There is ample literature that addresses organizational ...



SAMPLE – Journal Article Review

What follows is a sample of a Journal Article Review, which was written as part of a Learning Quest by a student who was exploring HR strategies used to ensure successful mergers and acquisitions. The student was also working full time at a Healthcare system that was going through a merger. Therefore, she focused her paper on the merger in her own organization. With the students permission, you can review this section of her paper, giving you an idea of how an effective journal article review is written. In order to maintain confidentiality, the names of the Healthcare system and the organization it merged with, have been changed.

There are ample journal articles that address organizational mergers and acquisitions, and the HR aspects that need to be addressed during a merger. The articles revealed several topics relevant to the ABC Health System and the ABC Student Health Center integration: (a) understanding the role of HR, (b) the merger process, (c) functional HR issues, (d) human relations issues, and (e) key components needed in a communication plan.

Role of HR. A merger provides HR professionals an opportunity to be a strategic partner and to directly influence the creation of a new organization (Ulrich, Cody, LaFasto, & Rucci, 1989). The role of HR at ABC Health System involves both functional processes, such as creation and maintenance of employee records, payroll, and benefits administration; and strategic business aspects, such as organizational culture, employee retention, and leadership development. Creating a successful merger between ABC Health System and the ABC Student Health Center required skills in both functional and strategic aspects of HR.

It is vital that organizations do not neglect the importance of the HR aspects during a merger. One-third to a half of merger failures are due to HR problems (Vinten, 1993). Human resources problems include the employee concerns stemming from the merger, “specific anxieties include diminished job security, reductions in benefits, and reduced opportunities for promotion” (Vinten, 1993, p. 48). Because of the potential for failure of a merger due to HR problems, it is important for HR professionals to become involved in any merger early on in the process. Understanding the HR problems that can occur during a merger and developing actions to address those problems will be important to the success of the merger.

Merger process. Ivancevich, Schweiger, and Power (1987) discuss the stages of the merger process and outline some employee concerns that arise during each stage, as well as some recommended HR interventions. Table 1 provides a summary the merger process and a description of each stage.

|Table 1 |

|Stages of the Merger Process |

|Stage |Description |

|Planning period |The first stage consists of the examination of a possible merger, acquisition or divestiture. |

| |Planning is usually attempted in secrecy, although rumors frequently occur. Rumors of job loss are |

| |a key stressor during the planning period. |

|In-play period |The second stage is the point at which a company has been formally approached by or has approached |

| |potential partners. Employee stress is created by job insecurity and possible organizational |

| |changes. |

|Transition period |The closing of a merger or sale of a company marks the third stage. The merger partner is now |

| |apparent. Employee uncertainties focus around the types of changes that will be made. |

|Stabilization period |The final stage in the merger process occurs when the transition is complete and the companies are |

| |smoothly functioning. Employee stress results from job insecurity, unforeseen changes, and lack of |

| |communication. |

Note. Information compiled from “Strategies for Managing Human Resources During Mergers and Acquisitions,” by J. M. Ivancevich, D. M. Schweiger, and F. R. Power, 1987, Human Resource Planning.

Ivancevich, et al. (1987) described HR interventions recommended for each of the first three stages of the merger process. At the point this action research project commenced, ABC Health System and the ABC Student Health Center were in stage three, the transition period of the merger process. Therefore, this literature review focuses on the HR interventions recommended for the transition period. According to Ivancevich, et al., “a potentially valuable intervention during the transition period is the creation of a team to plan the transition to a new firm” (p. 29). This team can help direct decisions, activities, and communication that are needed. The collaborative team approach fits well with the steps associated with the action research model used for this project. Action research involves members of the organization to participate in collecting data and developing actions throughout the project. The steps of the action research model are further described in the Method section of this paper.

The second intervention recommended by Ivancevich, et al. (1987) during the transition stage is the formulation of a communication plan. Ivancevich, et al. contend “in the development and implementation of a communication plan, the image and intentions of the acquirer as perceived by employees is very critical” (p. 30). The communication plan for the ABC Health System and ABC Student Health Center integration should address employee concerns such as reasons for the merger, information about the acquiring company, changes to the organizational structure, and changes in benefits and compensation.

Functional HR issues. There are numerous HR issues encountered during a merger (Dolan and Weil, 1998). Specific functional HR aspects consist of (a) an assessment of the two organizations HR policies and processes to determine their similarities and differences, (b) completion of a job analysis and wage and salary administration analysis in order to identify where positions will fall within the company’s compensation program, (c) a comparison of employee benefits and costs in order to identify the potential financial impact it will have on the employee and the organization, and (d) the coordination and subsequent incorporation of employee personnel records into the HR and payroll systems. All of these functions must be completed prior to the go-live date. See Appendix A for a detailed list of functional HR items that should be assessed during a merger.

Human relations issues. In addition to the functional aspects of HR, the HR professional must also be aware of the human relations issues involved in a merger. Ivancevich, et al. (1987) maintain that typical questions on the minds of employees who are impacted by a merger include: Do I have a job? What kind of benefits will I have? Will I have a new boss? What kind of company will I be working for? These are the same questions on the minds of the ABC Student Health Center employees; this action research project must take into account how to address these questions and other human relations issues such as the cultural aspects.

The culture of an organization is an important part of the human relations issues encountered during a merger. Cummings and Worley (2005) define culture as:

The pattern of artifacts, norms, values, and basic assumptions about how to solve problems that works well enough to be taught to others. Culture is a process of social learning; it is the outcome of prior choices about and experiences with strategy and organization design. It is also a foundation for change that can either facilitate or hinder organization transformation. (p. 484).

The merging of two organizations requires the merging of two organizational cultures. Companies that have similar cultures are most likely to experience a successful merger (Pomeroy, 2005).

Collective employee negativity and resistance to a merger can be viewed from a cultural perspective. Negativity can lead to an “us versus them” attitude, and can generate hostility and distrust (Larsson & Finkelstein, 1999). Even though culture is such an important aspect to the success of a merger, almost three out of five merging companies do not adequately plan for the cultural integration of the two organizations (Walt, 2005). Given this, it is imperative that the human relations issues involving organization culture are addressed as part of the merger process between ABC Health System and the ABC Student Health Center. While both organizations have a similar focus of providing health care, it is possible that the two organizations may have differing cultures. If the cultures are vastly different, it is more likely that there will be human relations problems encountered during the merger.

Communication plan. Companies that have gone through a merger have learned that communication is the most critical aspect for helping employees get through the merger process by maintaining a positive outlook and an effective workplace environment (Newman, 1999). One way employees perceive the integrity of the organization is through its communications. Employees should be provided accurate and timely information about what is happening in order to avoid having employees get their information from newspapers or external sources (Ivancevich, et al., 1987). If employees do not get accurate and timely information from the organization, they will develop a negative outlook about the organization and the merger. See Appendix B for a detailed list of informational items that should be included as part of the communication plan and shared with employees.

The communication plan for ABC Health System and the ABC Student Health Center should keep in mind all of the items referenced in Appendix B. Employees will want to know the background and reasons for the merger as well as how the merger will impact each of them. Providing ongoing updates throughout the transition phase of the merger, allowing employees to ask questions, and getting timely responses will set an important foundation for the success of the merger.

The journal article review provides valuable information for leaders and employees of organizations that are going through the merger process. Understanding the HR aspects of a merger, including the role of HR, functional HR issues, and employee relations issues can play a key role in the overall successful implementation of a merger.

References

Bridges, W. (1980). Transitions: Making sense of life’s changes. Reading, MA: Addison-Wesley Publishing Company.

Cummings, T. G., & Worley, C. G. (2005) Organization development and change (8th ed.). Mason, OH: South-Western College Publishing.

Darling, H. (2005, May). Healthcare cost crisis and quality gap. Healthcare Financial Management, 59(5), 64-68. Retrieved October 1, 2005, from Business Source Premier database.

Dolan, R., & Weil, T. P. (1998, March/April). Mergers: Enhancing human resources management. Physician Executive, 24(2), 12-18. Retrieved September 6, 2005, from Business Source Premier database.

Ivancevich, J. M., Schweiger, D. M., & Power, F. R. (1987). Strategies for managing human resources during mergers and acquisitions. Human Resource Planning, 10(1), 19-35. Retrieved September 6, 2005, from Business Source Premier database.

Krell, E. (2001, May). Merging corporate cultures. Training, 38(5), 68-74. Retrieved December 26, 2005, from Business Source Premier database.

Larsson, R., & Finkelstein, S. (1999, January/February). Integrating strategic, organizational and human resource perspectives on mergers and acquisitions: A case survey of synergy realization. Organization Science: A Journal of the Institute of Management Sciences, 10(1), 1-26. Retrieved September 6, 2005, from Business Source Premier database.

Mermigas, D. (1996, November 18). Author warns moguls to mend culture clash. Electronic Media, 15(47), 22-23. Retrieved December 26, 2005, from Business Source Premier database.

Newman, L. A. (1999, June). Hospital system learns to make people, not technology, first priority in merger. Clinical Data Management, 6(3), 1-2. Retrieved September 6, 2005, from Business Source Premier database.

Pearce, J. A., II, Robinson, R. B., Jr., & Sandberg, M. E. (1989). Change and organization development. In J. A. Pearce & R. B. Robinson, Jr. (Eds.), Management (pp. 386-390). New York: Random House.

Pomeroy, A. (2005, June). Orchestrating a mega-merger. HR Magazine, 50(6), 58-59. Retrieved September 6, 2005, from Business Source Premier database.

Romano, M. (2005, July 18). Malpractice not the issue. Modern Healthcare, 35(28), 8-9. Retrieved October 1, 2005, from Business Source Premier database.

Simmons, J. C. (2005, May). Creating competition and accountability in a changing healthcare environment. The Quality Letter for Healthcare Leaders, 17(5), 2-6. Retrieved October 1, 2005, from Business Source Premier database.

Ulrich, D., Cody, T., LaFasto, F., & Rucci, T. (1989) Human resources at Baxter healthcare corporation merger: A strategic partner role. Human resource planning, 12(2), 87-103. Retrieved September 6, 2005, from Business Source Premier database.

Vinten, G. (1993). Employee relations in mergers and acquisitions. Employee Relations, 15(4), 47-64. Retrieved September 6, 2005, from Business Source Premier database.

Walt, S. J. (2005, March). Looking beyond the obvious in merger integration, Mergers & Acquisitions: The Dealermaker's Journal, 40(3), 41-46. Retrieved September 6, 2005, from Business Source Premier database.

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