MGMT4010 Leadership & Change Management Winter 2024 Assignment #1 Case Study: Merger of Two Medium-Sized Companies This case study about the merger of two beverage companies (company A and B) to form a medium-sized wholesaler company (“Super Beverage Company". • Company A: Known for its dynamic and profit-oriented approach, Company A has a strong track record of growth through strategic customer acquisition. The company culture emphasizes efficiency and flexibility, with employees often working overtime during high- demand seasons to meet customer needs. Financial decisions are driven by profitability, demonstrating a keen focus on financial performance. Company B: Company B has a more relaxed and employee-friendly work culture. They prioritize work-life balance, with strict adherence to regular working hours. Their financial approach is less aggressive than Company A, focusing more on steady growth and maintaining a comfortable work environment for employees. Frequently, company mergers are viewed with suspicion by the employees on both sides, especially at the beginning. However, this does not always the case, but that initial excitement does not mean a totally smooth change. The merged company (Super Beverage Company) now employs around 90 people. It was formed in 2011 from the merger of the two specialist beverage companies (A and B). These companies have a successful history of cooperation on several levels, particularly in purchasing. In an environment of fast business growth, mainly achieved by gaining new major customers, the employees of both companies felt good about the merger. This positivity was because, unlike many mergers aimed at cutting down employees to save costs, this merger did not plan to reduce the workforce. Also, the employees and management of both companies were familiar with each other and had previously worked together smoothly. The excitement was further boosted because the merger created something new, with neither company dominating the other. Evidence of this was their move to a new, bigger, and more modern offices, and the equal representation of partners from both companies in management. However, the financial contribution was not split evenly at 50% each, as initially thought, due to the greater financial power of one of the companies. To promote teamwork from the beginning, professional half-day team-building workshops were organized in all departments. Despite these promising starts, challenges soon emerged, stemming from the different cultures of the two companies. This was especially evident among the employees. In the beverage industry, which is seasonal, the demand and workload significantly increase during hot summer days, resulting in an increase in workloads in tasks like restocking and handling returns. In the first of the two merging companies, Company A, employees routinely worked extra hours during busy periods to meet customer needs quickly. In contrast, Company B always stuck to their fixed closing times, no matter the season. This difference in work practices caused some tension among the employees. However, this situation led to some changes on both sides. For instance, several Company A employees began to appreciate the idea of leaving work on time, regardless of the workload. Meanwhile, some from Company B started to adopt the work ethic of putting the company's success first. These cultural contrasts were also evident among the shareholders. Company A was focused sharply on making profits, while Company B had a less intense approach to cost management. It became clear that these cultural differences were behind their varying financial strengths. To succeed in the key account business, it was deemed essential to have a stronger focus on cost efficiency. This led to discussions among shareholders, resulting in the decision for Company B's original shareholders to leave the business. This change, however, caused worry and division among the employees, with fears of losing their support systems. To address these issues, management took a transparent approach. They acknowledged the problems but also showed consideration for the employees' concerns. Workshops were organized where management personally informed the staff about these changes. The key message was that an employee's future in the company would depend on their performance, not their original company affiliation. This commitment was reinforced by the retention of one of Company B's former shareholders as a manager, demonstrating the sincerity of their words. The workshops were not just for information dissemination; they also provided a platform for employees to raise questions and discuss their concerns openly. Recognizing that employees might be reluctant to speak up in formal settings, management also used informal opportunities around the office for deeper, casual conversations. The company's continuous growth played a role in easing the situation. New employees, who had no previous affiliation with either Company A or B, were strategically placed in teams to prevent old conflicts from resurfacing. Despite these efforts, some employees who were not in favor of the new direction had to be let go. However, these departures were handled respectfully to maintain dignity for all involved. Looking back, these strategies were crucial in developing a united company culture, laying the foundation for many years of successful growth. Instructions: 1. Work together with your group member to critically answer each of the questions listed below. 2. Use question and answer format. 3. 4. One group member is to submit the report via the designated D2L Dropbox by the due date/time. Before submitting your assignment, please check it through Turnitin. Any instance of academic dishonesty (including, but not limited to plagiarism, and AI-generated text) would result in an appropriate penalty. Writing Instructions 1. Write an introduction about what this paper is about (about 75 words). 2. Summarize the case study in your own words (about 150 words). 3. Answer the following questions: 1) Change Management Strategies: a) How did the management approach change management during the merger to ensure a smooth transition? b) What specific change management strategies were implemented to address the differences in corporate cultures and work ethics between the merging companies? c) Discuss any proactive steps taken by the management to foster a positive attitude toward change among the employees. 2) Employee Resistance and Mitigation: a) Identify instances of employee resistance mentioned in the case study and explain how they were manifested. b) How did the management identify and address the concerns and fears of employees during the shareholder changes to mitigate resistance? c) Explore the role of open communication and transparency in overcoming resistance during the merger. 3) Conflict Resolution: a) Describe the potential conflicts that arose among employees, especially during the discussions about the departure of original shareholders from Company B. b) Discuss the specific measures taken by the management to resolve conflicts and maintain a positive work environment. c) In what ways did the management ensure that separations of employees who did not support the new course were handled with minimal negative impact on both parties? 4) Communication Strategies: a) How did the management communicate the new situation and changes to the workforce, especially in relation to the adjusted capital share and departure of original shareholders? b) Evaluate the effectiveness of the workshops and chance encounters as communication tools in managing resistance and addressing critical issues. c) Discuss the importance of maintaining an open and transparent communication channel between management and employees in change management situations. 5) Employee Engagement and Inclusion: a) How were employees from both merging companies actively engaged in the change process to foster a sense of inclusion? b) Explore the role of team-building workshops and casual encounters in breaking down barriers and building a unified corporate culture. c) Assess the impact of involving employees in discussions and decision-making on the overall success of change management. 6) Lessons Learned in Change Management: a) Reflect on the key lessons learned from the case study in terms of change management, employee resistance, and cultural integration. b) If faced with a similar merger scenario, what additional or different change management strategies would you consider implementing based on the experiences discussed in the case study? c) How did the successful management of change contribute to the long-term growth and prosperity of the merged entity?/n5) Employee Engagement and Inclusion: a) How were employees from both merging companies actively engaged in the change process to foster a sense of inclusion? b) Explore the role of team-building workshops and casual encounters in breaking down barriers and building a unified corporate culture. c) Assess the impact of involving employees in discussions and decision-making on the overall success of change management.

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