Mergers and Acquisitions - Project Planning

Chaotics: The Business of Managing and Marketing in the Age of Turbulence

Mergers and Acquisitions- Project Planning

Hanson (2001) advocates the use of a project plan as an organizational tool to schedule necessary actions and set deadlines. A simple plan document would have columns for the following:

1. Major steps in the process.
2. A breakdown of specific tasks within each step.
3. Ownership of each step/task, i.e. who is responsible.
4. Completion date for each task.
5. Comments/state of progress

A wide variety of project and spreadsheet software can be used with the updated project plan being made available to the integration team through web technology. In Hanson's opinion the project plan is a mechanism for communication and control of the integration process. But the project manager, she argues, must be tenacious in the following respects:

* Documenting necessary actions as they surface.
* Assigning them to a reliable owner.
* Determining appropriate deadlines that are compatible with other deliverables.
* Communicating with applicable parties.
* Following up to ensure that progress is on track.
* Escalating problems.
* Closing actions as they are completed.

HR Due Diligence

Hanson highlights the importance of HR Due Diligence as an early stage in the project plan. A due diligence investigation is designed to establish liabilities and vulnerabilities BEFORE signing the final agreement. According to Hanson the HR review offers the following possibilities:

1. Discovery of liabilities that could impact on the financial viability of the transaction.

2. Discovery of discrepancies that might be addressable in the agreement to both parties' satisfaction.

3. Discovery of variations in policy and practice that will be essential when integrating and communicating with employees.

The investigation may have to take place in two stages: a preliminary overview before the letter of intent is signed; a more thorough investigation thereafter when confidentiality can be guaranteed, but before the final agreement.

According to Hanson, the investigation involves a number of data-gathering components which divides into hard and soft. Hard facts are those that can be found in written records, reports, surveys, documented policies and statistics. They include information on pay, benefits, bonuses, employment regulations, third party claims, employee relations, safety, and so on. Soft data are less easily established but can be critical, including: key employee losses, management style, CEO reputation and senior management integrity.

Hanson points to the particular importance of compensation and benefits plan information, not only in the due diligence stage but also later when close comparison is required. Issues of long term liability are critical as regards pension plans and medical benefits.

In later stages of the integration plan, pay and other benefits have implications on the cost of 'golden parachutes' for people no longer required. Serious differences between salary structures, overtime, and 'perks' may also have significant consequences on morale and retention. Inevitably the question arises as to whether the more generous schemes are to be pushed down or the less generous increased in the future.

Mergers and Acquisitions - the HR Dimension
Strategy Articles and Books

The M&A Transition Guide: A 10-Step Roadmap for Workforce Integration

Search by keywords:

The Art of M&A Due Diligence