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Description
Business consolidations and reorganizations are occurring in the 1990s with the same force and impact that acquisitions created in the business community of the 1980s. While a variety of similarities exist between a reorganization and an acquisition, subtle yet significant differences separate these two business activities. Identifying and dealing with these differences may represent a key challenge to the business manager of the 1990s. This paper will address the managerial challenges which a business consolidation, reorganization or merger create. While business reorganizations are usually initiated because of financial considerations, successfully implementing a reorganization will require that the management team focus its energies on personnel and human resource related matters rather than on accounting and financial issues. Items which we learned through dealing with acquisitions, such as attempting to maximize the technological, cultural and business synergies within the combining organizations continue to be important. However, additional issues also need to be addressed. The consolidation of two business operations into one new organization will eliminate many duplicate management and supervisory positions within the new organization. While selecting the proper candidate for these positions is important, managing the employees' perceptions of how this selection is being made and limiting the cross cultural conflicts within the new organization often become more important factors in successfully implementing a business reorganization. Identifying and dealing with the internal political and cultural struggles which will develop between consolidating organizations, and their employees, represents one of the key factors which managers must deal with if they are to implement a successful business consolidation. Avoiding the us versus them, the winner versus loser and the our way is better than yours attitudes is critical to establishing a cohesive new organization. Managers who are able to identify and deal with these issues should find the process of consolidating and reorganizing their business operations challenging and exciting. Those managers who cannot successfully address these issues will find the process extremely difficult.
