Table of Contents
Identify and define the problems:
Cultural conflict is the first problem in merging the two companies; Edeling and Royal Biscuits. The merger was been termed as 'merger of equals' but in the real sense Royal Biscuits was in the long run expected to reap more benefits than Edeling. The merger was considered more difficult because of the time frame and being behind schedule. The merger had problems because the British and German governments had not yet signed off the agreement. Edeling felt that it was an old company whose existing systems and procedures were a product of many years of learning. The political reality of the deal is that there is a winner and a loser where the British company is the winner.
Personal stakes and interest is the second problem due to the new organization leadership and human resource management. This is because Edeling employees thought if workers from Royal Biscuit would have any respect for their company's history. The problem was designing a program that could be embraced by managers of both Edeling and Royal Biscuits. Decision making was experiencing several deadlocks and agreement issues of which managers to occupy leadership positions of various divisions. Royal Biscuits management feared that there would be dilution of culture that he had worked to build over a long period of time. The disagreement between the two human resource executives is on the basis of managerial issues.
Apply theories or conceptual models to the problem
The two top executives should realize that leadership is basically a culture that is cultivated over a long period of time. It is important for them to realize that good leadership in mergers should not be based on individual cultural background but they are aspects that start with recruitment. Leadership is concerned with developing top talent and identifying the best leaners and giving them the benefit of expert instruction.
The merger between the two companies should not be based on national differences. It will be important for Wallach and Brighton to have a global perspective. This requires that the two top executives viewing the things in a different way. The implication is that they should stop thinking like British or Germans and start thinking at some higher level. In this context a culture clash can truly undermine the merger between Edeling and Royal Biscuits.
Describe alternative decisions or course of action
The need to acknowledge that the spirit of commerce knows no country hence those who practice commerce are deeply shaped by their cultural roots. The two firms should ignore this ideology and have a cross border context. They should also put aside differences in language, customs, and values. There should be clear recognition of the acquiring company to reduce internal power struggles between the management.
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So as to come out of this dilemma Royal Edeling should make a vision for the new company that is clear and appealing to parties on both sides. The vision should give the managers enough authority to implement it. In line with this the merger should create business strategies that neither Edeling nor Royal Biscuits should have undertaken on their own. The non-executive chairman should help the executive teams and boards of both companies to develop new vision, come up with a clear set of expectations a solid operating style and a culture that rises above nationalism.
Evaluate decision alternatives/courses of action for feasibility (cost-benefit analysis or advantages vs. disadvantages or other criteria)
Sharing a common vision is the alternative Royal Edeling can choose. It should be clear to both Brighton and Wallach that they should take the path of least resistance by pooling good ideas from each side without asking how the whole can be greater than the sum of the parts. The advantage of taking this action is that they will start a fresh and create a plan through leading from the middle. The cost benefit analysis of this alternative is that they will be able to align, inspire, and lend direction to those around them. Both Brighton and Wallach should create a personal relationship with each other.
The cost benefit analysis sharing a common vision is that it will promote competency and trustworthy. In addition a common vision will help Brighton and Wallach to coordinate their behavior with one another to achieve a common goal, share the resulting benefits with others who participate and also exclude free riders from these benefits.
Recommend alternatives/courses of action (explain why this is the best choice(s) for addressing the problem - improving the situation and/or avoiding recurrence).
Having a common goal is what the leaders need to define as the alternative course of action. The executive chairman should go further to specify which values the new leadership program should cultivate. There is need to focus the employees on the new goal of beating competition and becoming number one. This is course of action is the best choice because it subsides distrust and resentment within the newly blended Royal Edeling.
Being the CEO John Callaghan must put together a balanced management team from both companies so as to detail a fresh strategy, a new organizational model and guiding principles for the new company. To avoid recurrence of the same Callaghan should not compromise the new company goals and values for the purposes of making some individuals comfortable. He should therefore set out a clear strategy and articulate a new value system to avoid losing on essential projects.
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Discuss implementation/follow up of recommended course of action
Since this is a horizontal merger, Royal Edeling should agree on the implementation strategy. This will ensure that the new company will not be embroiled in contentious battles over organizational issues. The implementation will entail agreeing on which structure to work with or retain and who will oversee the company's strategy and the utilization of working assets. A good implementation for Royal Edeling is to ensure that the company assumes a new global stance with regard to product management, manufacturing operations, financial reporting, and research.
The implementation process will require that Royal Edeling develops a new set of strategic criteria and corporate values to which neither company have previously ascribed and after they should communicate them to the staffs. The new strategies are likely to lead to job cuts so as to enhance cost savings. The new company should come up with task team that in a period of three months will facilitate employee layoffs and ensure that Royal Edeling has a solid footing globally.
In conclusion the qualitative measure of the newly formed merger is the achievement of operational and financial objectives. This should be communicated by the CEO through lying out goals and the time frame of achieving them. Successful implementation will call for an integration transition structure and develop and implement a clear stakeholder communication plan. Callaghan should follow up if all the employees are treated fairly, key customers stay on board, and that integration decisions are made objectively and implemented systematically. Implementation therefore requires a global mindset.