Mergers

CURRENT ISSUES SERIES

Mergers and Acquisitions: The Role of HRM in Success

Carolyn Kristjanson Love

IRC Press

Industrial Relations Centre Queen’s University Kingston, ON K7L 3N6 Tel: (613) 533-6709 Fax: (613) 533-6812 E-mail: ircpress@post.queensu.ca Visit our Website at:

http://qsilver.queensu.ca/irl/qsirc/

Queen’s University

ISBN: 0-88886-517-1 © 2000, Industrial Relations Centre Printed and bound in Canada

Industrial Relations Centre Queen’s University Kingston, Ontario Canada K7L 3N6 Publications’ Orders: 613 533-6709

Canadian Cataloguing in Publication Data

Love, Carolyn Kristjanson Mergers and acquisitions : the role of HRM in success (Current issues series) Includes bibliographical references. ISBN 0-88886-517-1 1. Personnel management – Canada. 2. Consolidation and merger of corporations – Canada – Management. I. Title. II. Series: Current issues series (Kingston, Ont.). HF5549.2.C3L68 2000 658.3’00971 C00-930777-X

Executive Summary

Since the 1980s dramatic changes in the global business environment have been driving a wave of mergers and acquisitions (M&A) in Canada. Although they are undertaken for good reasons, many high-cost mergers and acquisitions fail to meet their objectives, in part because human resource (HR) issues are generally poorly understood, undermanaged, and often discarded at the outset as irrelevant to the strategic planning process. This study of the strategies of forty-four Canadian companies with active M&A programs will help practitioners by providing a clearer understanding of the vague ‘people problems’ that are often cited in merger failures. By linking particular HR strategies to the ultimate success or failure of a merger or acquisition, it shows how to avoid the common pitfalls and identifies policies that are more likely to succeed. • Failed M&A events are most likely to involve workforce reductions in the target that begin within two months of the purchase, affect more than 10 percent of the target’s workforce, and...