Trade Union Merger Strategies: Purpose, Process, and Performance

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Therefore, decisions can be categorized by the stimuli that evoked them throughout a continuum, including opportunity decisions, crisis decisions, and problem decisions. From the perspective of solution, decisions can be classified as determined, ready, customized, and modified. These definitions established the bases for the creation of a SDMP general model, shown in Figure 1, which is composed of three phases: Identification, Development, and Selection. Inside each phase, the main routines recognition, diagnosis, search, design, evaluation-choice, and authorization , support routines decision control, communication and policies , and dynamic factors are determined Mintzberg et al.

These authors state that the SDMP general model is characterized by not having a simple sequential relationship between phases and loops can occur within each one according to the dynamics of the decision-making process. Within these occasional loops occur factors called dynamic factors according to Mintzberg et al. They can be configured in interrupts, scheduling delays, feedback delays, timing delays and speedups, comprehension cycles or failure recycles.

The occurrence of dynamic factors is typical of strategic decision-making, showing its nonlinearity, complexity and not structure. Figure 1. General Model of the Strategic Decision Process. Source: Mintzberg et al. The study by Mintzberg et al. In any case, the classification of strategic decisions according to the configuration of the course of the decision-making process depends largely on the type of solution adopted and the nature of the dynamic factors involved Mintzberg et al. To evaluate if the situation involves the equalization of a problem or crisis, or even if it is shown when an opportunity is taken, besides the quantity and intensity of DMP interruptions, will implicate on the way to be followed and the results over time.

Since the initial thoughts of Herbert Simon, going to a multiplicity of resulting ideas of a large number of authors, the evolution in the study of strategic decision-making in the last fifty years has revealed mature paradigms, but with incomplete approaches Eisenhardt and Zbaracki, Several researchers have sought to collaborate in the composition of integrated models of strategic decisions.

Table 1 summarizes the theoretical reference consulted pointing these approaches in their integrated models. Table 1. Source: Literature review by the authors. The decision-making rational approach derives from the classical economic theory, which entails that the human being homo economicus is gifted with excessively overbearing rationality, which is omniscient enough to make his own choices Shimizu, This rationality entails that the decision maker considers all available alternatives, identifies and assesses all the consequences that may result from adopting each alternative, and selects the preferable alternative in terms of best value for its end Meyerson and Banfield in Hart, , resulting in an optimal solution for the problem being analyzed.

However, Simon proved that these decisions occur under limited rationality, which involves concepts connected to the sequential attention to goals, partial resolutions of conflicts, and meeting of objectives and criteria Dean and Sharfman, This approach is characterized by trustworthy and detailed quantitative analyses of the alternatives to the decision, by the relatively clear delimitation of the problem being analyzed, by the search for the optimization of solutions based on an identification structure, by the development and selection of the alternative to the decision, by the search for risk minimization, instability of the environment, and uncertainty, and by the top-down direction of power, with a pre-determined hierarchical relation prevailing Mintzberg et al.

This approach is originated in studies on the field of political sciences in the s involving analyses about conflicts and coalitions between government decision makers Lindblom, It is based on the finding that organizations are coalitions of people competing for different interests.

Under the political bias, it is not the organization that has objectives, but the people that are part of the organization Fernandes et al. The capacity to influence the results of organizational decisions can be considered a renowned source of power. In this context, DMP can be understood by solving conflicting demands of individual and groups interests Pettigrew, This approach is characterized by the negotiation, conjugation of interests, fight for power and creation of coalitions for conflicts solving, by the privilege of personal objectives when analyzing the alternatives to be chosen, in detriment of global objectives, by power disputes and influence tactics determining the prevalence of decisions, due to the collision of political forces in the organizational scope, by tactics of using the time, opportunism and domain of communication channels reflecting on the power disputes and persuasion for the determination of the preferred decision choices Eisenhardt and Bourgeois, ; Eisenhardt, a; Eisenhardt and Zbaracki, ; Dean and Sharfman, While observing North-American public managers, Charles Lindblom, in , identified that decision makers actually do not clearly know the values and objectives of the organization, but choose apparently in a fragmented and confused way between the conjugated options of values, objectives, and different paths, by incorporating aspects of power and experimentation on the decision Lindblom in Mintzberg et al.

Values and policies are chosen simultaneously, in a process marked by interdependency, where there is a high capacity of improvement and adaptation. It is a combination between rational planning and acceptance of the existence of emerging strategies. The incremental approach to strategic decision making is characterized by the instinctive process of choosing alternatives, built based on learning and experimentation; by the problem analyzed not being fully clear; by the generation of alternatives as the objectives are clarified for all; by the search for the creation of a stable environment aiming at the exchange of knowledge; by the decisions to be made inside the organizational subsystems, so that they are incrementally implemented globally; by the implementation of solutions through bargain and building of understanding and compromise; and by the direction of power being shared Quinn, ; Simon, ; Lyles and Thomas, ; Das and Teng, This model comprises the decision made without the due consistency, when the manager does not try to identify and analyze the problem before designing the possible solving alternatives.

Cohen et al. It can be said, therefore, that decisions based on model "Garbage Can" stem from choices looking for problems, problems looking for choices, solutions looking for problems to answer, and decision makers looking for something to decide Eisenhardt and Zbaracki, This approach is characterized by the process of choosing alternatives being confusing, not structured and ambiguous organizational anarchy , by the analysis of the problem being informal and superficial, with fluid participation from any member of the organization, without a clear notion of direction and objective, by the nature of the organizational environment being complex and unstable, so that the decisions are made without clear criteria of analysis of the problem, by negligence regarding the discussion of alternatives, by the course of the deadline or lack of appreciation from the part involved with the decision-making process, by the decisions being made only when problems are accumulated, and by the solutions of the problems occurring in a random gathering of choices searching for problems, problems searching for choices, solutions to be implemented searching for problems and decision makers searching for something to be decided Cohen et al.

According to Lyles and Thomas , the subjectivity is involved with the process of defining problems and their alternatives. Schwenk complements that the decision makers are prone to selective perceptions, since they are unable to assess all the relevant variables for the decision. Schwenk , elaborated a SDMP model based on the following specific topics of strategic cognition: use of heuristics and cognitive biases, strategic presupposition, cognitive maps and schema, and analogies and metaphors.

These topics comprise the background through which we can understand how the decision makers frame and solve strategic problems. This study adopts a qualitative investigation method, with descriptive-exploratory content, with the aim to understand the phenomena studied based on the view of the involved with the situation being analyzed. The research is cross-sectional, since the data were obtained, regarding SDMP, at the same time.

In this study, the literal replication prediction of similar results was aimed. The criteria adopted in the definition of the cases were: a the strategic decision-making processes must have been concluded for at most two years Mintzberg et al. Such criteria aimed to control differences deriving from environmental variables and their effects on the study of the strategic decision-making processes being analyzed Eisenhardt, a.


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Table 2. Thematic Categories. The questions applied to respondents were based on the topics of analysis of this work in accordance with Table 2. The duration was of about one and a half hour to the main talk of each case and approximately one hour for secondary interviews. Some precautions were taken, in order to reduce the occurrence of distortions and faults due to the lack of memory of the ones involved with the decision-making processes that could hinder the replication of the results. The search for evidence took place in multiple data sources, with initial interviews with the main managers of the companies being studied and with the other participants in the latest DMP that somehow were involved in the process Mintzberg et al.

A descriptive summary of each DMP was elaborated and guided by the research protocol, with details of the stages noticed in the interviews. This would serve as a basis for later checking with the informers and guarantee that the situation was fully understood, as well as the validity of the construct. In turn, the C case was characterized by the combination of Delta Company, medium-sized, and Sigma company, large sized, resulting on the Sigma Brazil Company. For identification, fictitious names were adopted, maintaining the confidentiality of information provided by participating companies and establishing focus specifically on the study results themselves, as commitment set out between researchers and their sources and executed in the research protocol.

A number of eight interviews were conducted. Aiming at preserving the confidentiality of the information provided by the participating companies, fictitious identifications were given to the interviewees and the companies. Other data sources were accessed, such as information in websites and informal conversations with the employees of the companies being studied by means of personal or telephonic contacts.

This information was the basis for a report of each case study and later convergence of information, aiming the triangulation of the data obtained. The content analysis technique through thematic categorization was used Bardin, The procedure of analysis followed the conduction of some phases.


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First, the data were trialed and organized by each case. Afterwards, all the interviews were transcribed in order to provide the analysis and identification of the particularities of each case, as well as its content. Next, categorical analysis was performed following the themes established, in order to generate codification of the material collected.

According to Yin , in this stage it is possible to examine, categorize, classify the data, or, if necessary, re-combine the evidence obtained, aiming the initial propositions of the study. Initially, the content of the interviews with the main executives of the acquired companies was analyzed. Subsequently, the content of secondary interviews with another informers involved with each DMP studied was also analyzed, besides the data from documents provided by the companies.

Such procedure aimed to provide the conditions for the data triangulation, in order to achieve the internal validity of the research. Finally, data inference and interpretation was performed in order to establish the conclusions of the study. Data were piled and consolidated, establishing a comparative analysis of common and complementary points found in each case study, aiming to identify common evidence and patterns Eisenhardt, b.

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The comparative panorama allowed the assessment of the way such as strategic decision-making processes in companies of the Services and Information Technology segment in Rio Grande do Sul were involved in business combination operations. This section presents the results of the analysis of the cases studied based on the three thematic categories mentioned above. When analyzing the type of business combination strategy that was configured in the cases investigated, it was found that, except for the case B, which resulted in the merger of two similar companies, the cases A and C showed growth strategies through acquisitions.

However, there are differences in these two cases. In case A, the classification found was an acquisition by the acquiring company Gama, with horizontal diversification conglomerate type, since the intention was, in fact, the assembly of a holding of companies with complementary actions.

Making Mergers E-Merge: Using the Internet to Jump-Start Integration

The case C, however, is a purchase with direct vertical integration, since Sigma, which acquired the Delta Company, wanted to expand its operations in the Latin American market in order to meet companies operating in this market that were already its customers in other operating markets. Regarding the strategic objective checked with the acquired companies MAP1 , the focus was to find out what the acquired companies wanted by accepting the business combination invitation made by another.

The theoretical reference points to, especially about issues related to increased competitive capacity, economies of scale, optimization of resources, access to new technologies and the possibility of the partners investment income Mintzberg et al. In cases B and C, cultural alignment and personal affinity between the involved leaders of both parties was highlighted.

Mutual trust and open communication channels met the expectations of representatives of invited companies. Furthermore, the possibility of personal gain, either in monetary terms or in terms of professional development, was another point noted. In the cases analyzed, the financing of the operation was done with the applicant own resources. Strategic decisions tend to be faster if the decision-making power is centralized or have few participants involved, when the amount of interruptions due to political conflicts can be small and when fewer alternatives are to be analyzed Eisenhardt, a.

The common thread in the cases analyzed was the centralization in conducting the strategic decision making process.

Understanding The Mergers & Acquisitions Process

While other members of the companies have participated directly or indirectly in strategic decisions, the dialogue with the applicant company was made by its chief executive. This executive has assumed the function of communicating the development of negotiations for those involved in the process and facilitates possible internal conflicts once arising during operation, minimizing the occurrence of interruptions to its resolution. However, contrary to the model proposed by Graebner , the use of financial and legal advisors in the negotiation by the company acquired in the case C, did not represent an obstacle to the closing of trading; on the contrary, the use of consultants as support on technical matters relating to the operation helped to define important items of trade and contributed to its successful completion.

In the view of the respondents, this was seen as a sign of integration and respect to the preliminary organizational culture.

Trade Union Merger Strategies: Purpose, Process, and Performance

Finally, another point highlighted by respondents was the strategic alignment resulting from the business combination. Participation in a business combination transaction allowed BetaGama, AlfaStigma and Sigma Brazil, to obtain important competitive advantages due to the integration of technology, knowledge, personal, financial and proceedings arising from their parent companies. In the interviews, it allowed them to an organizational reconfiguration, resulting in increased management of these companies to new heights. The summary of this evidence collected in the case studies are presented in Table 3.

Table 3. To enhance the market share, while strengthening its position in the market in the face of a competition that was showing to be stronger. To enhance the national performance of Delta, in addition to s entering other market segments yet to be explored, in order to work in the future through association with other international company.

https://prososramru.tk Complementarities of the business from both merged companies, generate competitive advantages the would not be placed by the companies one alone; Increment of the joint turnover of the participating companies when they are united; Enhancement of the sales potential and technical support for products and services of the company resulting from the merger.

Access to global clients from the purchasing company, while having alignment of local businesses with the ones already made internationally; Financial contribution made by the acquiring company; Possibility to insert Delta's products and services into other global markets attended by the acquiring company, and contribution of technical knowledge and Sigma's market into Delta's processes; Cultural similarity and relationship based on mutual trust.

Use of own resources from the companies involved for merger financing; Competitive strengthening of the company resulting from the operation in the market and from the merger, in order to raise barriers to the entry of new competitors or hamper strong competitors; Maintenance of director board of both companies in the business; Optimization of the administrative structure of the company resulting from the operation, making it more efficient and functional because of the reconfiguration of indirect costs.

Propensity for the business to be concluded from both parts; Negotiation process based on trust in the performance of the acquiring company; Business alignment from both companies; Use of external advisories specialized in aspects of the acquisition operation that Delta did not have conditions to analyze financial and law areas ; Delta's Board is maintained for conducting the subsidiary Sigma Brazil; Integration of processes, technology, and knowledge, while generating synergies and strengthening competition of the company emerged with the acquisition.

Source: Research data. Though in cases A and B the invitation made by the proposing companies have referred to the solving of problems connected to the competitive capacity of the companies, the passive so to speak condition regarding the process of business combination allowed these companies to examine the proposals received in the light of this condition at the time.

The DMP was conducted with the adoption of a customized solution for the companies except for case C, that adopted a prompt solution, following the proposal of the purchasing company , aiming to adapt the proposals offered by the potential acquiring companies to the needs and wishes of the acquired companies. Eventual restriction or negative reactions to the proposals of business combination practically did not occur.

It made possible for conflicts allegedly be inexistent between the parts and collaborated for the time with the SDMP to be relatively short in both cases, being in average five months and a half. There is not much emphasis on domestic acquisition, as companies from these regions continue to show an increase in desire to drive growth through a cross border acquisition. At the same time Singapore and UAE are two of the countries which believe in growing through cross border acquisitions. Australian is focussing on domestic market only as part of their acquisition strategy.

So the role of managers plays a significant role in this era of globalization.

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Each organisation which is merging brings a culture with itself, when merged with another, is bound to affect each other. So change is inevitable. During merger and acquisition, organisation faces the most abstruse and recalcitrant problem: resistance to change. The manager has not communicated well the detailed aspects of the change. People may only understand the change in broad terms and not in practical terms. Employee does not know how they should go about for change and are not convinced about the purpose of change.

Too many parties involved in the change without a clear definition of their roles will bring confusion and frustration. Feeling of comfort in the existing routines and not interested in changing the existing ways of doing things. It is also a predominant reason for the people to accept change. They are not sure that once change has taken place, things will become better for them. It is because of uncertainty about the nature of change. They are not sure what is happening and what future holds for them. Direct supervisors not implementing the change in a proper channelized way.

Change programs fail not because of lack of skills but because of courage to implement them. If change is effectively managed. A clear and outright declaration on how people are going to be rewarded if they achieve successful results from change would go a long way. The second stage is transition which basically involves teaching the work force new concept. And the final stage is refreezing the culture by reinforcing new practises, attitudes and behaviours once the change was implemented. Similarly there are different approaches to change.

Theory E main goal is to maximize shareholder value. It manages change from the top down. Its main focus is to build structure and systems. It first plan and then establish program. It motivates employee through financial incentives. Consultants analyze and shape problem. GE under J. Welsh ; IBM under L. Gerstner has adopted this theory during merger and acquisition. In this theory, consultant support management in shaping their own solutions. Microsoft , Intel , 3 M , Merck , Schwab has adopted this theory in many of the acquisitions. Companies should follow the below mentioned strategies during merger and acquisition First step should be setting up of project team comprising of senior executives from both the organization.

It is advisable they communicate employees early, immediately. They can do it using webcast, intranet or group meetings. Informing all the employees at the same time will minimize the potential for gossip and spread of misinformation. They should make employees realize the benefits of this marriage. After the announcement of merger, Cisco always has its executive owner present and involved.

Senior executive in both the organization should create goals, values, vision and policies of the new company. It should be clearly communicated to the organization. She received the award of excellence in Non profit Leadership Award on 10 th May, and in the interview she said that her mantra of success was clear vision and the communication of this vision to the employees.

Culture difference was largely responsible for the downfall of merger between Chrysler and Daimler.

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Daimler and Chrysler employees have different views on important things like travel expenses and pay scale; even they have a different approach towards life; Daimler favoured a more formal and structured style while Chrysler favoured a more relaxed and freewheeling style. This cultural conflict played a big role in the failure of merger of Daimler and Chrysler.

So Leaders should be able to inspire people to come out from their comfort zone and accustomed norms and accept the new ones. And to achieve this, leader must be in constant touch of the employees. Spending time with them, knowing more about them, what irritates them, what excites them will help leader in making people accept the new culture. Building trust is integral to building knowledge. As trade union membership has declined mergers have been prominent features in strategies of union revival. Yet, there is little empirical research into the effects of mergers on the unions actually merging or on their impact on the wider union movement.

Dr Undy concludes that mergers do not provide a solution to the problem of falling membership and that transfers of engagements are often more successful than amalgamations. Gennard, J. Emerald Group Publishing Limited. Please share your general feedback.