Oracle & Its Acquisition

Oracle & Its Acquisition Presented By Tim Earnshaw Radu Stoian Chandra Subramanian Basil Thom John Tintor

Agenda Background on Oracle & Peoplesoft Lewin’s Force Field Analysis Bolman & Deal – Four Frames Bridges Recommendations Q&A

Background Peoplesoft approves new offer from Oracle for $*** Peoplesoft filed a lawsuit against Oracle claiming unfair trade practices Peoplesoft formally rejects Oracle’s bid SAP starts new campaign targeting Oracle and Peoplesoft customers Dec 2004 Oracle offers $5.1 billion for Peoplesoft Peoplesoft finalizes purchase of JD Edwards 18-month of fighting and legal rankling June 13, 2003 June 12, 2003 June 11, 2003 June 06, 2003 June 02, 2003

Lewin’s Force Field Analysis Driving Forces Restraining Forces • Peoplesoft stakeholders • executives • employees • customers • shareholders • Peoplesoft culture change resistance • Peoplesoft communications • decreased customer spending • mature market • large dominant competitors • market share consolidation • aggressive “win” culture • operations efficiencies

Question 1- Lewin’s Model Is forcing customers to switch to new software (Oracle) good for facilitating change? A)Yes B) No

Bolman & Deal – Structural Frame ORACLE PEOPLESOFT • collaborative • people oriented approach • employees belong to “Peoplesoft’s family” • hierarchical • cut Throat Competition • survival of the fittest

Question 2- Structural Frame • When integrating the two sets of employees after the merger has been finalised, would you : • See it is simply a matter of moving offices and training them to answer the phone saying the new company name rather than the old one? After all, what’s the big fuss? • Acknowledge that the acquired employees need time to transition and will need formal counselling and integration training to bring them into the fold?

Bolman & Deal – Symbolic Frame • resignation of 7 Peoplesoft board members before the take over • termination package sent to 5,000 employees after the acquisition was completed • no guarantee or official news release to Peoplesoft customers on software support • in one of his interviews after the takeover Ellison’s claims there are no differences in culture between the two companies

Question 3- Symbolic Frame • How long should the Peoplesoft CEO be retained following the merger? • Short-term - < 3 months • Medium-term - <6 months • Long-term - > 6 months

Bolman & Deal – Political Frame • Ellison and his megalomaniac pursuit of Peoplesoft • Ellison’s desire to crush his former protégé, Conway. Re-appointment of Duffield to defend the takeover. • Public mud-slugging - Oracle seen as the “common enemy” at Peoplesoft, putting aside their own differences

Question 4- Political Frame • When pursuing a take-over target should you: • Publicly state that you are only interested in their customers, and plan to fire most of their people once you have control? • Be highly complimentary about the targets products and people and reassure them of your best intentions?

Bolman & Deal – Human Resource Frame • termination of around 5,000 employees with almost two-thirds belonging to Peoplesoft • Duffield’s resignation on the formal announcement of the takeover by Oracle

Question 5- Human resource frame • Post-merger, when dealing with associated lay-offs it is widely considered best-practice to minimize uncertainty by acting quickly. Do you: • Announce to the press first that the action is being taken this weekend, then send out a DHL courier to each affected person with an envelope containing their pink slip? • Individually speak to the affected people, assure them of the company’s support during a difficult time, and put support mechanisms in place?

January 14, 2005

Bridges • currently the merged organization is undertaking Project Fusion • a $546M three year change effort targeted at aligning business operations, integrating the two company IT systems and software product code at the application, middleware and database level • no compassion for Peoplesoft employees currently fighting in the neutral zone • risks range from possible lawsuits from Peoplesoft customers, potential departure of large numbers of former Peoplesoft employees to going over allocated budget

Bridges (Contd.) • SAP designed a ‘Safe Passage’ program targeted at Peoplesoft customers • the workforce is squeezed between several powerful forces: • Oracle’s CEO determination to make more strategic acquisitions • increased competitive pressure from SAP • change itself - while working on merging the two companies and on integrating complex software code

Summary of Mistakes Made • Pitfalls in Oracle’s acquisition and integration of Peoplesoft • bitter and public wrangling that was disrespectful of Peoplesoft • termination of 5,000 employees via mail • no defined communication plan for staff and clients • lack of recognition by Oracle executives of the cultural differences within the two organizations

Recommendations What would we have done as change agents ? • articulate a vision for the new entity followed by a detailed implementation roadmap • express a commitment to the values expected from Peoplesoft – superb service and leading edge products • create a transition team comprising executives from Oracle and retained executives from Peoplesoft • create a website with specific Q&A about the merger • send personalized e-mail/mail to Peoplesoft employees

Recommendations (Contd.) • Mend fences • acknowledge 18 months of wrangling was unfortunate • Employee terminations • establish a transition support program for affected employees that is consistent with Peoplesoft cultural values • Manage cultural differences • plan an awareness building conference to educate Oracle executives that there are cultural differences that must be managed

Q & A

Oracle & Its Acquisition