HR. Cases

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Part 1: • Read the (Taking Responsibility) case study on pages 293 – 294 and answer

the two questions. • Read the (Managing Talent) case study on pages 294 – 295 and answer the

two questions. • Read the (HR in Small Business) case study on pages 295 – 296 and answer

the three questions. ! Part 2: • Read the (HR Oops! ) case study on page 301 and answer the two questions. • Read the (Taking Responsibility) case study on pages 327 – 328 and answer

the two questions. • Read the (Managing Talent ) case study on pages 328 – 329 and answer the

two questions. ! NOTE: 1. Each part should be separately done. 2. Each part should be a page TO a page and a half single space. 3. The answerers should be CLEAR AND SIMPLE TO UNDERSTAND. ! DUE: April 11. 2017

Project Scope Statement

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Project Scope Statement

1.Prior to accepting the work, I need for you to make sure that you can do the work and have it ready by Friday evening.

2.This work is for a project management course. If anyone that has project management experience, this would probably be a good fit.

Prepare a scope statement using the attached template.  The information must be tangible, measurable, and specific.  A scope should be a minimum of 8-110 pages long. 

Please make sure it is very detailed in nature.  You must be very detailed, and it must possess estimates throughout.

. Deliverables:

  • Project Scope Statement (in MS Word)
  • There is 8 sections from Statement of Work to Technical Requirements.

note: Example of the final work in MS WORD…see link

When an agreement has been made, I will provide you with previous information for this project to help you with the work.

 

http://www.projectmanagementdocs.com/project-documents/project-scope-statement.html

Project Charter

V 2.0

Project Charter

 

 

 

 

 

 

Project Name   Project Number  
Project Team   Prioritization  
Owner(s)  

 

 

 Start Date:  
Scheduled Completion Date:  

 

 

 

NOTE: Remove this note and all instructions in the template for a business professional document.

 

Mission/ Purpose

 What is your project going to accomplish? How does this project relate to overall strategic goals and objectives of the company? Is it part of a program or larger project?
 

 
Project

Description and Project Product

 What will this project create? What are the outcome products being created with this project? At a high level, how do you plan on completing the work required for this project? List at least five high-level deliverables (outputs) that will be generated from the execution of this project. This section will help to prepare for your project scope and WBS later in the course.
 

 

 

Objectives

 What objective is this project designed to meet? List a high-level objective statement for the overall project and at least three to five goals required to meet this objective. These must be measurable. For example, if an objective of the project is the cut cost, then by how much will costs be cut?

 
 

 
Business Need

Why should we do this project? What will be gained, changed, or modified? Is there a financial or business reason to do this project? Explain, in detail, how this project will be beneficial to the project owner.
 

 
Milestones What are the key milestone dates associated with the project? Milestones may show the completion of a set of major deliverables or phases. List at least 10 milestones and provide estimated end dates for each. Milestones must have associated dates.

 
Budget What is the estimated budget for this project? Do not research your project cost; this is an estimate. This does not need to be close to your project’s actual costs when your project planning is complete in Week 6. This is an order of magnitude estimate.

 

 
  Estimated Labor  
  Estimated Materials  
  Estimated Contractors  
  Estimated Equipment and Facilities  
  Estimated Travel  
  Total Estimated Cost  
 
User Acceptance Criteria What are the minimum success criteria as defined by the key stakeholders? How will you monitor and measure the project quality? How will the project owners determine if the project is a success or not? These must be detailed and measureable.

 
 

High-Level Project Assumptions What are the assumptions on which the project is based? What 7–10 statements do you believe to be true or will become true about the project during project execution but cannot be sure at this time?

 

 
High-Level Project Constraints

What are the major limiting factors that affect the project? What 8–10 rules, regulations, requirements, laws, processes, or procedures are you bound by on this project?
Exclusions and Boundaries What are the boundaries of the project? To ensure that your project scope is properly constrained, identify 8–10 things that will be excluded from the project plans. What items will be not be included in the project?

 

 

 

 

 
Major Risks What are the major risks affecting the project? List a minimum of 7 to 10 risks. These risks must occur during the project, not after the project finishes or before the project starts. The risks defined should be directly associated with the project implementation.
 

 

 

KEY STAKEHOLDERS

 

 

 
Project Manager Authority Level  

 

 

 

 

 

 
Project Core Team  

 

 

 

 

 

 
Subject Matter Experts (SMEs) (What resources will you need with special expertise?)  

 

 

 

 
 

APPROVALS
Type Name
Signature
Date
Project Manager Approval

 

 

  

 

 

  

 

 
Customer/Sponsor Approval

 

 

  

 

 

  

 

 

 

 

 

image1.png

Internal Analysis Ch 06 MCQs

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Chapter 06

Internal Analysis

 

Multiple Choice Questions
1. (p. 138) The tendency to accept the status quo and disregard signals that change is needed is called:
A. Management myopia
B. Environmental awareness
C. Management long-sightedness
D. Subjective management

 

Difficulty: Medium
Learning Objective: 1

2. (p. 140) SWOT analysis’s value and continued use is found in its:
A. Complexity
B. Difficulty
C. Simplicity
D. Short-sighted nature

 

Difficulty: Medium
Learning Objective: 1

3. (p. 140) What have strategists sought in frameworks besides SWOT for conducting internal analysis?
A. They have sought to get less detail from other frameworks
B. They have sought that the frameworks be more comprehensive
C. They have sought a less generic framework
D. They have sought to better account for internal factors in light of external factors

 

Difficulty: Difficult
Learning Objective: 1

 

4. (p. 140) _______ views a firm as a sequential process of value-creating activities.
A. Resource-based analysis
B. Value chain analysis
C. SWOT analysis
D. Primary internal analysis

 

Difficulty: Easy
Learning Objective: 2

5. (p. 140) Common to all the approaches to internal analysis is:
A. The use of meaningful standards for comparison in internal analysis
B. The use of external factors of analysis
C. The process point of view
D. Management market myopia

 

Difficulty: Difficult
Learning Objective: 2

6. (p. 140) ________ is a historically popular technique through which managers create a quick overview of a company’s strategic situation—it is based on achieving a sound fit between internal resources and the external situation.
A. Internal analysis
B. External analysis
C. Value chain analysis
D. SWOT analysis

 

Difficulty: Medium
Learning Objective: 1

7. (p. 140) A(n) ________ is a major favorable situation in a firm’s environment.
A. Value chain
B. Strength
C. Opportunity
D. Capability

 

Difficulty: Easy
Learning Objective: 1

 

8. (p. 140) A(n) ______ is a major unfavorable situation in a firm’s environment.
A. Weakness
B. Core strength
C. Competitive disadvantage
D. Threat

 

Difficulty: Easy
Learning Objective: 1

9. (p. 140) Which of the following is NOT an example of an opportunity for the firm?
A. Identification of a previously overlooked market segment
B. Improved buyer or supplier relationships
C. Positive changes in regulatory circumstances
D. Strong reputation and image with a key demographic

 

Difficulty: Medium
Learning Objective: 1

10. (p. 141) A(n) ______ is a resource or capability controlled by or available to a firm that gives it an advantage relative to its competitors in meeting the needs of the customers it serves.
A. Competence
B. Strength
C. Opportunity
D. Competitive advantage

 

Difficulty: Easy
Learning Objective: 1

 

11. (p. 141) A(n) _______ is a limitation or deficiency in one or more of a firm’s resources or capabilities relative to its competitors that creates a disadvantage in effectively meeting customer needs.
A. Weakness
B. Threat
C. Competitive limit
D. Marginal resource

 

Difficulty: Easy
Learning Objective: 1

12. (p. 141) Consider e-Pixels, a company that produces miniature digital video cameras that feature easy downloads and uplinks to computers. Which of the following represents a potential strength for the firm?
A. Brand name
B. Digitalization of most types of media
C. Growing global computer companies with similar technology
D. Limited experience with video technology

 

Difficulty: Medium
Learning Objective: 1

13. (p. 142) According to a SWOT analysis diagram, what strategy does Cell 1 support?
A. Aggressive
B. Turnaround
C. Defensive
D. Diversification

 

Difficulty: Difficult
Learning Objective: 1

 

14. (p. 142) The cells on the left side of the SWOT diagram are both characterized by:
A. Substantial internal strengths
B. Numerous environmental opportunities
C. Critical internal weaknesses
D. Major environmental threats

 

Difficulty: Difficult
Learning Objective: 1

15. (p. 142) Which cell in the SWOT analysis diagram is the most favorable situation?
A. Cell 1
B. Cell 2
C. Cell 3
D. Cell 4

 

Difficulty: Medium
Learning Objective: 1

16. (p. 142) ________ represents the least favorable situation, with the firm facing major environmental threats from a weak resource position.
A. Cell 1
B. Cell 2
C. Cell 3
D. Cell 4

 

Difficulty: Medium
Learning Objective: 1

17. (p. 142) Which cell supports a turnaround-oriented strategy?
A. Cell 2
B. Cell 3
C. Cell 4
D. Cell 1

 

Difficulty: Difficult
Learning Objective: 1

 

18. (p. 142) Which of the following describes the situation for a firm in Cell 2?
A. The firm faces several environmental opportunities and has numerous strengths that encourage pursuit of those opportunities
B. The firm faces major environmental threats from a weak resource position
C. The firm has identified several key strengths, but faces an unfavorable environment
D. The firm faces impressive market opportunity, but is constrained by weak internal resources

 

Difficulty: Difficult
Learning Objective: 1

19. (p. 144) What makes SWOT analysis susceptible to key limitations?
A. Its narrow focus on external factors
B. Its broad conceptual approach
C. Its vastly limited applicability
D. Its portrayal of the essence of sound strategy formulation

 

Difficulty: Easy
Learning Objective: 1

20. (p. 144) Which of the following statements is false?
A. A SWOT analysis can overemphasize external threats and downplay internal strengths
B. A SWOT analysis can be static and can risk ignoring changing circumstances
C. A strength, as identified by SWOT analysis is not necessarily a source of competitive advantage
D. A SWOT analysis can overemphasize a single strength or element of strategy

 

Difficulty: Medium
Learning Objective: 1

 

21. (p. 145) Which of the following statements is true?

A. Astrength is not always a source of competitive advantage
B. Strengths are synonymous with competitive advantage
C. Every company resource or capability is a strength and leads to competitive advantage
D. Strengths are always inimitable

 

Difficulty: Easy
Learning Objective: 1

22. (p. 145) A perspective in which business is seen as a chain of activities that transforms inputs into outputs that customers value is called:
A. Value chain
B. Value chain analysis
C. Resource-base
D. Process division

 

Difficulty: Medium
Learning Objective: 2

23. (p. 145) Which of the following is NOT an example of a basic source from which customer value is derived?
A. Activities that differentiate the product
B. Activities that lower its cost
C. Activities that add to product complexity
D. Activities that meet the customer’s need more quickly

 

Difficulty: Easy
Learning Objective: 2

24. (p. 145) Value chain analysis takes a:
A. Process point of view
B. Functional point of view
C. Horizontal point of view
D. Corporate point of view

 

Difficulty: Medium
Learning Objective: 2

 

25. (p. 145) Which method of internal analysis disaggregates the business into sets of activities that occur within the business, starting with inputs and finishing with the firm’s products and after-service sales?
A. Resource-based view
B. Value chain analysis
C. SWOT analysis
D. Porter’s generic strategies

 

Difficulty: Easy
Learning Objective: 2

26. (p. 146) Which of the following is an example of a primary activity in the typical firm?
A. Human resources management
B. Research, technology and systems development
C. General administration
D. Logistics

 

Difficulty: Medium
Learning Objective: 2

27. (p. 146) Which of the following is an example of support activities in the typical firm?
A. Operations
B. Procurement
C. Marketing and sales
D. Service

 

Difficulty: Medium
Learning Objective: 2

 

28. (p. 146) Those activities in a firm that are involved in the physical creation of the product, marketing and transfer to the buyer and after-sales support are called:
A. Operational activities
B. Support activities
C. Secondary activities
D. Primary activities

 

Difficulty: Easy
Learning Objective: 2

29. (p. 148) The initial step in value chain analysis is to:
A. Allocate costs to different activities within the value chain
B. Identify the firm’s strengths and weaknesses
C. Divide a company’s operations into specific activities or processes
D. Identify the firm’s key resources and capabilities

 

Difficulty: Easy
Learning Objective: 2

30. (p. 148) In VCA, which method of cost accounting is preferred?
A. Activity-based cost accounting
B. Value-based cost accounting
C. Traditional cost accounting
D. Financial cost accounting

 

Difficulty: Medium
Learning Objective: 2

 

31. (p. 149) Which of the following is usually true about a firm’s value chain?
A. Scrutinizing a firm’s value chain may bring attention to several sources of differentiation advantage relative to competitors
B. Scrutinizing a firm’s value chain does not usually reveal cost advantages or disadvantages
C. Scrutinizing the firm’s value chain can minimize the activities that are critical to buyer satisfaction
D. Analysis of the firm’s value chain can lead a firm to limit its market success

 

Difficulty: Medium
Learning Objective: 2

32. (p. 151) Which of the following considerations is critical at the examination stage of the value chain analysis?
A. All primary activities differentiate the firm
B. The managers’ choice of activities to be examined influences the mission statement of the firm
C. The nature of value chains and the relative importance of the activities within them are standard across industries
D. The relative importance of value activities can vary by a company’s position in a broader value system that includes the value chains of its upstream suppliers and downstream customers or partners

 

Difficulty: Medium
Learning Objective: 2

33. (p. 151) It is especially important that managers take into account their level of ________ when comparing their cost structure for activities on their value chain with those of key competitors.
A. Competition
B. Horizontal integration
C. Vertical integration
D. Concentric diversification

 

Difficulty: Difficult
Learning Objective: 2

 

34. (p. 153) The _______ is a new perspective on understanding a firm’s success based on how well the firm uses its internal resources.
A. Resource-based view
B. Value chain view
C. Corporate view
D. Functional view

 

Difficulty: Easy
Learning Objective: 3

35. (p. 153) What is the underlying premise of the resource-based view?
A. Firms generally have very similar capabilities stemming from almost identical resources
B. Imitation of resources is the best way to achieve competitive advantages
C. Firms differ in fundamental ways because each firm possesses a unique bundle of resources
D. Firms’ intangible resources can be very difficult to imitate

 

Difficulty: Difficult
Learning Objective: 3

36. (p. 154) Which of the following is NOT a basic resource for any firm?
A. Tangible assets
B. Core outputs
C. Intangible assets
D. Organizational capabilities

 

Difficulty: Medium
Learning Objective: 3

37. (p. 154) The most easily identified assets, often found on a firm’s balance sheet, are called:
A. Intangible assets
B. Tangible assets
C. Capabilities
D. Competencies

 

Difficulty: Easy
Learning Objective: 3

 

38. (p. 154) Which of the following is NOT an example of an intangible asset?
A. Financial resources
B. Brand names
C. Company reputation
D. Organizational morale

 

Difficulty: Medium
Learning Objective: 3

39. (p. 156) Which of the following is NOT one of the RBV guidelines?
A. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives
B. Resources are more valuable when they are non-durable
C. Resources are most valuable when they are scarce
D. Resources are most valuable when they drive a key portion of overall profits

 

Difficulty: Medium
Learning Objective: 3

40. (p. 156) Consider Company A, a financial services company specializing in small business issues, whose location is in a shopping mall in the suburbs and Company B, a similar business, whose location is downtown between a successful law firm and a courthouse. Company A’s comparative success can be best attributed to which RBV guideline?
A. Resource are more valuable when they are scarce
B. Resources are more valuable when they are durable
C. Resources are more valuable when they are scarce
D. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives

 

Difficulty: Difficult
Learning Objective: 3

 

41. (p. 156) The availability of substitutes affects which of the RBV guidelines?
A. Resources are more valuable when they are scarce
B. Resources are more valuable when they are durable
C. Resource are more valuable when they are scarce
D. Resources are more valuable when they are critical to being able to meet a customer’s need better than other alternatives

 

Difficulty: Difficult
Learning Objective: 3

42. (p. 157) _______ help the firm create resource scarcity by making resources hard to imitate.
A. Resource bundles
B. Capabilities
C. Isolating mechanisms
D. Tangible resources

 

Difficulty: Medium
Learning Objective: 3

43. (p. 157) Which of the following is NOT an example of an isolating mechanism?
A. Physically unique resources
B. Capital ambiguity
C. Path-dependent resources
D. Economic deterrence

 

Difficulty: Medium
Learning Objective: 3

44. (p. 157) ________ are very difficult to imitate because of the difficult, sometimes complicated path another firm must follow to create the resource.
A. Path-dependent resources
B. Physically unique resources
C. Economic resources
D. Ambiguous resources

 

Difficulty: Easy
Learning Objective: 3

 

45. (p. 158) Which of the following involves large capital investments in capacity to provide products or services in a given market that are scale sensitive?
A. Path-dependence
B. Casual ambiguity
C. Physical uniqueness
D. Economic deterrence

 

Difficulty: Easy
Learning Objective: 3

46. (p. 157) Brand loyalty, employee satisfaction and a reputation for fairness are items that:
A. Are easy to imitate
B. Can be imitated, but may not be
C. Cannot be imitated
D. Are difficult to imitate

 

Difficulty: Medium
Learning Objective: 3

47. (p. 159) Which of the following statements is true?
A. The faster a resource depreciates, the more valuable it is
B. The slower a resource depreciates, the more valuable it is
C. The larger a resource or asset, the more slowly it depreciates
D. Intangible assets can have their depletion measures easily

 

Difficulty: Medium
Learning Objective: 3

48. (p. 159) In the increasingly hypercompetitive global economy today, distinctive competencies and competitive advantages:
A. Are commonplace
B. Are a prerequisite to being in business for the short-term
C. Are particularly durable
D. Can fade quickly

 

Difficulty: Difficult
Learning Objective: 3

 

49. (p. 159) Which of the following illustrates what it means to utilize a functional perspective?
A. Looking at different functional areas of the firm, disaggregating tangible and intangible assets as well as organizational capabilities that are present, can begin to uncover important value-building resources that deserve further analysis
B. Dividing categories by function into more specific competencies can allow a more measurable assessment
C. Taking a creative look at what competencies the firm possesses (or has the potential to possess) can help identify sources of competitive advantage
D. The value chain approach can uncover organizational capabilities, activities and processes that are potential sources of competitive advantage

 

Difficulty: Difficult
Learning Objective: 4

50. (p. 159) Which of the following combinations provides the best sources of competitive advantage?
A. Resources/capabilities that are scarce, durable and sustainable
B. Resources/capabilities that are central to meeting a customer need better than other alternatives and are inimitable
C. Resources/capabilities that are durable, scarce and appropriable to the firm
D. Resources/capabilities that are directly appropriable to the firm, inimitable, durable and meet customer needs better than other alternatives

 

Difficulty: Medium
Learning Objective: 3

51. (p. 162) When a strategist uses the firm’s historical experience as a basis for evaluating internal factors, he or she is performing a:
A. Comparison with key competitors
B. Comparison with success factors in the industry
C. Comparison with past performance
D. Comparison with industry benchmarks

 

Difficulty: Easy
Learning Objective: 4

 

52. (p. 162) A manager’s assessment of whether a certain internal factor–like financial capacity–is a strength or weakness will be most strongly influenced by:
A. The relative strength of other factors
B. The factor’s flexibility within the organization
C. The manager’s experience in connection with that factor
D. The manger’s perception of that factor in other firms

 

Difficulty: Medium
Learning Objective: 4

53. (p. 162) Using historical experience as a basis for identifying strengths and weaknesses can be likened to:
A. Market myopia
B. Tunnel vision
C. Management myopia
D. Benchmarking

 

Difficulty: Medium
Learning Objective: 4

54. (p. 162) The differences in internal resources among companies in the same industry:
A. Can become relative strengths or weaknesses depending on the strategy a firm chooses
B. Almost always result in competitive advantages based on relative strengths or weaknesses
C. Arise from benchmarking
D. Are easily observed and relative strengths are easily imitated

 

Difficulty: Medium
Learning Objective: 4

 

55. (p. 162) _______ is a method of comparing the way a company performs a specific activity with a competitor, potential competitor or company doing the same thing.
A. Benchmarking
B. Imitating
C. Value chain analysis
D. Vertical integration

 

Difficulty: Easy
Learning Objective: 4

56. (p. 162) Company X’s principal strength is its inbound and outbound logistics system; its relative weakness, however is after-sales service. Its competitor, Company Y, however is often plagued with lagging shipments and an inflexible distribution setup. Company Y remains successful because it maintains a fully staffed service department and as a result the company is known for its dependable service. _______ allows them to identify ways to build on relative strengths and avoid dependence on capabilities at which the other firm excels.
A. Industry comparison
B. Benchmarking
C. Past performance comparison
D. Disaggregating

 

Difficulty: Medium
Learning Objective: 4

57. (p. 163) _______ involve(s) identifying the factors associate with successful participation in a given industry.
A. The resource-based view
B. Value chain analysis
C. Industry analysis
D. Porter’s generic strategies

 

Difficulty: Easy
Learning Objective: 4

 

58. (p. 163) Which of the following is a useful framework against which to examine a firm’s potential strengths and weaknesses in a given industry?
A. Isolating mechanisms
B. The value chain
C. Organizational capabilities
D. Porter’s five forces

 

Difficulty: Medium
Learning Objective: 4

59. (p. 163) A company producing toilet paper, tissues and other consumer paper goods can work to establish the right product lines, with reasonable sales volumes, profit margins and growth potential in order to generate:
A. Supplier power to face massive buyer power in retail customers
B. Buyer power for the end-consumers
C. Supplier power for the retail chains
D. Regional advantages over buyers

 

Difficulty: Hard
Learning Objective: 4

60. (p. 165) ________ is one way to identify success factors against which executives can evaluate their firm’s competencies relative to its key product or products.
A. Corporate strategy
B. Product life cycle
C. Diversification
D. Agglomeration

 

Difficulty: Easy
Learning Objective: 4

 

 

What are the four phases of M&A, and what happens at each phase?

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CHAPTER 4 IHRM IN C R O S S – B O R D E R MERGERS & A C Q U I S m O N S , INTERNATIONAL ALLIANOES A N D S M E s

8 3

 

 

 

  • Mergers and acquisitions (M&As); and

 

    • International joint ventures (IJVs).

 

At the end of the chapter we will address the special case of globalizing small and medium-sized enterprises (SMEs) while looking for attendant IHRM responses. SMEs represent important elements in the world economy. However, in IHRM research they are often neglected, There is evidence that their approaches to international human resource management differ to a large extent from those of large MNEs and this is why we cover this topic in the present chapter. Chapters 2, 3 and 4 complement each Other and are designed to deliver insights in the most important organizational contexts for international human resource management.

 

 

 

 

 

CROSS-BORDER ALLIANOES

 

The strategic importance of alliances has increased in the course of globalization . – Cross-border alliances are cooperative agreements between t w o or more firms f r o m different national back-grounds, w h i c h are intended to benefit all partners. As depicted in Figure 4 . 1 these comprise equity as well a non-equity arrangements.^

 

 

• A non-equity cross-border alliance ‘is an investment vehicle in which profits and other responsibilities are assigned to each party according to a contract. Each party cooperates as a separate legal entity and bears its own liabilities’.” Examples include international technology alliances or strategic research and development alliances^ as well as cooperative agreements in different functional areas such as marketing or production.^

 

• Equity modes involve a ‘foreign direct investor’s purchase of shares of an enterprise in a country other than its own’.” These include the establishment of subsidiaries as mentioned in Chapter 3,

 

FIGURE 4.1 Equity and non-equity modes of foreign operation

 

S u b c o n t r a c t i n g

 

O u t s o u r c i n g .

. • O f f s h o r i n g

 

Subsidiaries Franchising

 

 

 

 

 

Joint ventures

 

 

 

 

M e r g e r s a n d acquisitions

 

 

 

 

E q u i t y a n d n o n – e q u i t y b a s e d m o d e s o f

 

f o r e i g n o p e r a t i o n

 

 

 

 

 

Licensing

 

 

 

 

M a n a g e m e n t contracts

 

 

 

I Equity m o d e s • N o n – e q u i t y modes I M i x e d

 

S o u r c e ; Further d e v e l o p e d f r o m M. K u t s c h k e r a n d S. S c h m i d , Internationales Management, 6 t h E d . (Munich a n d Vienna: O l d e n b o u r g , 2 0 0 8 ) , p. 8 4 7 . R e p r o d u c e d with permission .

84

CHAPTER 4 IHRM !N GROSS – BORDER MERGERS & ACQUISITIONS, INTERNATIONAL ALLIANCES A N D S M E s

 

 

either through Greenfield investments or acquisitions, as well as through joint ventures or

 

 

mergers. The latter typically involve long-term collaborative strategies, which require the support of

 

 

appropriate HR practices.’^ They represent typical cross-border equity-based alliances.

^

 

Equity as w e l l as non-equity cross-border alliances pose specific challenges to international h u m a n resource management. Often, these are crucial to the success of the international opera-t i o n . As Schuler and Tarique note, ‘Some of the H R issues that are critical to the success of eq-uitt’-based international or cross-border alliances may also rise in non – equity cross-border alliances, but they are often less central to the success of the alliance’.^ Hence, the difference i n H R J M in equity and non – equity cross-border alliances is supposed to lie in the differing extent to w h i c h specific H R measures are used.^” However, it has to be stated that there is a research defi-cit w i t h respect to H R M i n non-equity cross-border alliances’-‘ and it is beyond the scope of this chapter to discuss implications of all foreign entry modes in d e t a i l . ‘ ”

 

 

 

 

CROSS-BORDER MERGERS AND ACQUISITIONS

 

A merger is the result of an agreement betu’een t w o companies to join their operations together. Partners are often equals. For example, the DaimlerChrysier merger was supposed to be a merger between equals i n its first stage.’^ M o r e i n f o r m a t i o n about this merger and its eventual lack of success can be found in I H R M in A c t i o n Case 4 . 1 .

 

A n acquisition, on the other hand, occurs when one company buys another company w i t h the interest of controlling the activities of the combined operations . ”’ This was the case when the Dutch steel company M i t t a l , ranked second by volume in crude steel production in 2006, initiated a hostile takeover of the Luxembourg-based Arcelor group, ranked first in the same statistic.’^

 

Figure 4.2 shows that a merger usually results in the f o r m a t i o n of a new company while an acquisition involves the acquiring f i r m keeping its legal identity and integrating a new company into its o w n activities. The H R challenge i n both cases consists of creating new H R practices and strategies that meet the requirements of the M & A .

 

 

FIGURE 4.2 The formation processes of M&As and

HR Challenges

 

M e r g e r

 

A c q u i s i t i o n

C o m p a n y A

C o m p a n y B

C o m p a n y A

C o m p a n y B

C o m p a n y A a n d C o m p a n y B

C o m p a n y A buys C o m p a n y B

f o r m t o g e t h e r t h e n e w

 

 

C o m p a n y C

C o m p a n y A

 

 

 

 

 

 

 

 

 

W i t h i n the context of this international volume, our focus w i l l be o n cross-border mergers and acquisitions ( M & A s ) . This means that firms w i t h headquarters located in t w o different countries are concerned. M a n y of the H R M challenges faced i n mergers and in acquisitions are similar, and

 

 

 

 

 

 

 

 

 

 

 

 

The m

 

screer

 

Daimie

 

Ghrysh

 

HR in

 

At me I the me aspect, involv

 

In tl the me Integra manag levels, raised” pany’s Intrane compc the sat

 

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Source:

 

(pp. 35-Copyrig permiss

8 6 CHAPTER 4 IHRM IN C R O S S – B O R D E R MERGERS & A C Q U I S m O N S , INTERNATIONAL ALLIANCES A N D SMES

 

for this reason we w i l l not further differentiate between these t w o entities, but summarize them and use the abbreviation M & A . U N C T A D defines cross-border M & A s as f o l l o w s : ‘ ^

 

Cross-border M&As involve partial or full takeover or the merging of capital, assets and liabilities of existing enterprises in a country by TNCs [transnational corporations] from other countries. M8As generally involve the purchase of existing assets and companies.

 

Cross-border M & A s have seen tremendous g r o w t h over the last t w o decades in part because of the phenomenon of globalization . ‘Both the value and number of cross-border M & A s rose in 2005, to $716 billion (an 88 per cent increase) and to 6134 (a 20 per cent increase) respec-tively’ . ‘^ This is depicted in Figure 4.3.

 

One major reason to engage in mergers or acquisitions is often to facilitate rapid entry into new markets . ‘” Thus, ‘mergers and acquisitions are a predominant feature of the international business system as companies attempt to strengthen their market positions and exploit new market opportunities’ . ^” Some of the factors that a f i r m takes into consideration when deciding on a target country include: the g r o w t h aspiration of the acquiring company, risk diversifica-t i o n , technological advantages, a response to government policies in a particular country, exchange rate advantages, favorable political and economic conditions, or an effort to f o l l o w clients.^’

 

 

Despite the high yearly g r o w t h rates in the area of M & A s there seems to be a gap between the expected added value and the benefits realized f r o m an M I & A . – ^ ITowever, there is g r o w i n g appreciation that the w a y the M . & A is managed d u r i n g the different phases (especially in the post-merger integration phase) has an impact on its performance, and in t u r n on the added value created.-‘^ M & A management has been investigated f r o m many different perspectives. The w o r k of Larsson and FinkelsteiiG” provides an excellent overview of M & A s f r o m different research fields including strategic management, economics, finance, organizational theory and human resource management.^^ O f course, all sources of research are i m p o r t a n t when explain-ing the phenomenon of M & A success.

 

For the purposes of this chapter, we are going to focus solely on H R and its role in employee relations. The quality of employee relations, ranging f r o m employee support to employee resist-ance, is influenced by variables such as the similarity between the management styles of the t w o organizations,^^ the tp’pe of cross-border combinations, the combination potential in terms of ef-ficiency gains, or the extent of organizational integration . There is evidence that employee resist-ance endangers A 4 & A performance as it may hinder synergy realization. For this reason, it is

 

 

 

FIGURE 4,3 Mergers and acquisitions in USS Billions

 

1800 –

 

1600 –

 

 

 

 

 

 

 

 

 

 

-1

1

I

I

I

I

 

1994

1996

 

1998

 

2 0 0 0

 

S o u r c e : U N C T A D (ed), World Investment Report

2008

(New Y o r k a n d Geneva, United Nations, 2 0 0 8 ) , p. 5. R e p r o d u c G d

with permission .

 

 

 

 

.

, .

 

 

un ter cai

 

is i inc inn a m

CHAPTER 4 IHRM IN C R O S S – B O R D E R MERGERS & AGOUISITIONS, INTERNATIONAL ALLiANGES A N D S M E s

8 7

 

i m p o r t a nt that all M & A s try and effectively manage issues where employee resistance is encoun-tered, in order that employee support can evolve. This is a process in which the H R M function can play a crucial role.

 

A study by Birkinshaw et al}^ f o u n d that the integration of tasks'” between t w o companies is interdependent w i t h h u m a n integration . The dimensions of human integration in this study included visibility and continuity of leadership, communication processes d u r i n g integration, integrating mechanisms used, acquired personnel retained, and voluntary personnel loss. Task and human integration interact in different phases to foster value creation in acquisitions:

 

 

In phase one, task integration led to a satisfying soiution that iimited the interaction between acquired and acquiring units, while human Integration proceeded smoothly and led to cultural convergence and mutual respect. In phase two, there was renewed task integration built on the success of the human integration that has been achieved, which led to much greater interdependencies between acquired and acquiring units.^°

 

 

Birkinshaw et al. conclude that the human integration process is especially difficult to manage and takes time. Comple.xity and the length of the integration process increase even more in the case of cross-border alliances.^’ One reason for this is that both of the firms undergoing acquisition processes are embedded in their o w n national, institutional, and cultural settings (see Chapter 2). Typical problems that arise in cross-border M & A s involve the f o l l o w i n g :

 

  • Within the first year of a merger, it is not uncommon for a company’s top management level to lose up to 2 0 per cent of its executives. Over a longer time frame, this percentage tends to increase even further.33

 

  • Personnel issues are often neglected, delayed or not a priority.””

 

    • Finally, a high number of M&As fail or do not produce the intended long term results,””

 

W h e n a firm is acquired by another f i r m , it constitutes an existing workforce . Considering this fact, we w i l l describe the typical phases characterizing cross-border M & A processes and outline w h i c h H R practices are important at each of the different stages. A t this point, it must be admit-ted that the extent to which these H R practices are carried out very much depends on the extent to which integration of the t w o companies is actually aspired. I n the case of l o w integration (e.g. if the M & A is carried out mainly for portfolio reasons) both companies remain separate cul-tures. However, in the case of high integration, it is crucial for the M & A to meet the H R requirements of the different phases, which w i l l be outlined in the next section.”*

 

 

M&A phases and HR implications

 

Typically, mergers and acquisitions are characterized by a series of phases. Depending on the publication, these phases svili have different names. However, the M & A process usually consists of the following four steps:

 

 

• A p r e – M & A p h a s e including a screening of alternative partners based on an analysis of their strengths and weaknesses.

 

• A d u e d i l i g e n c e p h a s e ” ” which focuses more in depth on analyzing the potential benefits of the merger. Here, product-market combinations, tax regulations, and also compatibility with respect to HR and cultural issues are of interest.””

 

• In the i n t e g r a t i o n p l a n n i n g p h a s e , which is based on the results of the due diligence phase planning for the new company is carried out.

 

in the i m p l e m e n t a t i o n p h a s e plans are put into action.

88 CHAPTER 4 IHRM IN CROSS-BORDER MERGERS & ACQUlSmONS, INTERNATIONAL ALLIA14CES AI4D S M E s

 

 

FIGURE 4,4 HR activities in ttie phases of a cross-border M&A

 

I m p l e m e n t a t i o n a n d a s s e s s m e n t p h a s e

 

 

 

 

 

they three

 

 

 

 

 

P r e – M & A p h a s e

 

      • IdGntification of people – related issues

 

      • Planning f o r d u e diligence

 

      • Assessing people

 

      • W o r k i n g o u t t h e organizational/cultural fit

 

      • Forming t h e M & A steering t e a m

 

        • Educating t h e t e a m o n t h e HR implications

 

 

 

D u e d i l i g e n c e p h a s e

 

Estimating people – related

 

          • Transactional costs

 

          • O n g o i n g costs

 

          • Savings

 

          • Identifying a n d assessing cultural issues

 

I n t e g r a t i o n p l a n n i n g p h a s e

 

Developing e m p l o y e e culture – sensitive

 

c o m m u n i c a t i o n strategies

 

            • Designing key t a l e n t retention p r o g r a m s

 

            • Planning and leading Integration efforts

 

            • Developing a n e w strategy f o r t h e n e w entity

 

• Helping t h e organization c o p e w i t h c h a n g e

 

              • Defining an organizational blueprint a n d staffing plan

 

                • M a n a g i n g o n g o i n g c h a n g e , especially cultural c h a n g e

 

                • M a n a g i n g e m p l o y e e c o m m u n i c a t i o n s

 

                • Advising m a n a g e m e n t o n dealing w i t h people issues

 

                • A l i g n i n g HR policies, especially total rewards

 

                • M o n i t o r i n g t h e process of organizational a n d

 

people – related integration activities

 

                • Ensuring t h e capture of synergies via incentives

 

                • Initiating learning processes f o r f u t u r e M & A s

 

S o u r c e : B a s e d o n J . A . S c h m i d t , T h e Correct Spelling of M & A Begins with MR’, HR Magazine, Vol . 4 6 , N o . 6 (2001), p p . 1 0 2 – 1 0 8 . © 2 0 0 1 , Society for H u m a n Resource M a n a g e m e n t , Alexandria, VA. U s e d with permission . All rights reserved .

 

 

Various studies have shown that the H R department becomes increasingly involved in the phases of M & A integration as the process evolves. For example, a study conducted in Germany of 68 M & A s revealed that HR issues are only seriously considered once the integration strategy has actually been defined . “” Schmidt refers to a study of 447 senior H R executives w h o repre-sent mainly large companies w i t h more than 1000 employees. M o s t participants were f r o m N o r t h America, supplemented by companies f r o m Europe, Latin America and Asia. H e found that those companies which involved the H R department early in the process were more success-f u l than others w i t h late H R involvement.””” Both studies showed that the strongest involvement of the H R department t o o k place in the last t w o phases of the M & A process. F r o m this study Schmidt has derived best practices, which should be considered in the different M & A process phases. They are complemented by culture-specific aspects, w h i c h are of special importance i n cross-border M & A s (see Figure 4.4).

 

 

A n a n a l y s i s of the data gathered in the context of the Cranfield Studies on International H u m a n Resource Management ( C R A N E T ) shows that the f o l l o w i n g H R M measures have an important effect on the success of mergers and acquisitions: increasing involvement of H R M in the strategic decision-making processes of the f i r m , formalization of H R practices, support of the creation of organizational capabilities through training and development activities, and de-velopment of lines managers and internal labor markets. These aspects seem to be independent f r o m the consideration of specific M & A phases.” ‘

 

I H R M in A c t i o n case 4 . 1 analyzes the case of the DaimlerChrysier merger w i t h respect to the M & A phases and briefly outlines which H R measures were taken. If you compare the informa – tion given about the DaimlerChrysier merger w i t h the list of H R activities outlined in Figure 4.4 you can analyze the strengths and the weaknesses f r o m an H R perspective. W h a t lessons could be learned f r o m this process?

 

 

Strategic HRM and the role of the HR function in M&As ,

 

Aguilera and Dencker”” suggest a strategic approach to H R management in M & A processes. Based on strategic H R M literature suggesting a fit between business strategy and H R strategy