In the contemporary management environment, mergers and acquisitions are hot topics; particularly as mergers and acquisitions are among the most commonly used strategies for growth.The pitfalls of...

Running Head: CASE STUDY
CASE STUDY
5
CASE STUDY
Table of Contents
Question 1.    3
Question 2.    4
Question 3.    6
Question 4.    7
Question 5.    9
References    11
Question 1.
The present case revolves around two major pharmaceutical companies from two different continents, Europe and America, who have decided to merge their respective companies DeWaal Pharmaceuticals and BioHealth Labs into a new mega-company DeWaal BioHealth. However, Steve Lindell, CEO of BioHealth Lab is currently experiencing a drop in stocks prices of the company along with its most qualified people resigning from the company. The new merged company demands top qualified 65 personnel for filling the posts out of 120 personnel from both continents. The New York has been selected as the global headquarters and Steve Lindell is proposed for taking the charge of CEO of the newly formed company. As a result in the present case, Steve is mainly facing the conflicting values of retaining its highly qualified employees of BioHealth Labs and post them within 65 senior level jobs.
Greve and Man Zhang (2017) stated that during merger and acquisitions employee retention pose a great challenge and also prove to be a threat toward the failure. Negative attitude tends to develop among the employees where they become uncertain about the organizational goal, job security and a feeling of confusion arise but leadership credibility. Similarly in the present case, if Steve fails to place their most eligible and competent employees in the senior level posts of the newly merged company they might feel betrayed and lose trust thereby resulting in employee turnover and the high cost of replacement. During such a delicate process it is expected to develop an efficient communication between the employee and leader to minimize any confusion and giving birth to conflict.
As per the Synergy Gain theory, merger and acquisitions are mostly done to extract the synergetic benefits from the combination (Lindsey et al. 2017). The value of the combined firm is expected to be higher than the present. This is a reason Steve is also merging its company to enhance the profits and retain a maximum of a qualified employee. However, the conflict is arising as the opposing firm is in an upper hand position for making key decisions. Alison Whitney is the director of sales and marketing of BioHealth Labs since one year has been a great contributor towards the organization success. According to her the CEO of DeWaal Pharmaceuticals, Kaspar is pulling the opportunity of losing potential candidates from their company and will be filling up the 65 senior level post with a majority of their employees. Here the conflict arises because of the perception that Kaspar would be contributing more towards making key decisions in filling the senior level positions of the newly formed company.
Question 2.
The integration process between the two merging companies is mainly concerned with the arising conflict of top management staffing and its structure. In the previous merger integration studies, it has been found addressing the communication and employee retaining challenges decides the overall success of the formed company. Communication challenge is presently among the top factors that are causing the company's synergies to fail. Empowering and communicating with the existing employees creates a positive work culture that are fundamental parts of integration (Appelbaum et al. 2017). Further, when mergers and acquisition occur the management and employees experience the most confusion and conflict. The same case is evident within the present scenario of DeWaal BioHealth merged company.
Lack of communication and fear have caused Steve to hide critical information from Alison, the BioHealth’s director of sales and marketing. Even though the final decisions regarding the department in charge was made earlier, Steve chose to keep it to himself which produced a greater level of confusion among the workforce. During the merger negotiation, the top position of the newly formed organization was already traded off. CEO of DeWaal Pharmaceuticals, Kaspar has proposed for leading the HR operations in Europe and global marketing. Moreover, Steve settled like horse trading by holding the COO, CFO and R&D department. This led the DeWaal's Albert Schenk to take the position of global marketing head in the new company which threatens the position of Alison. By hiding this information and producing a communication gap between the workforce and Alison, Steve is surely going to face severe consequences.
Supporting the argument made by Grant Freeland that both Steve and Kaspar are not as effective in selecting key people as they are thinking. As per the advice provided by the commentator it pointed out Steve and Kasper are wrong on at least three points. Primarily the speed at which they are approaching for selecting the top management positions might hinder their business efficiency. The senior executives have a major role to decide the success and failure of the merged company and with such insignificant approach might produce a poor decision...