Mergers, acquisitions and takeovers are the order of the day in today’s business world. In this presentation we will discuss the adjustment and adaptation measures that are critical for the merger to run successfully. Such adjustments become all the more important if the two organizations are located in different countries. The measure could relate to the transition stage as well as to the period after the initial transitory stage. We will lay particular emphasis on the human elements of this situation.

Analysis
The key challenges that face the two organizations are discussed in the following sections. We will simultaneously also come up with some suggestions and recommendations.
1.0 Socio-cultural issues
1.1 Language

It is said that if you need to visit a government official or a business official for some work and if you can converse in the other person’s language half of work is done straightaway irrespective of the merit of your case. Language plays the core role in relating and striking a warm relationship. Language overcomes the built-in hostilities and prejudices. It builds confidence and cements relationships.
It will therefore be in the fitness of things if the key personnel as well as the personnel manning the supervisory positions are given a crash program in German language (for CDC, Inc.) and for English language (for ABC, Inc.). This applies more to the acquired company because presumably the company policies, strategies and internal work systems would be developed by ABC, Inc and followed by CDC, Inc.

It is strongly recommended that ABC, Inc. should engage some bi-linguist staff to work as say switchboard operators or secretaries in the executive or board offices.

1.2 Communications

The means of communication need to be updated and preferably state-of-the-art communications equipment that uses latest technology be made available at both ends. The need for interaction between the two companies would be much greater than if say ABC, Inc. was to deal with its branch office in Germany. Whether it is the telephone gear or the data transmission or any other communication need it should be accorded a top priority.

1.3 Personal Contacts
It is vitally important that the key executives make a visit to the parent company CDC, Inc. offices in Germany and develop direct one-to-one relationships with their counterparts and all other key managers there.
Such interaction may be extended to the sub-departmental and foreman level too if that is deemed important. The traveling costs would be a fraction of the costs saved when the merged companies run smoothly. The social integration is a top objective. A feeling of having become part of a bigger family must prevail rather than a lingering sense of bitterness, acrimony or hostility.

1.4 Systems
Accounting systems and systems of management reports must also be synchronized as much as is possible. There cannot be different accounting or management reporting systems. If the acquiring company has a policy on say inventory valuation then the acquired company too must adopt that so long as it does not contravene any generally accepted accounting principle (GAPP) applicable in the United States or the Securities and Exchange requirements.

1.5 Professional Coaching
It would be very beneficial for ABC, Inc to engage the services of a professional executive coach. Some key executives or managers may require additional support and it is advisable to consider offering executive coaching for them. The professional help will yield significant savings because there will be no need to remove an under-performing executive, or recruit and then train a replacement. The stress from the merger can leave a manager demotivated and dejected. The manager could feel bad about the change in his responsibilities, whom he reported to etc. (Executive Coaching after Mergers or Acquisitions 2004)

1.6 Legal Issues
ABC, Inc should take necessary measures to address the outstanding legal matters in consultation with the CDC, Inc. This applies both to the merger issues and those relating to clients, creditors, debtors etc.

1.7 Currency, units of measurements etc.
This subject must also be addressed at CDC, Inc. Its importance cannot be over emphasized. The currency conversion at rates of exchange that change by the minute need special consideration. Training of the relevant staff is a must. The units of measurements (metric system or any other system) need review to see if uniformity can be achieved, subject to observing the laws of the land.( Standard Merger Letter of Instruction 2004)

1.8 Job Exchange /Familiarization
A program of job exchange (cross training) between the two companies will also prove useful in fostering closer relations and understanding.

1.9 Special occasions
Festivals like Christmas; New Year etc. may be celebrated with special visits and exchange of gifts etc. from one company to the other. This should be extended to all levels of the company.

1.10 General Issues
ABC, Inc may arrange screening of a documentary film about CDC, Inc. and also about Germany. The documentary should cover different aspects of life in Germany like their living style, entertainment preferences, cuisine and eating habits, sports etc. This should be for general viewing among all categories of company employees and not restricted to senior management. The idea is to reduce the culture shock.

Summary/Conclusions
We have seen that a merger brings in its wake special matters of concern that are not faced in a business that runs as usual. To handle these concerns successfully initiatives are needed. We have described in some detail the various initiatives and ideas that will prove useful in running successfully a business that has undergone merger.