M6.4: Critical Review: When Faculties Merge – Communicating Change

Examples abound where change has gone well and an organization and its members have succeeded in achieving their objectives, and have done so in a respectful, timely, and beneficial manner (even when the change can be disadvantages in one aspect or to some stakeholders). Success in this endeavor does advance dependent on the communication medium that is utilized, its frequency, and the level of feedback that is elicited. With that as a background, please write a critical review of 250-300 words and that addresses the following:
• Using articles, locate two reliable and scholarly articles related to organizations that have undergone significant change (for instance, mergers, acquisitions, downsizing, etc.). One of the articles should showcase how an organization managed this process well, and another article should showcase how an organization did not manage this process well.
• Provide a brief overview of each article.
• Based on the change strategies utilized by each of the organization – in addition to information gained in this course – present a preferred strategy/process an organization should follow when considering momentous change in their organization.
• Finally, using the knowledge gained in this week’s materials, discuss how this change strategy/process should be communicated to best achieve it’s hoped its objectives.
Managing Organizational Change: A Multiple Perspectives Approach (3rd ed.) by Palmer, Dunford, and Buchana

M6.4 Critical Review: When Faculties Merge – Communicating Change

One of the most popular and largest mergers of all time is the merger between America Online and Time Warner in 2001. At the time, the merger was valued at $350 billion, making it the largest merger in the business history of the United States (Arango, 2010). The merger was looked at as “a historic moment in which new media has truly come of age” and as a move that would “create unprecedented and instantaneous access to every form of media and to unleash immense possibilities for economic growth, human understanding and creative expression” by the top executives from both companies (Arango, 2010). However, the merger proved troublesome and difficult to manage, going by the trail of despair that was observed in the subsequent years: investigations by the Securities and Exchange Commission, investigations by the Justice Department, Executive upheavals, countless job losses, decimation of retirement accounts, and loss of company value (Arango, 2010).

The acquisition of Bank of Madura (BoM) by ICICI, in 2001, is one of the most popular acquisitions in Indian business history (Kansal & Chandani, 2014). BoM was in pursuit of increasing shareholder value, providing technology-based services to customers, and increasing growth opportunities available to its employees (Kansal & Chandani, 2014). The acquisition by ICICI, an organization that was three times larger, was a move that was well calculated and undertaken to meet the goals of BoM. BoM focused on the profitability of the bank as a whole, while ICICI focused on the individual units as profit centers. The differences that existed in the grades, profiles, salaries, and designations of personnel, as well as the differences in the strategies used by the organizations,  resulted in the employees of BoM fearing close scrutiny (Kansal & Chandani, 2014). The executives of the company, however, were able to effectively manage the restructure, which facilitated the success of the acquisition.

The 2001 AOL-Time Warner merger was a failure, with the companies eventually splitting in 2009 (Arango, 2010). The leaders of the companies were unable to effectively communicate with, motivate, and energize employees during and after the merger. There were structural incongruities, which made it difficult to develop a single cohesive unit. The management was unable to bridge the existing corporate culture differences and create a vision for the new company. There was improper communication from senior management, resulting in confusion and chaos. The acquisition of BoM by ICICI was successful since the management was able to establish clear communication channels. Training programs were organized for employees, emphasizing on attitude, knowledge skills, and technology to improve skills (Goyal & Joshi, 2012). In addition, employee involvement was key, with dialogue and training used for purposes of informing and involving employees in the entire process of transition.

In conclusion, organizational change is only successful through the use of management strategies that adequately inform and involve all the members of an organization. Through proper communication, training, and dialogue, employees are kept informed and their attitudes and feelings managed, ensuring a smooth transition and implementation of change within an organization. It is also important that the management of an organization prepares for cultural shock and cultural changes by providing training to employees and communicating the new vision and goals during change.

References

Arango, T. (2010). How the AOL-Time Warner merger went so wrong. New York Times, 10.

Goyal, K. A., & Joshi, V. (2012). Merger and acquisition in banking industry: A case study of ICICI Bank Ltd. International Journal of Research in Management, 2(2), 30-40.

Kansal, S., & Chandani, A. (2014). Effective management of change during merger and acquisition. Procedia Economics and Finance, 11, 208-217.