CHAPTER 10

Strategic Alliance: Role of HR

CHAPTER OUTLINE

• Mergers
• Due diligence
• Psychological reactions
• Change agent
• Communication
• Talent management
• Survivors’ syndrome

LEARNING OUTCOMES

• Meaning of mergers and acquisitions (M&A)
• Life cycle of M&A
• Role of human resource (HR) in M&A

INTRODUCTION

In order to have competitive advantage, today’s companies need to have prolific growth, efficiency, profitability, flexibility, and adaptability, visionary and should have a dominant market position. Regardless of industry, however, it appears that it has become all but impossible in our global environment for firms to compete with others without growing and expanding through deals that result in mergers or acquisitions (Schuler and Jackson 2001).

The factors that have driven the M&A activity in the past decade are forecast only to intensify: need for large economies of scale, deregulation, globalization, expanding markets, risk spreading, and need for rapid response to market conditions. Even in a tough financial environment and a declining stock market in 2000, the value of global M&A exceeded $3.5 billion for the first time (Taylor 2001). This in itself corroborates the strategic importance of M&A.

The term “Merger” refers to the combination of two or more organisations to form a new company, which often has a new corporate identity. For example, Reliance Communication and GTL infrastructure, Emami and Zandu, Lipton India, and Brooke Bond.

Acquisition, on the other hand, is the purchase of a company by another company. For example, Bharti Airtel acquired Kuwait-based Zain Telecom’s, ICICI Bank acquired Bank of Rajasthan (BoR).

Besides assessing the risk and potential of the merged entity, it is just as important to derive synergy from the merger or acquisition so that the company can quickly transit into the new entity and operate at its maximum efficiency. This is crucial in meeting the various bigger organisational objectives including growth in market share. To achieve this, it is essential for HR to play a pivotal role in ensuring the smooth integration of HR policies and managing employees of differing work cultures all through the M&A life cycle.

 

It is essential for HR to play a pivotal role in ensuring the smooth integration of HR policies and managing employees of differing work cultures all through the M&A life cycle.

INDIAN SCENARIO ON M&A

There seems to be a great rush of Indian organisation to achieve global status through takeover and consolidation. Indian business leaders are on the shopping spree. This includes IT firms, pharmaceutical industry, tea companies, steel industry, and even spare part producers are trying to enter global market. Recent cases include takeover of Tetley Tea by Tata Tea by spending $435 million. This deal made Tata Tea, the world’s second largest tea company.

There are numerous reasons for companies to merge or acquire. For example, Brook Bond Lipton India through the horizontal merger of Lipton India and Brook Bond has achieved market dominance and economies of scale. The merged company is able to have bigger production volume in comparison to the companies operating separately. The maximum use of plant facilities can be done by the merged company, which will lead to a decrease in the average expenses of the production.

Vertical mergers of Alembic Distributors with Alembic Chemical Works Company has helped them to have channel control. Arcelor and Mittal have merged for the world-class leadership and global reach. In 2011, India’s second largest hospital chain, Fortis Healthcare (India) merged with Fortis Healthcare International the promoters’ privately held company, making Fortis the top most healthcare provider with the approximate total revenue pegged at Rs. 4,800 crores. Fortis India will buy the entire stake of the Singapore-based Fortis International. This company is currently held by the Delhi-based Singh brothers (Malvinder Singh and Shivinder Singh).

The Aditya Birla Group announced its completion of acquiring US-based Columbian Chemicals, a 100-year-old carbon black maker company for an estimated 875 million dollars. This will make the Aditya Birla Group one of the largest carbon black maker companies in the world, doubling its production capacity instantly.

iGate acquired Patni computers, now called iGatePatni, with the aim to increase its revenue, develop capabilities vertically, and broaden the customer base. One of the largest deals in the Indian IT industry in recent years, this has propelled iGate to the billion dollar league, making it easier for the company to win larger deals.

So, to summarize, companies merge and acquire for the following reasons:

• To gain market dominance and economies of scale.
• To gain channel control.
• Hybrid mergers for risk spreading, cost cutting, synergies, defensive drivers
• Growth for world-class leadership and global reach
• Survival; critical mass
• Acquisition of cash, deferred taxes, and excess debt capacity
• Move quickly and inexpensively
• Flexibility; leverage bigger asset base to leverage borrowing
• Adopt potentially disruptive technologies
• Financial gain and personal power
• Gaining a core competence to do more combinations
• Talent, knowledge, and technology today

The Human Side of M&A Activity

Extensive importance is given to the legal, financial, and operational elements of M&A. But executives, who have witnessed the merger process, recognize that the management of the human side of change is the real key to maximizing the value of a deal. Employers now recognize that HR issues are the primary indicator of the success or failure of a deal. The management of the human side of M&A activity, however, based upon the failure rates of M&A, appears to be a somewhat neglected focus of the top management’s attention.

 

M&A takes place to expand or diversify or to leverage the competitive advantage of alliance partner.

Many mergers do not create the shareholder value expected of them. The combination of cultural differences and an ill-conceived HR integration strategy is one of the most common reasons for that failure.

The focus of attention in M&A activity is on other activities such as finance, accounting, and manufacturing.

Reasons for Failure of Mergers

It has been observed that failure rate of M&A’s is more than 70 percent, which is alarming. So, the question arises, why do so many M&A fail to meet expectations? And what can organisations do to improve the chances of a successful deal? Instead of expected increase in financial performance, M&As have become more often associated with lowered morale, job dissatisfaction, unproductive behaviour, increased turnover, and absenteeism, rather than with. An estimate by Davy et al. (1988) blames “employee problems” as being responsible for one-third to one-half of all merger failures.

 

Employers now recognize that HR issues are the primary indicator of the success or failure of a deal.

M&A trigger negative reactions in employees. One of the reasons is that mergers are a source of change for the organisation, and change, in any shape or form is resisted by the employees. During the M&A process, there is lot of uncertainty in the environment regarding the future of the organisation and the employee. These uncertainties, which are strengthened by unclear communication, rumours, and grapevine, cause stress, and anxiety among employees and the employee is grappled by the perceived job insecurity and in turn, this perceived job insecurity is negatively related to organisational commitment, trust in organisation, job satisfaction and ultimately, job performance.

 

M&A leads to uncertainty and ambiguity and causes feeling of job insecurity affecting the organisational performance.

Problems to Be Addressed

1. Psychological Reactions

   M&A appear to be particularly stressful forms of organisational changes that induce a series of dysfunctional individual outcomes in the employees of the firms involved. The uncertainty brought about by the merger or acquisition causes psychological trauma to the employees and management as well and that result in attitudinal and productivity problems as well as turnover of Talented Work force. Layoff is a common phenomenon, when the two firms are merged or acquired. It is pragmatic too. After mergers or acquisitions, job restructuring becomes important and in that process, people who doesn’t fit the restructured organisations are laid-off. But those who are not laid off are grappled by the “survivor’s syndrome.” This results in significant increase in the stress, perceived uncertainty, and absenteeism; significant declines in job satisfaction, commitment, and perceptions of the company’s trustworthiness, honesty, and caring.

    

2. Communication

   Managing the communication process is also a valuable way to retain and motivate key employees. It also plays a critical role in the process of change and the entire stage of integration. A lack of communication or unclear communication leads to confusion, decreased productivity, high levels of uncertainty, and low morale.

   Communication can help employee to mitigate the symptoms of the merger syndrome as the employees are informed about the changes in their environment and hence it reduces uncertainty and ambiguity. So, the transparency in the system is advisable.

    

3. Cultural Compatibility

   Top executives have significant role in shaping and transmitting culture, and hence, when two entities are merging, they are bound to have cultural differences. Cultural differences at the top management level are most likely to influence the merging organisations’ ability to realize synergies.

    

4. Talent Management

   During the M&A, as the workforce is also added, the organisation has to layoff employees who are not required. But due to the uncertainty that prevails, the talented pool starts quitting and hence, the retention of talent becomes important.

    

5. Change Management

   Change is an inevitable consequence of mergers and resistance to the change is also a common phenomenon. But still, to achieve the optimum value of any merger transaction usually requires some changes in the organisational structure, operations, reward systems, and people.

Problems to be addressed are communication, change management, talent management, psychological reaction, cultural compatibility.

THE STAGES OF A MERGER OR AN ACQUISITION PROCESS

Pre-Deal: Based on its growth strategy, the acquirer searches for an appropriate target or partner, assesses potential targets, and develops a plan for executing the deal.

The role of HR is generally ignored at this point. But the need of HRs involvement at this stage is high. They can spot problems that may be overlooked by other members of the management team like assessing people, organisation and cultural fit, educating executives about possible risks.

• Strategic expectations of employees should be analysed. HR must alert the due diligence team to the ways people and related organisational or cultural issues can affect the deal’s key strategic assumptions.
• Leadership commitments of the founder employees should be confirmed by carefully integrating the cultures of the two companies.

Stages of M&A are pre-deal, due diligence, integration, implementation, and evaluation.

Due Diligence: After making the offer, the acquirer ensures that the deal is strategically and economically sound and has a high likelihood of success. Thorough, detailed execution of this stage is critical.

Once a partner has been identified, HR can help assess its culture. A thorough culture audit will avoid certain mistakes by increasing sensitivity and awareness thus stimulating much faster resolution of key disagreements. Corporate attitude and management style need to be assessed.

• People costs (salaries, benefits, programmes, etc.) and potential cost reductions must be validated.
• The legal compliances should be confirmed to verify the right of owners to sell the business.
• Take into account the corporate attitudes and management style differences. If one of the companies follows an autonomous style and other is conservative, but both are very successful as different entities, it will require special concern when they enter into M&A.

  Two facets of the HR function in due diligence:

  1. Defensive—to garner information
  2. Offensive—to bring all human capital assets to the forefront and identify ways of maximizing their value

Integration Planning: The acquirer creates a comprehensive plan for integrating the two organisations. This stage takes place within the first 100 days of the decision to merge and can begin during due diligence if both sides believe the deal will go forward (pending regulatory approvals).

HR has to play an active role in this phase. They need to understand and execute such integration-planning activities as developing employee communication strategies, programmes to retain key talent, and organisational and staffing plans.

 

HR has to play an active role in integration phase. They need to understand and execute such integration-planning activities as developing employee communication strategies, programmes to retain key talent and organisational and staffing plans.

• The HR policies and practices determine the condition of employee relations. Keep the trust intact by communicating effectively and appropriately timed.
• The key talent people should be interviewed and assessed to determine their individual competencies, roles and potential for advancement. Along with this, the objectives for M&A, the goals to be achieved, incentives and performance measures need to be in sync to retain the talent.
• The compatibility of reward and recognition is another vital factor. The alignment of the pay structures, incentives, options, and so on should cater to the organisation’s vision.
• The IT platform should be made common across the whole of new organisation.
• The other factors that need to be considered are retiree/disabled employee liabilities, health plan liabilities, termination benefits, and so on.

Implementation: The final stage builds on all the planning that has gone before. Implementation can take months or even years to complete, depending on the complexity of the deal and the size of the merging companies. In this phase, HR needs to take up role of change agent and help employees in coping with change. The HR issues in this phase are

• administer the new total rewards strategy and framework; design and implement new compensation, benefits, and performance management programmes to support new strategy;
• integrate the workforces, culture, and HR programmes of a newly merged company; and
• restructure a major operating function including structure, staffing levels, roles and responsibilities, and performance metrics.

Evaluation: This is the ongoing process after the merger. The processes need to be assessed and monitored for the smooth functioning of the merged entity. The HRs role in the process, which are listed in the following:

• Assessment of new strategies and structures
• Assessment of new culture
• Assessment of the stakeholder concerns
• Strengthening leadership and staffing

ROLE OF HR IN M&A

Generally, the media flashes the news of the M&A deals with the headlines—“X  company finalizes its merger with company Y at the swap ratio of a:b.” This is evident of the fact that it is the investment bankers who are rewarded for making deals and hence, they tend to ignore or overlook the human issues. But involving the HR manager can influence events so that each company comes out ahead. Pre-, post-, and in-process of the merger, HR is responsible for cultural issues; for increasing innovation; for keeping communication going in all directions (upward, downward, across departments, across organisations); and for lessening the impact on those who are “reduced” and on the survivors. Even at the highest level of the company, HR can have a role. The new leadership team will need to work together on a daily basis, despite cultural and personality differences, power issues, and other barriers. HR can act as a facilitator and also as a coach to individual executives. Personal and team assessments can be helpful in enabling team members to work together constructively.

 

The new leadership team needs to work together on a daily basis, despite cultural and personality differences, power issues, and other barriers. HR can act as a facilitator, and also as a coach to individual executives. Personal and team assessments can be helpful in enabling team members to work together constructively.

Strategist

• Information about the profile and motivators of the employees of the merging entities.
• Understanding the management teams of the other company.
• Analysis of the organisational structure.
• Comparing and contrasting the compensation and benefits policy and labour practices.
• Assessing the cultural fit.

Change Agent

• Aligning the right people to meet the shared goals of the enterprise.
• Advising top management on the merged company’s new organisational structure.
• Formulating strategies for smoothening change, which includes training, selection, separation, and retention strategies.

Communicator

• Developing the communication plan to instil the new vision of the new organisation.
• Developing transparency with the employees.

CONCLUSION

The role of HR is vital in the strategic alliance. If the finance department is “ Brain” for the strategic alliance, HR is the “Heart and the Circulatory system” for the strategic alliance.

Summary

• It is essential for HR to play a pivotal role in ensuring the smooth integration of HR policies and managing employees of differing work cultures all through the M&A life cycle.
• Companies merge to gain market dominance and economies of scale, to gain channel control.
• Hybrid mergers for risk spreading, cost cutting, synergies, defensive drivers, growth for world-class leadership, and global reach: Survival; critical mass, acquisition of cash, deferred taxes, and excess debt capacity, Move quickly and inexpensively, flexibility; leverage bigger asset base to leverage borrowing, adopt potentially disruptive technologies, financial gain and personal power, gaining a core competence to do more combinations, talent, knowledge, and technology today.
• Employers now recognize that HR issues are the primary indicator of the success or failure of a deal. The management of the human side of M&A activity, however, based upon the failure rates of M&A, appears to be a somewhat neglected focus of the top management’s attention.
• During the M&A process, there is lot of uncertainty in the environment regarding the future of the organisation and the employee. These uncertainties which are strengthened by unclear communication, rumours and grapevine, cause stress, and anxiety among employees and the employee is grappled by the perceived job insecurity by the employees and in turn, this perceived job insecurity is negatively related to organisational commitment, trust in organisation, job satisfaction, and ultimately, job performance.
• Problems to be addressed are communication, change management, talent management, psychological reaction, cultural compatibility.
• Stages of M&A are pre-deal, due diligence, integration, implementation, and evaluation.
• HR has to play an active role in integration phase. They need to understand and execute such integration-planning activities as developing employee communication strategies programmes to retain key talent, and organisational and staffing plans.
• The new leadership team needs to work together on a daily basis, despite cultural and personality differences, power issues, and other barriers. HR can act as a facilitator, and also as a coach to individual executives. Personal and team assessments can be helpful in enabling team members to work together constructively.
• Role of HR in M&A as strategist, change agent, and communicator.

References

Giffin & Schmidt (2002). Why HR Can Make or Break Your M&A? Emphasis. Vol.2.

Moran and Panasian (2005). The human side of mergers and acquisitions: a look at the Evidence. No. 01 Año 3 Enero.

NASSCOM, HR Connect Issue 9, October 2008.

Nowshahri, A. A. Thirunavukkarasu (President HR, Vedanta Group) talks to Aamir Nowshahri about the rising trend of overseas M&As by Indian firms. Issue Date-01/09/2011. The Human Factor.

Pomeroy, Ann (2005). A Fitting Role. HR Magazine, 10473149, Jun2005, Vol. 50, Issue 6.

Taylor A. (2001) The great mergers wave breaks. The Economist, January 27, pp. 59–60.

Schuler and Jackson (2001) HR Issues and Activities In Mergers and Acquisitions. European Management Journal Vol. 19, No. 3, pp. 239–253, 2001.

Zatz, David (2011). An HR Manager’s Guide to Mergers and Acquisitions. Toolpack Consulting.

www.crcnetbase.com/doi/pdf/10.4324/9780203451236.ch4 Viewed on 10th Oct 2012.

www.watsonwyatt.com Viewed on 10th Oct 2012.

http://trak.in

A. Thirunavukkarasu (President HR, Vedanta Group) talks to Aamir Nowshahri about the rising trend of overseas M&As by Indian firms. Issue Date-01/09/2011. The Human Factor.

Managing Human Resources in Cross-Border Alliances, By Susan E. Jackson, Yadong Luo, Randall S. Schuler, (c)2004 Taylor & Francis, UK.

www.watsonwyatt.com

Review Questions

1. Explain the meaning and importance of M&A.
2. Explain the role of HR in M&A.
3. What are the reasons for the failure of M&A between Daimler and Chrysler?
4. What is the role of organisational culture in M&A?
5. Find and analyse one example of success and one of failure of M&A and study their HR problems.

Time to Apply Theory to Practice: Assignment

Prepare a Report with the following details

1. Pick one M&A issue, which was in news at least 4 years back.
2. Collect the news articles and magazine articles about the process.
3. Analyse the process in light of handling HR issues.

Critical and Analytical Thinking: Merger of ICICI and BoR

“Udaipur-based Bank of Rajasthan (BoR) today became part of the country’s largest private sector lender ICICI Bank following the RBI approval to merger proposal of the two lenders. All 463 branches of BoR have started functioning as ICICI Bank’s as per the directive of the Reserve Bank of India.

“With this, ICICI Bank will have a branch network of about 2,500 branches, by far the largest among private sector banks. This will position the bank well to capitalise on the growth opportunities in the Indian economy,” ICICI Bank CEO and Managing Director Chanda Kochhar said. The merger “creates a good strategic fit, combining ICICI Bank’s capital base and product suite with Bank of Rajasthan’s branch network”, she added.”¹ This is how the merger is envisaged.

“Whenever we do a merger and acquisition, we treat the employees of the acquired bank as a part of our parivar (family) we will take care of them (BoR employees) as our own employees—we are not here to retrench people,” ICICI Bank Managing Director and CEO Chanda Kochhar told to the reporters.²

³About the Banks Involved in Merger

ICICI Bank is the second largest bank in India. The bank has a network of 2,528 branches and 6,000 ATMs in India, and available in 19 countries, including India. ICICI Bank offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised subsidiaries in the areas of investment banking, life and nonlife insurance, venture capital, and asset management. The bank has its subsidiaries in the United Kingdom, Russia and Canada, branches in United States, Singapore, Bahrain, Hong Kong, Sri Lanka, Qatar and Dubai International Finance Center, and representative offices in United Arab Emirates, China, South Africa, Bangladesh, Thailand, Malaysia, and Indonesia. Our UK subsidiary has established branches in Belgium and Germany.

The BOR was the private sector bank and was engaged in the business of providing commercial banking, personal banking services, merchant banking services, auxiliary services, consumer banking services, deposit and money placement services, trust and custodial services, international banking services, priority sector banking, and depository services. The bank operated foreign exchange and industrial business through specialized foreign exchange and Industrial finance branches. The bank operated through a network of 463 branches, including six service branches, as well as had 67 onsite and 29 offsite automated teller machines in 230 cities. The total assets of BoR as on 31st March, 2010 was Rs. 173,00,06,05 and the Profit after tax was Rs. 2,343,445.

Merger of BoR with ICICI Bank⁴

The boards of both the banks on May 23, 2010 approved the merger. On 12th of August 2010, Alpana Killawala, CGM, department of communication, RBI has published a press release that “All branches of Bank of Rajasthan Ltd. will function as branches of ICICI Bank Ltd. with effect from August 13, 2010.” RBI was critical of BOR’s promoters not reducing their holdings in the company. The Reserve Bank of India approved the merger of Bank of Rajasthan with ICICI Bank, India’s largest private sector bank. All branches of BoR will function as branches of ICICI Bank. ICICI paid Rs.3,000 crores for it. The boards of ICICI Bank and BoR granted an in-principle approval for the merger. ICICI Bank has proposed a share swap ratio of 25:118 (25 shares of ICICI for 118 shares of BoR).

Each 118 shares of BOR will be converted into 25 shares of ICICI Bank. All customers will be extended seamless services as per existing BoR procedures. All existing BoR products will continue with current features and charges. Customers can continue to transact using their current BoR cheque books, ATM cards, lockers, and so on. The minimum balance requirements and service charges on all type of accounts will remain unchanged. Post the system integration, customers can benefit from ICICI Bank’s enhanced branch network of over 2,500 branches and over 5,600 ATMs spread across 1,400 locations in the country. The bank has a presence in 18 international locations. ICICI Bank’s extensive product suite caters to all banking requirements, both corporate and retail, backed by a world class technology platform.

Employee Perception Toward Merger⁵

Despite the statement by Chanda Kochar, assuring the job security to the BOR employees, there were evidences of fear among the employee. In fact, immediately after the merger was announced, three major employee unions of BoR–All India Bank of Rajasthan Employees Federation, All India Bank of Rajasthan Officers’ Association and Akhil Bhartiya Bank of Rajasthan Karmchari Sangh, have called the strike demanding the immediate termination of the ICICI–BoR merger proposal. The United Forum of Bank of Rajasthan Unions has opposed the merger of BoR with ICICI Bank, citing cultural compatibility issues. According to it, if a merger is essential it should be with a public sector bank.

The President of the All-India Bank of Rajasthan Employees Federation, Mr. Dharmendra Rao, said though BoR was an old-generation private sector bank, it was organised and functioned along the lines of a public sector bank.

“There is no cultural fit whatsoever between the working of our bank and ICICI Bank. We will explore all options, including legal, to stall the merger. If at all there is a need to merge our bank, then it should be with a public sector bank,” he said.

Attrition fears

The Forum, which is the umbrella body of three unions in BoR, fears that once BoR is merged with ICICI Bank, the latter would resort to mass transfers of employees of the former. This could lead to some attrition. BoR has about 4,200 employees (1,700 officers and 2,500 clerical and substaff)

However, according to Mr. G. Padmanabhan, Managing Director and CEO, BoR, it will be a lock, stock, and barrel merger. There will be no retrenchment of employees, he added. There is also a lingering fear that post-merger, BoR employees, whose service conditions and salary structures are governed by the bipartite settlement, arrived at by the Indian Banks’ Association and the United Forum of Bank Unions may not be given the right to exercise second option of pension.

“Will ICICI Bank want to bear the load of Rs. 172 crore towards the second option for pension of Bank of Rajasthan employees?” wondered Mr. Rao.

Mr. Rao said once the merger goes through, ICICI Bank will give the bipartite settlement the go-by and move BoR employees to new (ICICI) scales and service conditions, which may not necessarily be favourable.

He pointed out that when the RBI and the government supported the merger of the erstwhile United Western Bank, an old generation private sector bank predominantly based in Maharashtra, with IDBI Bank, a public sector bank, about 4 years ago, there was no reason why BoR couldn’t be merged with a public sector bank.

Strike threat

Meanwhile, the forum has hinted at the possibility of going on strike if the merger is not stalled. The AIBEA has also opposed the merger citing the controversy surrounding BoR. According to Mr C.H Venkatachalam, General Secretary, AIBEA, the bank should have been put on a moratorium and merged with a public sector bank.

Impact of Merger on Employees⁶

On August 8, 2012, it was reported that, the integration process was almost complete, although the acquired BoR branches were yet to generate the expected business. of the 4,000-odd BoR employees, 920 are no longer with ICICI Bank.

ICICI Bank attributed this to “personal reasons” of employees and some due to “disciplinary issues”, but some of them said the work pressure had led them to quit.

“Not one person has been asked by us to go for performance issues. There were people who wanted to opt out due to the pace at which work is going on,” said K. Ramkumar, executive director, ICICI Bank, who handles HRs among other roles. “There could be a few people who could have gone on account of disciplinary reasons.”

Culturally, the two banks couldn’t have been more different. ICICI is a technology savvy, aggressive, innovative, new private bank while BoR was a private bank in the old-fashioned mould.

“There was pressure for generating new business. We were asked to go out in the market, something which we had not done before,” said a former BoR employee, requesting anonymity. “They (ICICI) would not ask anybody to leave, but there was pressure.”

Another critical factor was the age difference. BoR staff was in their mid-40s on average, while at ICICI Bank many were in their late 20s.

About 300 employees from BoR sought voluntary retirement due to their inability to meet the job requirements and work schedule; but the bank is not in favour of this as it did not make sense for the employees, Ramkumar said.

“I would like to believe that ICICI Bank has been just and fair in the way we have treated people from BoR. We have clearly said there will be no VRS (voluntary retirement scheme). We want all people who came with us to retire and go. I believe those who end up taking VRS suffer more because the value of money they take becomes zero after five or ten years,” Ramkumar said.

The bank has adopted a cautious approach during the BoR integration so as not to repeat the “mistakes” it committed in the past when it dealt with HR management and matching the compensation of the employees of acquired banks.

“We had mistakes in Bank of Madura (in human resource management) by giving ourselves three years to take the people to the terms of conditions of ICICI Bank’s salary. During this merger, this was done from the very first day,” Ramkumar said.

The bank did not make the mistake of “looking for young people and not feeling comfortable with older people, who happened during the Bank of Madura merger.” During the integration process, ICICI has trained about 350 sub-staff to prepare them to handle bigger roles, Ramkumar said.

K.K. Sharma, a former executive director of BoR, agrees the work culture of the erstwhile BoR created issues for the staff after the merger to live up to ICICI Bank’s standards.

“Even the public sector banks, over the past two decades, have transformed and reinvented themselves admirably. One needs to change according to times,” he said.

For BoR promoters Tayals, it was a long wait of two years to encash holding in the bank.

Soon after RBI imposed a  Rs. 25 lakhs penalty on BoR for a range of violations, the capital market regulator initiated a probe into the chain of transactions used by the promoters to hike their shareholding in the bank.

Questions

1. Analyse the stepwise merger process in reference to the case, as explained in the chapter?
2. What are the problem areas and how can they be addressed?
3. Prepare the ideal merger report for the above case, highlighting the role of HR.

Internet Sources for Reference

Suggested Readings

• 11 Of The Best Strategic Brand Partnerships In 2014-Forbes

  https://www.forbes.com

• Successful Strategic Alliances: 5 Examples of Companies Doing It Right

  https://www.allbound.com

• How to Think About All Strategic Alliances-The Right Mindset and …

  https://medium.com

• Xerox: Applying Alliance Management Best Practices to Strategic …

  https://www.inova-software.com

• Who Makes the Best Strategic Alliance Partner?-ThinkAdvisor

  www.thinkadvisor.com

• CEO Best Practice: Strategic Alliances-Growth Resources, Inc.

  www.growthresource.com

• Best practices-Association of Strategic Alliance Professionals

  www.strategic-alliances.org

• Association of Strategic Alliance Professionals

  www.strategic-alliances.org

• Common Success Factors in Strategic Alliances-Alliance Best Practice

  www.alliancebestpractice.co.uk

• Strategic Alliances Strategies and Processes Benchmarking …-NASA

  https://www.nasa.gov

• Strategic Alliances Strategies and Processes Benchmarking …-NASA

  https://www.nasa.gov

• Six Ways to Boost the ROI of Your Strategic Alliance ChiefExecutive …

  https://chiefexecutive.net

• Strategic alliances in Life Sciences Are you ready?-Deloitte

  https://www2.deloitte.com

• Building Trust in Strategic Alliances: enabling greater …-SPiBR.org LLC

  www.spibr.org

• Strategic Alliances Workshop-McAuley Ministries

  mcauleyministries.org

• Form a strategic alliance | University of Oxford

  https://www.ox.ac.uk

• Structuring and Managing Strategic Alliances-UBC Sauder School of …

  www.sauder.ubc.ca

• Mergers, collaborations, and strategic alliances | National Council of …

  https://www.councilofnonprofits.org

Case Studies

• Strategic Alliances Case Studies | Case Study | Business …

  www.icmrindia.org

• Case Studies on Alliances and Combinations-Ben Gomes-Casseres

  alliancestrategy.com

• Toshiba: STRATEGIC ALLIANCES (Case Study-New Technology …

  www.1000ventures.com

• Strategic Alliances, Collaboration & Joint Ventures Case Studies …

  www.ibscdc.org › Case Studies › Strategy

• CASE STUDIES OF STRATEGIC ALLIANCES IN …-AgEcon Search

  ageconsearch.umn.edu

• Strategic alliances and competitive advantage:A case study of …

  erepository.uonbi.ac.ke

• Strategic Alliances in the Sport Industry: A Case Review of Reebok …

  https://academicarchive.snhu.edu

• Leading Strategic Alliances: A Case Study-Clute Institute

  https://www.cluteinstitute.com

• Sharing competences in strategic alliances: a case study of the Cosan …

  www.scielo.br

• Case Studies-Strategic Alliance-EOS-EOS Facades

  www.eos-facades.co.uk

Movies and Videos

• STRATEGIC ALLIANCES-Six Sigma Films

  www.sixsigmafilms.com

• Strategic alliance in the video industry: The …-Wiley Online Library

  onlinelibrary.wiley.com

• nexGTv, Lokdhun enter into strategic alliance; to offer access to 138 …

  www.business-standard.com

• Strategic Alliance Creates Film Powerhouse Targeting U.S. Hispanics …

  www.businesswire.com

• Warner Bros. International Television & Lagardere Medias Form …

  https://www.warnerbros.com

• Strategic Alliances | Joint Venture | Blu Ray-Scribd

  https://www.scribd.com

• nexGTv enters into a strategic alliance with Lokdhun-Exchange4media

  www.exchange4media.com › Digital

• Intel, Dreamworks Animation Form Strategic Alliance to Revolutionize …

  https://www.intel.com

Tools

• Conducting Online Market Research: Tips and Tools | Inc.com

  https://www.inc.com

• 17 Tools & Resources for Conducting Market Research-HubSpot Blog

  https://blog.hubspot.com

• How to Conduct Market Research Online: 5 Steps (with Pictures)

  www.wikihow.com › … › Education and Communications › Research and Review

• Digital tools for researchers | Connected Researchers

  connectedresearchers.com

• The Top 10 Free Online Consumer Research Tools-FlexMR

  https://www.flexmr.net

• 18 Incredibly Useful Market Research Tools for Social Media

  https://blog.bufferapp.com

• Entrepreneurs Love These 13 Tools for Conducting Market Research

  https://www.business.com