Unit 3

HRM in cross border mergers and acquisitions

In today’s increasingly complicated and globalized economic climate, Mergers and Acquisitions (M&A) have
replaced organic development as the primary means of expansion for many companies. The term “cross-border
merger” refers to a partnership between an Indian and a foreign firm. Only mergers with Indian companies were
permitted in India. After the Companies Act, 2013 was passed, outbound mergers were authorized with some
limits. The Companies Amendment Act, 2017, was pivotal for the legal basis for international mergers. For
international mergers, the Reserve Bank of India released proposed rules in 2017. In response, the Foreign
Exchange Management (Cross-Border Merger) Regulations, 2018, were drafted. New restrictions have eased
business in India, helping companies diversify, reform, and consolidate their businesses. It opened new
international markets for Indian businesses. While the reasons for most mergers and acquisition failures are
primarily financial, a large number of deals also fail due to poor human resources management, including issues
such as incompatible work cultures, different management styles, lack of motivation, attrition, want of
communication, trust issues within teams and uncertainty of long-term goals. This article explores the human
resources management aspect of Mergers and Acquisitions and delves into its importance and role, as well as
talks about the various strategies a human resource manager can adopt during Mergers and Acquisitions.
Finally, the article also looks at the main challenges faced by human resource managers with respect to Mergers
and Acquisitions. 

Importance of human resource management in mergers & acquisitions

The term human resource management (HRM) is used to describe an organization’s systematic efforts to shape
the actions of its employees. Managing human resources is a crucial strategic challenge for all firms, but
especially so for those engaged in cross-border Mergers and Acquisitions, since employee behaviour has a
significant impact on profitability, customer satisfaction, and other essential metrics of organizational success.
Human resource management encompasses a wide range of actions any company takes, no matter how big or
small. Both strategic plans and routine procedures for supervising employees are part of human resource
management. All organizations need to have policies in place that lay out the ground rules for managing
employees. Mergers and acquisitions are recognized as significant factor that affects talent management
strategies. Talent management is all about finding, keeping, inspiring, and rewarding a company’s most talented
managers so that they can keep up their competitive edge. Human resource management may benefit Mergers
and Acquisitions by using talent management initiatives. Retention is a crucial aspect of M&A human resource
management. Once the company’s leadership has been established, HR professionals should begin working on a
plan to keep its most valuable employees from leaving. Many top employees of an acquired organization leave
during the acquisition transition because their status is diminished in comparison to the competitors of the
acquiring company.

Training in international management

International training and management development are always closely associated in the management literature.
Gregerson et al. (1998) proposed four strategies for developing global managers: international travel; the
formation of diversified teams; international assignments and training.

These four strategies relate to expatriation management, particularly integrating international training and
management development. Training aims to improve current work skills and behavior, whereas development
aims to increase abilities in relation to some future position or job, usually a managerial one (Dowling et al.,
1999, p. 155). A truly global manager needs a set of context-specific abilities, such as industry-specific
knowledge, and a core of certain characteristics, such as cultural sensitivity, ability to handle responsibility,
ability to

Develop subordinates and ability to exhibit and demonstrate (Baumgarten, 1992). These characteristics and
skills are considered as important international competencies and all can be developed through effective
international training and management development. International training refers to training for international
assignments.

According to Bartlett and Ghoshal (2000), global firms can enhance their inter-unit linkages by creating a pool
of global managers from anywhere in the world. Management development in MNEs is the “glue” bonding
together otherwise loose and separate entities.

   Indirect costs may be considerable and un-quantified, such as damaging relations with the host country
government and other local organizations and customers, as well as loss of market share, damage to corporate
reputation and lost business opportunities. The literature indicates that expatriate failure is a persistent and
recurring problem and failure rates remain high.

International management development can also be expected to play a central role in MNEs because of its
importance in developing a cross-national corporate culture and integrating international operations.

Training Strategies
 There is absolutely no substitute for on-the-job training. With that being said, though, it’s also important to remember
that not all on-the-job training works. To be effective, the process of training employees while they’re actively
performing their jobs must be part of your overall learning management strategy. It’s not enough to just show an
employee a new task and walk away. For training on-the-job that really sticks, use these strategies:

 Mentoring

Organizations that value the collective knowledge base of their workforce have a solid mentoring program.
Mentors don’t necessarily need to be an employee’s direct supervisor. Often, a more experienced employee who
is on a strong career progression track makes a great mentor. The strategy of mentoring focuses on growing an
employee’s overall skill set, fostering a positive attitude, and setting the employee up for success in general, not
with just a specific task.

 Coaching

While mentoring takes more of a big picture approach, coaching is much more specific. The role of a coach is to
ensure employees have the information, skills, and support they need to complete a task or set of tasks.
Effective coaches observe employees as they’re working and give continual feedback to help them improve.
Coaches keep their eyes on overall goals, watching how individuals affect the success of the entire team and
making adjustments as they go.

 Job Shadowing

There are elements of both mentoring and coaching for employees who are put in the role of having another
employee shadow them. In addition to teaching valuable job skills, this strategy can promote the culture of the
company and foster teamwork. One word of caution, though: pick the right employees to be shadowed. If
you’re not sure, shadow a person yourself before you have new employees follow along.
  Career Development

You may not think of promotions as a form of training, but they are. When you have a strong career progression
program, you’re encouraging your employees to pursue on-the-job opportunities and excel as mentors and
trainers themselves.

 Solid Follow-up

Training is never a set-it-and-forget-it proposition. Any effective training requires assessment and follow-up. As
a manager of learning, trainers have a responsibility to track on-the-job training efforts and record them as part
of an employee’s overall training plan. A good online learning management system allows trainers to integrate
on-the-job-training with their online courses that include manager sign-offs and tracking.

Expatriate Training

Expatriate is a term used to describe an employee who is temporarily or permanently assigned to work in a
foreign country. Expatriates may be assigned to work in a foreign country by their company, or they may be
sent to work in a foreign country by their government. Expatriates may be assigned to work in a foreign country
for a variety of reasons, including to gain experience working in a foreign country, to learn a new language, or
to gain knowledge about a foreign culture.

There are many benefits of expatriate assignments for both the employee and the employer. For the employee,
expatriate assignments can offer opportunities for growth and development, as well as new and exciting
experiences. They can also provide a chance to learn about a new culture and to improve foreign language
skills. Additionally, expatriate assignments can offer a higher salary and a variety of benefits, such as tax breaks
and allowances.

1. Establish a clear purpose for the program. Before creating an expatriate program, it is important to
establish a clear purpose for it. What are the company's goals for the program? What do they hope to
achieve by sending employees abroad?

2. Define the target audience. Who will the program be aimed at? Is it for senior executives only, or will it
also include lower-level employees? Defining the target audience will help to determine the specific
criteria that employees must meet in order to be eligible for the program.

3. Establish eligibility criteria. In order to be eligible for an expatriate program, employees must meet
certain criteria. Establishing clear eligibility criteria will help to ensure that only the most qualified
employees are chosen for the program.

4. Design a comprehensive selection process. The selection process for an expatriate program should be
comprehensive and rigorous. It should include a review of the candidates' skills and experience, as well
as their personal and professional goals.

5. Create a comprehensive training program. Once employees have been selected for an expatriate
program, they need to be properly trained for their new role. The training program should include
information on the company's culture and business practices, as well as on the specific country where
the employee will be working.
Types of Training in HRM
Everything you need to know about types of training in HRM. Training is the systematic process of enhancing
the job related skills, attitude and knowledge of personnel.

Training enables employees to develop and rise within the organisation, increase their market value. Basically,
the top management is responsible for training of employees in the organisation.

The commitment of top management is an essential qualification of training programmes because it involves in
framing training policy.

Training of the employees is possible if they believe that the resulting modification in the behaviour is in their
own interest and they can perform their job in a better way after attending the particular training programme
because learning is a self-activity and employee development is self-development.

The various types of training imparted to the employees in an organisation are as follows:-

1. Induction Training 2. Job Training 3. Crafts Training 4. Promotional Training 5. On-the-Job Training
6. Vestibule Training 7. Apprentice Training 8. External or Internal Training and 9. Refresher Training.