MN5131%20HRM%20in%20International%20Mergers%20and%20Acquisitions

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MN5131HRM in International Mergers and
Acquisitions
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Strategic AlliancesKey aims
expand product, geographic and/or customer
reach share strategies and vision handle
environment more effectivelyDifferent forms,
e.g. merger international joint venture
(IJV) wholly-owned subsidiary turnkey
agreementMergers cyclical boom in
1990s key means of international
reorganisation
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International Joint Ventures (IJVs)How do we
define an IJV?Why do companies enter into
IJVs? increase market power by combining
resources reap economies of scale reduce risk
by sharing it cooperate and avoid
competition regain competitive edge symbolic
benefits transfer of technology / management
systems different opportunities for different
companiesWhat are the critical success
factors?
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Factors influencing IJV success and
failure trust between the partners trust
within the project compatible national systems
cultures compatible organizational systems
culturesKey HR issues in strategic
alliances assignment of execs / promotion of
managers cultural empathy / negotiation
skillsCriteria for success? HRM
auditing (i) partner selection (ii) start
up (iii) venture management
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ChinaRecent trends growth of FDI (MAs,
IJVs, partnerships) largest number of MNC
affiliates in any economy (24m people) attractive
location for MNCs (cheap labour, consumer
markets) shift in mode of market entry (from
IJVs to MAs / WFOEs) shift in RD investments
(from the triad to China)Getting into
China complex local rules of the game role
of intermediaries influence of central, regional
local government
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Key difficulties in China transparency of laws
and regulations customs and export
procedures complexity of tax laws and
government regulations contracting based on
informal connections (guanxi) lack of formal
legal contracts intellectual property rights
(IPR) not well protected importance of group
orientation, clear hierarchies, keeping
face recruiting, managing and motivating
personnel skill shortages and weaknesses in
Chinese management important areas for HR
interventions
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International MergersMajor HR issuesOutcomes
depend on context / rationaleCorporate
transformation through MAsPoor performance of
mergersPressures to integrate home country
effectsLegacy of distinct national systems -
host country effectsThe search for balance
merger of equalsThe political dimension to
MAsRole of the HR function
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HRs Contribution to International MAs8 key
policy areas understand strategic rationale,
constraints opportunities ensure cultural
due diligence prior to deal move quickly but
fairly in appointment of new mgmt teams
identify realistic synergy
targets comprehensive data on reward costs of
harmonisation establish flexible project
management process communication consistent,
truthful and timely HR as business-partner
practical financially-astute solutions