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Introduction
A small IT startup called Innovative Solutions (INOS) was acquired by a multinational enterprise (MNE). The cultural attributes of two companies are drastically different, which requires efforts on cultural assimilation to integrate INOS into the structure of MNE. The smaller company has horizontal, relaxed, non-hierarchical, and innovation-focused organizational culture, while MNE relies on hierarchical, vertical, partially bureaucratic, and efficiency-focused elements. MNE is open to preserve the innovative approach of INOS, which can be an area of success in the process of cultural assimilation. The smaller company is to become an extension of the MNEs larger IT department, so INOS will be responsible to the head of the IT department directly, which reduces the impact of horizontal structure. However, MNE has its established procedures and policies, which INOS is required to adapt to. The employees of the smaller company need to adjust to the system of accountability and hierarchy existing in MNE.
Summary of Strategy
Acquisition of the smaller company by MNE requires active work with HR to adapt to a new organizational culture. In the case of INOS, employees need to adjust to existing bureaucratic elements, systems of quarterly progress reporting, efficiency evaluation, as well as a certain degree of freedom limitation under existing policies and procedures. INOS is to merge into the MNEs IT department, which implies a loss of autonomy in decision making, as well as new accountability procedures. Sarala et al. (2019) underline that extended decision-making power can reduce employee resistance and build an environment conducive to the transfer of knowledge and best practices (p. 311). Thus, the first strategic step to overcome the frustration of changing elements of organizational culture is leadership alignment. The HR specialist needs to enable INOS employees to participate in collective decision making through regular sessions and discussions. This approach will allow to preserve the horizontal structure familiar to startup employees within the framework of MNEs culture. Accordingly, the top management of INOS will participate in these sessions and be responsible for both decision making and communication with the head of the IT department.
Additionally, for effective work within the framework of MNE INOS, it is necessary to develop procedures for assessing the performance and competencies of employees. Sabuhari et al. (2020) note that employees need to have a high level of competence in adapting to changing conditions in order to maintain performance. Thus, it is important for the HR specialist to create criteria that could monitor changes in employee performance. The researchers note that job satisfaction is strongly associated with professional motivation and performance level (Bonder & Capron, 2018; Ismail et al., 2018). Therefore, identifying performance dips can help the HR professional in identifying employee adaptation issues to organizational culture and individual work with these issues.
Finally, it is important not only to maintain the most familiar conditions for employees inside the acquired INOS, but also to integrate it into the IT department of MNE. It is important for an HR specialist to train employees to get acquainted with the policies and procedures of the larger company, which are provided by the bureaucratic structure. Employees need to adapt to the new conditions for assessing progress, as well as reporting on all performance criteria. Developing the skills of employees to interact with the bureaucratic structure of MNE will allow them to feel more comfortable within the company. Additionally, it is important for the HR specialist to provide comprehensive support in training employees in this regard.
Reasons for Success
The main reason for the success of this recommendation is the introduction of INOS into the existing IT department. In this way, the smaller company will communicate directly with the head of the department, thus maintaining a horizontal structure within the acquired company. This aspect allows INOS to maintain a certain freedom in decision-making, which extends to the possibility of collaboration of all employees of the company. In this regard, employees will not experience extreme emotional pressure, as they can maintain their organizational culture, while the top management of the company will communicate with the IT department. Performance criteria will allow HR to identify areas in need of training and development in order to keep employees motivated. Familiarity with MNE policies and procedures will also help you adapt to the bureaucratic structure of a large company.
Resources Needed
In order to successfully implement the strategy, time, knowledge, and human resources to develop and integrate appropriate policies are needed. In particular HR specialists require support from MNEs HR department to navigate through existing policies and procedures. Additionally, extensive time is required to develop relevant performance criteria, which also involves participation of MNEs HR department. Finally, financial resources are needed to provide employees benefits during the process of adaptation to maintain motivation.
Timeline
Conclusion
The integration of INOS into MNEs IT department allows the smaller company to maintain a certain degree of autonomy. This aspect implies that INOS employees within the acquired company can participate in decision making to maintain the familiar horizontal organizational culture. However, in order to adapt to the vertical bureaucratic structure of the MNE, it is important to develop relevant performance criteria for measuring effectiveness. Familiarizing employees with MNE policies and procedures will also allow INOS to assimilate into the companys bureaucratic structure.
References
Bonder, J., & Capron, L. (2018). Post-merger integration. Journal of Organization Design, 7(3), 1-20.
Ismail, M., Baki, N. U., & Omar, Z. (2018). The influence of organizational culture and organizational justice on ground cohesion perceived by merger and acquisition employees. Organizations and Markets in Emerging Economies, 9(2), 233-250.
Sabuhari, R., Sudiro, A., Irawanto, D. W., & Rahayu, M. (2020). The effects of human resource flexibility, employee competency, organizational culture adaptation and job satisfaction on employee performance. Management Science Letters, 10, 1777-1786.
Sarala, R. M., Vaara, E., & Junni, P. (2019). Beyond merger syndrome and cultural differences: New avenues for research on the human side of global mergers and acquisitions (M&As). Journal of World Business, 54, 307-321.
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