BritAm Com
The global economic situation, back in 2000 mirrors the bubble we are in today.
The first ‘dot-com bubble’ began in the early 90s when access to the internet was
expanding. Everyone seemed to believe that the internet was the next big thing
and the investment in internet and technology companies grew rapidly. The
valuation of such companies’ sky rocketed. Stock prices went higher and higher
and it seemed like these companies could do no wrong.
Companies started engaging in large corporate structuring events including
mergers and acquisitions. Mergers are considered one of the riskiest paths to
success. To ensure success, elaborate discussions transpire both pre and postmerger
on how to create a delicate balance in an uncertain environment.
American media and entertainment giant AmCom and their British rival BritCom
decided that the best move for them would be a merger. The strategic rationale
behind the merger was to create one global media and entertainment maven with
a large footprint in both developed and developing economies. Combined, they
were valued at $3.4 billion. This merger was dubbed to revolutionize the media
industry especially since it was timed at the wake of the dot-com boom. AmCom
had investments in Africa while BritCom had investments in Asia. Though the
nature of the two companies was similar, their organizational structures and
cultures were completely different.
The differences in their organizational culture were as follows:
AM COM
1) Centrally managed
2) Followed a top down management style
3) Focus on stock price appreciation
4) Compensation to employees wasprimarily through stock options
5) Ran a very tight budget
BRIT COM
1) Decentralized management which gave
importance to autonomy
2) Followed an improvisational
management style where managers
were free to make decisions impulsively
and this was seen as essential for the
creative growth of the company
3) Focus on growing the company in the
European and Asian markets
4) Employees were adequately
compensated by profit sharing
5) Spent liberally on marketing and
providing
value additions to customers
The deal was given such a high valuation because of very promising prospects.
BritAm Com, the newly merged entity was expected to have a monopoly in the
market. Both were heavily levered firms and as they were unable to reach their
predicted success due to several reasons, BritAm Com defaulted on their loans.
The company was experiencing a serious liquidity crunch.
In the wake of this financial crisis, the H.R department of the merged entity faced
several employee issues. The two sets of employees were unable to get along as
they were used to looking at each other as rivals. There was difficulty in adjusting
to each other’s culture and this resulted in internal conflicts. As a result,
productivity reached an all-time low and the merger was deemed a failure.
Task:
Due to the HR crisis, the newly merged entity BritAm Com has approached your
conglomerate for HR consultancy services. As the HR consultant for BritAm Com,
you are required to design a suitable post-merger integration plan which should
include the following aspects:
1) Your strategies for hiring or firing in accordance with the prevailing
situation and the basis for making these decisions
2) Design the new organizational structure, keeping in mind the different
organisational structures formerly adopted.
3) Define the Organisational culture in BritAm Co
Submission guidelines:
- PowerPoint presentation not exceeding 8 slides (Including opening and
closing slide)
- Report of less than 15 pages. FOLLOW THE REPORT FORMAT.
- Submission deadline: 4:00pm tomorrow.
- Any delay in submission will result in negative marking.
- Email Address: [email protected]