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MN5131 HRM in International Mergers and Acquisitions

MN5131 HRM in International Mergers and Acquisitions.

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MN5131 HRM in International Mergers and Acquisitions

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  1. MN5131HRM in International Mergers and Acquisitions

  2. 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

  3. 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?

  4. 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

  5. ChinaRecent trends growth of FDI (M&As, 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 M&As / WFOEs) shift in R&D investments (from the ‘triad’ to China)Getting into China complex local ‘rules of the game’ role of intermediaries influence of central, regional & local government

  6. 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

  7. International MergersMajor HR issuesOutcomes depend on context / rationaleCorporate transformation through M&AsPoor performance of mergersPressures to integrate – “home country effects”Legacy of distinct national systems - “host country effects”The search for balance – “merger of equals”The political dimension to M&AsRole of the HR function

  8. HRs Contribution to International M&As8 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

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