Question:
A decision has been made to merge two local businesses. They are both retail stores, one selling ladies’ fashion and one selling men’s fashion. Both of them are small, and based in one location in the same town. They have been struggling to survive, and it is hoped that they will have more strength once they have merged. There will be around 50 employees when they have merged.
You have been engaged as a consultant to help them plan the new merged business. You are meeting with your manager later today to explain how you are going to approach the first meeting that you have arranged with the owners of the two businesses.
You need to prepare for that meeting, and hence you need to write a 1000 word report. In that report you need to explain the following:
- How you will identify the external factors that are impacting on the businesses and why you will use this approach
- How you think that the HR function should be supporting the businesses at this time of change
- How the organisation should develop a strategy, and why it is important to do so
- The ethical issues that need to be considered
Answer/Solution:
Identifying External Factors Affecting Businesses
The rationale for identifying the external factors affecting business is informed by the fact that every business organization interacts and transacts with its environment (Lindner & Wald, 2011). This is since the environment has a direct relationship with the organization. The success of the merger of the two business would be determined by their success and effectiveness in their interactions with external factors. According to Jurevicius (2013), the external factors that normally influence the success of any business include economic, social, legal, technological and political factors. For the two businesses, these factors would affect their operations directly or indirectly.
The analysis tool that I would use in the evaluation of the external factors is the PESTEL analysis tool. This tool focuses on six critical factors which influence a business success which are politics, economic, sociocultural, technological, legal, and environmental factors (Gillespie, 2007). All these factors are external and have a direct influence on the success or failure of the business. It is not possible to change the local and global polities, the global economy, behaviours in the society, technology development, local laws and the environmental factors. Moreover, to compare the external and internal factors characterizing the merging process of both companies, a SWOT analysis would also be used. The rationale for using this tool is informed by the fact that it is comprised of two internal variables (strengths and weaknesses) and two external variables (opportunities and threats). Opportunities exist in a random fashion without a necessity of altering their timing or frequency.
HR Function Role in Change HR function is involved in handling multiple functions which include labour law provisions, record keeping, hiring and training, compensation and handling specific performance issues (Farndale et al., 2010). Irrespective of whether a company is a purchaser or target in a merger or acquisition,………………………………………………………………………………………………………..Please contact us to receive a guidance on the entire assessment
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