lack of inefficacy, inconsistency
and poor communication! https://www.linkedin.com/pulse/employees-dont-trust-leadership-mainly-due-lack-poor-behbahani-xomif
Nicholas:
1 – What is the best way to communicate this type of news to a large organization, and why?
Written communication and face-to-face meetings would be the best way of communicating the merger. I would first send an internal email or letter announcing the details and explaining the reasons and benefits merger along with letting everybody know that a reduction of member will happen. The email will also include a face-to-face employee meeting invitation for employee to express their doubts concerns and to plan their future. Using this two forms of communications will demonstrate that I, new CEO, am already working on building transparency, openness and trust.
2- Who should the communication come from and why?
As a the CEO of the company it is my responsibility to deliver the merger news. By doing so, people will see a new leader working on changing the old script and replacing for the the new one with a message of transparency, openness and trust.
3- What are the most important things to consider when initially communicating this news to the rest of the organization?
The company must provide an honest, clear, simple, to the point and empathetic message in regards to what is expected to happen and to obtain from the merger to have a smooth merger transition. It is important that the employees understand the objective of the merge and it possible outcomes.
4- What other information should you have (other than what was provided above) before you communicate to the organization, and why?
Before communicating the merger to the organization, I should know and have the time it will take the merge to be completed, how employees will be affected and have created a FQAs with possible questions employees will ask.
Draft – video link sent via email.
Dear Team,
I hope this message finds you well. I am here to share significant news about the future of our company. Our company will be merging with another company in the coming months. The decision was made to strengthen, solidify and ensure the growth and long term success of our company.
We understand that mergers and acquisitions create uneasy feelings and doubts. We also know that most of you will are already writing down a list of questions and concerns regarding your current position and future role in the company. Let me tell you, we are here to provide clarification, guidance and support through the whole process.
During the next weeks everyone will be provided with more details regarding the merger timeline and what to expect. At the bottom of this email you will also find a link to schedule a face-to-face meeting with your supervisor or team leader. At the meeting you will be able express all of your concerns and your expectations for the future and receive the necessary support to complete the transition.
Thanks to everyone for your every day dedication, hard work and effort to make the our company great. I look forward to embarking this new journey together.
Sincerely,
Nicolas Bianchi
CEO
Explanation:
I wrote a clear, direct and instructional email. It also includes empathy and honesty to demonstrate care and build trust.
References –
Thompson, Julie. (2023, March 28). How to handle internal communications during a merger. https://www.business.com/articles/communicating-during-mergers/
Guest, Rosie. (2021, December 2). Five Priorities For Communicating During Mergers and Acquisitions. https://www.forbes.com/sites/forbescommunicationscouncil/2021/12/02/five-priorities-for-communicating-during-mergers-and-acquisitions/?sh=4ecb840526e8
Lark Editorial Team (2023, December 25). How to Communicate About a Company Merger Professionally.
https://www.larksuite.com/en_us/topics/business-communication/how-to-communicate-about-a-company-merger-professionally
Grossman, David (2023, September 18). How to Communicate A Merger or Acquisition in Nine Steps.
https://www.yourthoughtpartner.com/blog/merger-acquisition-communication-plan
Giovanni:
Hello,
Please see my response to this week’s discussion:
In the given scenario of being hired to work for a company that will eventually merge with another, the situation can seem somewhat challenging and confusing. Discovering existing culture and morale issues within the company, coupled with a high employee turnover rate, complicates the task of informing all employees of the impending merger, or in other words, “change.” This difficulty arises from the potential exacerbation of the company’s existing culture and morale problems.
The best approach to communicate this news with the entire workforce would be to inform them ahead of time, preferably before the merger is completed. This proactive communication strategy would foster transparency between employees and their employers, allowing them to anticipate how their future career goals, job titles, schedules, and potential ways of working might be affected and whether these changes align with their expectations. This scenario exemplifies organizational change, as discussed in Chapter 10: Organizational Structure and Change.
Regarding who should convey the news of the merger to the organization, an examination of the formal organizational structure outlined in the traditional organizational chart provided in Chapter 10 is warranted. Given that the CEO occupies the top position in the organization, they are the natural leader responsible for communicating such significant changes, leveraging their influential leadership role. In the case of an informal organizational chart, the CEO’s assistant or the company president could handle the communication, allowing the CEO to prepare a more professional explanation for the changes being made.
Furthermore, additional information should primarily focus on two key aspects: firstly, understanding the true reasons behind the agreed merger, such as whether it will facilitate company growth, streamline workload, or create more career growth opportunities. Secondly, it’s crucial to gauge how employees perceive and anticipate these significant changes within the company and how they believe it will impact them, both positively and negatively. This aligns with the discussions in Chapter 11: Human Resource Management, emphasizing the importance of understanding employee reactions to company goals and ensuring alignment with their career and personal aspirations.
Given the sensitivity of the situation and the existing challenges with culture and morale, it’s imperative to communicate the impending merger with transparency and empathy. Therefore, I recommend scheduling a town hall meeting or sending out a company-wide email to inform employees of the merger ahead of time. This proactive approach will afford employees the opportunity to process the news and understand its potential impact on their roles and the organization as a whole. Additionally, addressing their concerns and providing avenues for open dialogue will ensure that their voices are heard throughout the process, thereby fostering employee engagement and mitigating negative repercussions. This communication strategy is in line with the principles of organizational change discussed in Chapter 10 and underscores the importance of effective communication and employee engagement, as emphasized in Chapter 11.
[Transcript]
Speaker (Executive): Good morning, everyone. I wanted to address an important matter that has recently come to light. As some of you may already know, our company is in the process of merging with another organization. This news may come as a surprise, but it’s crucial that we approach this situation with transparency and empathy.
Our priority is to ensure that everyone is informed ahead of time. I recommend scheduling a town hall meeting or sending out a company-wide email to inform all employees of the merger. This proactive approach will give everyone the opportunity to process the news and understand its potential impact on their roles and the organization as a whole.
Additionally, we need to address any concerns and provide avenues for open dialogue throughout this process. It’s essential that everyone’s voices are heard, and that we work together to mitigate any negative repercussions. This communication strategy aligns with the principles of organizational change and underscores the importance of effective communication and employee engagement.
Thank you for your attention, and please feel free to reach out if you have any questions or concerns with the Human Resources Department.
References
Leocontent. (n.d.). Chapter 10 Organizational Structure and Change [PDF]. Retrieved from https://leocontent.umgc.edu/content/dam/course-content/tus/bmgt/bmgt-160/document/Chapter10Reading_OrganizationalStructureandChange.pdf
Leocontent. (n.d.). Chapter 11 Human Resource Management [PDF]. Retrieved from https://leocontent.umgc.edu/content/dam/course-content/tus/bmgt/bmgt-160/document/Chapter11Reading_HumanResourceManagement_BMGT160LockedModelPrinciplesofManagement2225.pdf
Thank you,
Giovanni
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