Introduction
organizational change has been a popular topic of discussion in management research for several years. This is because any organizational change is difficult for both the management and employees, and can lead to drastic consequences if not planned and implemented correctly. The implementation of organizational change requires consistent efforts of the management, particularly with regards to communication and employee motivation. Mergers are among the most problematic types of organizational change because they usually involve a clash of two separate cultures, leading to goal confusion, resistance, and communication issues. Understanding the primary concepts in organizational theory, as well as the nature of mergers and their effect on various organizational components can help to predict the impact of mergers on organizational and their employees. The present paper will seek to discuss how a departmental merge between two governmental entities may impact the productivity of employees while creating loopholes in communication. The key concepts that will be covered in the paper include the causes of mergers, changes to the working environment, communication, hierarchy, leadership styles, employee resistance, productivity, performance, employee satisfaction, measures of mergers and strategies for overcoming challenges and fostering teamwork.
The paper will make a valuable contribution to the study of management in the public sector in three ways. First of all, the paper will discuss the theoretical concepts and factors affecting the functioning of any organization, including the ones operating in the public sector. Secondly, the paper will examine the influence of a departmental merger on each area of organizational functioning, thus identifying potential consequences and issues for the management. Lastly, the work will suggest strategies that might assist the leaders of both departments in measuring the merger and promoting teamwork among all employees in the chosen scenario.
Background
In order to introduce the subject, it is essential to define and explain the organizational change, mergers, and associated concepts. organizational change is the foundational process in the chosen scenario because a merger is a type of change that business entities may undergo. organizational change is defined as “the process by which organizations move from their current or present state to some desired future state to increase their effectiveness”. Hence, there are two main goals of organizational change: to make the use of resources more efficient and to achieve higher corporate value. There are many types of organizational change that may help companies to improve efficiency and productivity, which concern one or more of the following components: structure, roles and responsibilities, operations and culture. For example, introducing innovation would likely influence processes, roles and responsibilities, whereas a culture-focused change could also encompass structure and role shifts.
A merger is a type of formal organizational change when two or more entities combine and become one. As noted by Jones, mergers usually occur between two codependent organizations that would benefit from uniting resources, strategies, and workforces. Mergers are also among the most complex changes that could happen in an organization because they require substantial resources and adjustment, and many companies simply fail to overcome cultural differences. In order for a merger to be successful, managers need to understand three main factors that influence this type of change: decision-making processes, power games, and organizational culture.
Firstly, organizational culture refers to “the common and shared values that help shape employee behavior and are typically passed down from current to future employees”. organizational culture helps to ensure that all employees have comparable work ethics, goals, and views on the organization’s future. This, in turn, helps to foster positive attitudes, leadership, motivation, knowledge sharing, and other aspects crucial to successful functioning. A healthy organizational culture also helps to increase employee commitment, thus preventing talents from leaving the company and supporting lifelong employment. These features of corporate culture make it critical to the study of mergers. When two or more entities combine into one, there is a clash between two cultures. This can have a significant influence on the success of a merger if differences in attitudes, morale, goals and motivation prevent employees from collaborating effectively.
Decision-making processes also have a substantial effect on mergers because managers are required to make a large number of informed decisions as quickly as possible to ensure smooth implementation. Mintzberg discusses decision-making processes in organizations in great depth, arguing that there are different types of decision-making processes that take place in an organization. Rational decision-making is believed to be the best option, although it is very uncommon in most business settings because it is time-consuming and requires a lot of information. Insight-based decision-making is much more common, and it occurs when a person suddenly comes up with an innovative decision after poking around different options and alternatives. These decisions are born out of seeing the problem and its context clearly and require preparation and contemplation. The third approach is action-based, and it is usually applied in situations when there are no good options or time to make an informed decision. During a significant organizational change, leaders are required to use all three decision-making approaches in order to ensure success. Hence, it is crucial for them to have an in-depth understanding of processes that occur in the workforce, the changes associated with a merger, and the potential repercussions of various decisions.
Power games are part of the organizational context relevant to mergers because they reflect who has an influence on the implementation process, decisions, and their outcomes. Mintzberg examines organizations in terms of five essential parts: the operating core, which has the largest number of employees performing day-to-day operations, the middle line, which includes mid-level managers and supervisors, the strategic apex, support staff, and the technostructure. The two components that hold the most significant power in an organization are the strategic apex and the operating core. The former holds power due to its position and decision-making capacity since the top management is usually responsible for developing strategic plans and policies. However, the latter is nonetheless vital because workers in the operating core are responsible for products and services that the organization provides to customers. Therefore, if managers do not address the needs of employees in the operating core during a merger, the change process will fail, and the organization will face significant risks that might threaten its existence and profitability.
The Causes of Merging
Because mergers occur under many different circumstances, it is hard to identify one leading cause of mergers. Instead, there are usually several factors at play when mergers occur, including economic and political. These factors shaped the so-called waves of mergers – periods when mergers were particularly common in large economies, such as the United States. The first wave of mergers can be traced back to the late 1890s when the spread of industrial production created opportunities for businesses to enhance the scope of production. In this context, there were many new opportunities for creating monopolies by merging companies across states. Hence, the first potential cause of mergers is the need to establish an organization’s power in a particular economy. In the case of public sector organizations, this translates into the need to establish oversight over services provided to populations. For instance, if two universities merge, the organization gains the capacity to provide education services to more people, thus improving quality control and enhancing compliance.
The second wave of mergers came in the late 1910s, shortly after the end of the First World War. It was a direct response to the first wave of mergers that sought to create monopolies in various markets. As a result, smaller organizations which survived the first wave started merging in order to promote oligopoly, the condition of the market where a limited number of players engage in the competition. An oligopoly is similar to a monopoly in a sense that competition is limited, but instead of a single dominant player, the market is populated by several large ones. This improves the potential of industries to grow and develop because it reduces the reliance on a single market player. Hence, the second cause of merging is the need to establish a balance of power in the market, particularly in response to monopolistic changes. When applied to the public sector, this means increasing the capacity of institutions or organizations providing services, thus offering more variety to the public. It also helps official entities to divide resources and responsibilities rather than relying on a single institution to provide all services.
The third wave of mergers started in the 1960s when the U.S. economy has recovered from the Second World War and began to develop again. During this period, new opportunities for businesses arose along with new markets and products, and thus, many companies seized the opportunity to diversity. For instance, a large banking company could merge with smaller companies in other industries to expand its portfolio. This resulted in the formation of conglomerates, which were believed to have a positive impact on economic development. Therefore, the third cause of mergers is the development of new markets and the resulting desire of organizations to diversify their revenue streams. In the public sector, there is also a great variety of services provided to citizens. When two public sector companies merge, it could be because one of them was willing to improve its services portfolio by gaining knowledge and resources from an organization operating in a different sector. This is particularly true with large governmental organizations that take over or merge with smaller ones for the purpose of service diversification.
The fourth and fifth waves of mergers occurred between the 1980s and 2000s. Although they were similar in their causes, the nature of mergers during these two waves was very different. Yaghoubi et al. describe the fourth wave of mergers as hostile and rooted in financial leverage. This means that large companies that had more borrowing and refinancing capacity would take over smaller companies who relied on a limited but stable income. The primary cause of mergers, in these cases, was thus the lack of financial resources. The fifth wave was much more gentle on small and medium enterprises: “hostile takeovers were no longer needed, as companies voluntarily restructured and adopted a shareholder value perspective with prodding from time to time of institutional shareholders”. Hence, small and medium enterprises willingly accepted mergers to gain financing and support from corporations. Similarly to takeovers in the 1980s, these mergers were caused by the limitations in resources available to grow and develop the organization. Hence, the willingness to combine resources, including workforce, finances and knowledge, from two or more entities is the fourth principal cause of mergers. This trend is also prominent in the public sector, where organizations often lack funding or resources to function effectively. Merging two or more entities or departments allows balancing resources and responsibilities, thus improving efficiency and productivity.
Finally, the sixth wave of mergers happened between 2003 and 2008, before the global economic crisis started. As noted by Yaghoubi et al., the primary force that contributed to this wave was globalisation. At the beginning of the 21st century, improvements in technology, along with sociopolitical trends, provided numerous opportunities for businesses to expand their geographical reach. As more and more companies started realising these opportunities, the number of cross-border mergers and acquisitions rose suddenly. Such mergers enabled organizations to increase the target market dramatically, thus promising elevated profits. The physical location of entities is also relevant in the context of the public sector, where institutions often open branches to serve more citizens. In this case, mergers are caused by the entity’s need to reach new geographic regions and increase the serviced portion of the country’s population.
Based on the analysis above, a departmental merger between two governmental entities can be caused by a variety of factors. Firstly, it is possible that the two entities wish to increase the scope of their activity by monopolising the provision of services of a particular kind. This could have a beneficial effect on the quality of services provided, as the unification of standards would help to decrease quality variations and errors. Secondly, a merger could be triggered by the desire to diversity services and increase revenue in case the services are paid. Thirdly, it could be that on their own, the two entities lack the required resources to fulfil their functions well, and thus combining resources would help to improve service quality, too. This is probably the most likely scenario since governmental entities often experience a lack of resources, including human capital and funding. Finally, a merger could be related to geographical factors or the government’s decision to relieve one large entity off some of its duties by introducing more service providers.
Changes in the Work Environment
One of the critical factors that impact employees of organizations following a merger is the disruption of the regular work environment. As a lot of new employees, managers, and leaders come into the organization at once, it usually brings numerous interruptions into the group processes and dynamics that are already in place. The present section will seek to explain what constitutes the working environment and how a departmental merger in question might affect the status quo.
There are two primary aspects of the work environment that are critical to understanding the effects of mergers on it. Firstly, the work environment includes the physical organization of space at work. Hanaysha states that the physical work environment should always seek to make employees feel comfortable while at work; however, it also involves the accessibility and safety of a workplace. In other words, the physical environment should seek to fulfil employees’ basic needs while also making work more comfortable. For instance, a sufficient number of bathrooms and kitchens in the workplace meets employees’ most basic physiological needs. Similarly, in factories and construction companies, the availability of high-quality safety gear is required to grant security. However, other features of the physical environment can also influence how employees feel at work. These might include the presence of conference rooms for group discussions, the sufficiency of working space, the quality of computer screens in an office, and more. Spaces that are small, overcrowded, noisy and do not respond to employees’ needs are likely to evoke negative feelings and affect workers’ productivity.
The second aspect of the work environment is the psychological environment, which is much more complicated than the physical organization and has a similarly crucial impact on employees. The psychological environment involves several components, such as job characteristics, employee relations, and management style. Job characteristics reflect whether or not an employee’s duties and responsibilities evoke positive or negative associations. For example, many employees prefer when their tasks have sufficient variation, require creativity or problem-solving skills, and do not entail a significant amount of pressure. Employee relations refer to the overall organizational climate and the degree of friendliness among workers. A hostile working environment where conflicts are frequent and teamwork is almost nonexistent would be stressful for most people, thus making them anxious and unmotivated. Lastly, the management style means the strategies used by managers to distribute and explain tasks, establish oversight, and motivate employees. When managers do not explain responsibilities adequately and fail to provide support while asking too much of their workers, they contribute to a negative work environment. However, when managers are appreciative and supportive, and internal communication is clear and respectful, workers can benefit from a positive psychological environment. Maintaining the correct physical and psychological work environments requires consistent efforts from the management, which is why organizational changes can easily lead to disruptions.
Because there are two aspects of the working environment, there are also two ways in which a departmental merger can impact it. Firstly, a merger that involves moving new employees into an established workplace may cause changes in the physical working environment, thus causing discomfort. For example, if there are not enough offices for all staff members, the space can become noisy and overcrowded. This, in turn, leads to the disruption of work processes and the reduction of employee performance. The second mechanism is psychological and is associated with changes in management goals and approaches. Mergers are a difficult time for the management because there are many new tasks to be completed. Hence, employees might find themselves suffering from the lack of task clarity or support from managers. Relationships among employees may also suffer as a result of physical discomfort and new people joining the team, leading to an increased risk of conflicts and worse organizational climate.
These issues have a particularly strong effect on employees’ performance and motivation if they lack adaptability. Researchers note that adaptability is a crucial concern in change management because it assists in preventing issues associated with work environment disruptions. Cullen et al. define employee adaptability as the ability of workers to adjust to changes in the work environment, noting that “a flexible workforce allows the organization to meet changing performance requirements, adapt, and respond to workplace innovations”. Employees who adapt to changing circumstances quickly experience less discomfort during organizational change and are more inclined to maintaining positive attitudes and motivation, thus reducing the risk of performance decrease. Nevertheless, individual adaptability relies on a person’s qualities and characteristics rather than on the actions of the management. For instance, people who have a positive self-concept and high tolerance of uncertainty also have higher adaptability than those who do not. Identifying the source of maladaptive employees’ concerns and resolving them would thus benefit the outcomes of the merger.
Communication Means
Internal communication is a particularly challenging topic when it comes to organizational change because it involves a great variety of concepts that might impact how a specific change affects the workplace. For the purpose of this paper, two main aspects of communication will be discussed: communication means, also called channels, and communication styles. Both of these concepts may have a significant influence on the success of a merger.
Communication channels refer to the particular tools and behaviours that are used to convey information within the organization. The primary goal of internal communication means is to deliver information to the intended audience without gaps or delays. Modern workplaces usually rely on five key communication channels: face-to-face communication, telephone calls, videoconferences, e-mails, and employee portals. Each of these communication channels has strengths and weaknesses when considered in the chosen scenario.
Face-to-face communication is usually perceived as the best tool for organizational information exchange. This is because this channel is the most information-rich due to its interactivity, the presence of both verbal and nonverbal information, personal focus, and natural feel. Using face-to-face communication enables managers to provide the required information and receive feedback or questions immediately, thus preventing communication delays. However, this communication channel is impractical when applied to large organizations or messages because it is time-consuming. If a significant organizational change is planned, delivering information about it to each person through face-to-face communication is virtually impossible, and thus the increased reliance on this channel may affect how the manager fulfils other duties.
Telephone calls are similar in richness to face-to-face communication, except for the nonverbal component. This means that they also enable to reach an understanding faster and prevent delays, thus ensuring that the required information has been communicated to and understood by the intended audience. Nevertheless, telephone calls are only slightly less time-consuming than face-to-face communication, and thus are only practical when a short message needs to be delivered urgently. Videoconferences may address this issue by increasing the number of people who can receive the message. However, they also have a limited capacity and are usually used in specific circumstances, such as for communication between company branches in different locations or to facilitate teamwork.
E-mail communication has become particularly prominent in modern workplaces because it is easy, time-efficient, and free. Additionally, e-mails can fulfil an entire range of communicational tasks, such as sending documents and announcements, providing feedback, and assigning jobs or projects to employees. In many workplaces, e-mail communication has almost replaced other channels, such as face-to-face communication and phone calls. However, this channel has some crucial drawbacks that affect how it can be applied in organizational settings. For example, Men notes that electronic communication lacks information richness and connection, which creates a distance between employees and prevents the formation of interpersonal relationships. Moreover, when e-mails are used as the primary channel of information exchange, employees may get distracted by the sheer number of messages received, leading them to disregard some critical e-mails.
Finally, the use of employee portals has also become prominent, especially in large companies with significant amounts of documentation. These internal portals are designed to provide access to a variety of current information, including policies, guidelines, procedures, product data, earnings data, important announcements, and more. Some employee portals also have feedback functions that allow employees to submit complaints or questions that are later reviewed by the management. Employee portals are very efficient in terms of information exchange because they allow access to a large volume of information that can be filtered by an employee to find what they need. Consequently, employees no longer have to sort through hundreds of e-mails in order to locate an essential document, which improves their productivity and reduces distractions. Nevertheless, because the opportunity for interaction on such portals is minimal, they should not be used as the primary means of communication in an organization.
In established workplaces, managers have a well-designed communication system in place that dictates which channels are used for different types of information. For example, a manager might use face-to-face communication to discuss an employee’s progress, phone calls to assign urgent tasks, e-mails to provide feedback or request updates, and an employee portal to store basic organizational information. The use of various means of communication depends on a lot of factors specific to an organization or department, from internal policies to size and structure. Therefore, in the context of departmental mergers, there is a significant risk that the communication systems previously used in each unit will clash, leading to unwanted consequences. For example, an employee might be used to receiving only minor announcements through e-mail, whereas a new manager uses e-mails to send essential information. In this situation, the leaders of both departments have to come up with a new communication system that would function well in the merged environment.
The Levels of Hierarchy
The organizational structure is also a critical notion when it comes to mergers because they usually involve restructuring. It is defined as “the formal system of task and authority relationships that controls how people are to cooperate and use resources to achieve the organization’s goals”. The goal of a specific organizational structure is to shape the behaviour of people in the organization, thus facilitating oversight, productivity, and formal support. For this purpose, each organization is made up of several levels of hierarchy, from regular workers to the top management. There are two generally recognised types of organizational structure: tall and flat. Some organizations have a bloated structure, where the number of managers varies at each hierarchal level, but this rarely applies to individual departments, so this type of structure will not be discussed in the paper. Depending on whether the organizational structure in the departments that are planning a merger is tall or flat, the process might result in a variety of complications.
A flat organizational structure is characterised by a low number of levels of hierarchy. Depending on the size of the organization, the exact number of levels may vary. In a flat organizational structure, employees from all levels of hierarchy communicate with one another freely and often cooperate in projects or tasks. This helps to establish a healthy organizational climate and encourage knowledge sharing and communication. However, there are also some issues that might arise in a flat organization, such as the lack of accountability, interpersonal conflicts, and inadequate oversight. These problems occur due to the reduction of formal control and might have a particularly strong effect on performance in highly regulated industries, including public service. During a merger, flat organizational structures might experience a drop in performance due to limited oversight and confusion from undefined accountability. These issues could have a substantial effect on the outcomes of a merger, and thus need to be taken into account when planning for this type of change.
A tall organizational structure, on the contrary, includes a large number of levels of hierarchy. These organizations tend to be more formal, with a distinctive chain of command and increased oversight due to the high number of managers and supervisors. Tall organizations are particularly prevalent in manufacturing industries because they assist in quality and operations control. By design, tall organizations create some unique problems for the management due to their increased complexity. For example, Jones notes that most tall organizations experience difficulties in communication, leading to poor information exchange and reduced effectiveness. Issues and delays in decision-making are also common in tall organizational structures, and they might hurt operations, strategy, and performance. In addition to these concerns, tall organizations are also more prone to motivation loss and high bureaucratic costs. These problems may have a negative impact on the workforce, particularly during a merger. For instance, poor communication might lead to limited awareness, thus increasing the risk of negative attitudes to organizational change. Decision-making problems, in turn, create obstacles to adequate problem-solving and strategy formulation following a merger.
Problems associated with the responses of individual structure types to mergers are complemented by issues that arise from combining two structures. Firstly, if the two departments have different numbers of hierarchy levels, identifying the structure that the merged unit should take may be difficult. This is primarily due to the fact that the factors affecting decisions about the number of hierarchy levels required might still be in force, and thus both departments will have to make compromises and changes to ensure effective collaboration. Secondly, assigning employees to new levels of hierarchy may be challenging for both the management and the target workers. For example, if a merger involves reducing the number of hierarchy levels, some employees will have to be moved up or down from their current level. In the first case, they might experience difficulties adjusting to new tasks and responsibilities, which would impact their ability to adapt to the merger itself. In the latter case, employees might feel discouraged and unmotivated, leading to performance problems. Thirdly, there is also an issue of changing the chain of command and introducing new supervisors, managers, and leaders into the existing teams. The following section will talk about this challenge in more depth. Overall, experiencing the difficulties associated with different levels of hierarchy might affect the success of the merger through employee performance, motivation, accountability, and working climate.
Leadership Types
One of the most critical aspects of mergers is the change in leadership. In a regular workplace, leaders usually have similar leadership styles that work best with their employees. However, when two organizations or departments merge, both workplaces experience an influx of leaders with a different leadership style. In order to understand the potential challenges that arise in this situation, it is critical to understand how leadership styles differ from one another. There are five key dimensions that can be used to identify differences among leadership styles: communication style, decision-making, organizational support, motivation, and emphasis.
First of all, various leadership styles differ in terms of leaders’ communication patterns. In particular, the level of formality in communication can be seen as one of the primary factors allowing for a distinction between leadership styles. For instance, the transformational leadership style relies on the leader’s connection to employees and thus would have a higher share of informal communication than transactional leadership, where formal communication prevails. Similarly, formal communication is much less common in laissez-faire leadership than in autocratic workplaces. This means that, in case of a merger, employees could experience changes in communication style requiring adjustment. For workers used to informal communication, it might be challenging to allow for the power distance that characterises the more formal approaches, and vice versa. The discomfort experienced by both leaders and employees could lead to workplace tension, thus sabotaging the success of a merger.
Secondly, the nature of decision-making processes also varies a lot in different leadership approaches. Some leadership styles, such as transformational and democratic leadership, are based on employees’ active participation in decision-making. Other styles, on the contrary, rely on the decision-making authority of the leader and do not welcome employees’ input. For instance, in autocratic and transactional leadership, employees are expected to obey the decisions made by leaders instead of offering advice and feedback. Changes in decision-making patterns might be confusing for employees regardless of what approach they are used to, and this could lead to worsened strategic decision-making and working climate.
The third factor that enables distinguishing between different leadership style is the level of organizational support offered to employees. Employees who work with charismatic or democratic leaders are used to having a high level of support, which helps them to perform tasks more effectively and assists in career development. Workers who are used to laissez-faire or autocratic leadership, on the contrary, experience low levels of support and are often used to solving problems on their own. Reducing or increasing organizational support as a result of moving from one leadership style to another may be confusing or stressful for employees. Those who are not accustomed to organizational support could feel like their supervisors and managers are intrusive, whereas those who had support before might experience difficulties with performance and motivation.
Additionally, different leadership styles include varying approaches to motivating employees and maintaining high performance levels. For example, in transactional and autocratic leadership, motivation is achieved mainly through competitive salary and benefits. However, some other leadership styles, including transformational and charismatic leadership, are focused on aligning employees’ goals with those of the organization, thus inspiring workers to be more productive. In the first case, leaders achieve extrinsic motivation, whereas in the second case, workers develop an intrinsic desire to contribute to organizational success. For leaders, working with employees who are used to be motivated differently can be challenging, and they might struggle to achieve and maintain regular performance levels. For employees, the change can also be difficult, particularly if they lose the primary source of their motivation.
Finally, although the primary focus of each leader is to improve organizational performance and facilitate development, various leadership styles imply placing emphasis on different organizational variables. For instance, in transactional leadership, the focus is usually on specific performance metrics and outcomes, and the management will reward employees for achieving specific targets. Transformational or charismatic leaders emphasise developing the workforce by identifying employees’ talents and skills and inspiring workers to apply them. Ethical leadership places a significant emphasis on the moral repercussions of employees’ behaviours and actions and use rewards and behavioural modelling to build an ethical organizational culture. Shifting the focus may impact both leaders and employees while also causing disruptions in operations, strategy, and performance measurement.
Attitudes to Change
Employee’s reception of change is essential to address because it can lead to both positive and negative outcomes. If employees’ attitudes to change are negative, they experience rejection or fear towards the process, and would likely resist change, causing difficulties for the management. However, if employees’ attitudes are positive, they will assist the management in making the change process as smooth as possible, leading to better outcomes.
Resistance to change is a particularly prevalent topic in change management research because it has a number of possible adverse outcomes. Resistance to change is defined as “a tridimensional attitude towards change, which includes behavioural, affective and cognitive components”. Therefore, it encompasses what employees think, feel, and do in relation to the organizational change. Resistance to change may have a negative influence on employees’ organizational commitment, motivation, and performance. As a result, resistance to change proves to be an obstacle to the successful implementation of organizational change.
Shifting employees’ mindsets from resistance to openness to change has a beneficial effect on the outcomes. In order to do that, it is vital for leaders to understand the sources of resistance. Researchers explain that resistance to change is natural for people because change is stressful and requires resources. Additionally, resistance to change is often born out of uncertainty about the possible effects of the change and its impact on individuals in the organization. When employees are unsure whether or not the change will result in jobs cut, salaries reduced, or other harmful effects, they will naturally resist change. Another important reason for change resistance is disagreement about the problem. Umble and Umble explain that people tend to resist organizational change when they do not agree with the management on the issue, solution, or implementation. Getting employees to buy in requires achieving common ground on all of these matters, thus preventing negative attitudes to change. Based on these ideas, it is evident that communication, support from leaders, and decision-making involvement is crucial to facilitate change acceptance.
Employee Productivity
Maintaining high levels of employee productivity is vital to ensuring the success of any organizational change. However, structural changes, including mergers, often have an adverse effect on productivity. There are three key factors that could influence employee productivity following a merger: individual, managerial, and organizational. First of all, as discussed above, changes that are associated with restructuring often cause employees to experience stress and discomfort due to changes in physical and psychological working environments. If unaddressed by the management, these outcomes lead to a loss in organizational commitment and motivation, which are considered to be strong predictors of productivity. Additionally, researchers note that stress can also stem from the perceived lack of control over the change process. This is a particularly important factor in workplaces where employee participation in decision-making is low.
Secondly, on the managerial level, employee productivity is impacted by changes in management. On the one hand, managers may not provide enough support to individual employees, leading to poor apprehension of tasks and decreased productivity. This is because, during organizational change, the focus of managers is on change implementation and outcomes rather than on employee performance. On the other hand, managers that are new to the organization may use motivation and leadership strategies that employees are not used to, leading to role confusion and other adverse outcomes.
Lastly, on the organizational level, new working groups and changes in organizational structure also impact productivity. Karanja points out that structural organizational changes, such as mergers, involve systemic changes in policies, procedures, and strategies. Adjustment of work processes necessary to accommodate these changes often requires time, and thus, there may be drops in employee productivity in the first weeks or months following a merger. In a similar manner, new workplace and team structure has a negative impact on performance because employees may not be able to communicate and work together effectively with their new colleagues. These factors also need to be addressed by the management in order to minimise the decrease in productivity and maintain a healthy organizational climate.
Employee Satisfaction
Job satisfaction is a prominent topic in management research because it has a proven influence on motivation, commitment, turnover, engagement, and other employee-related variables. organizational changes, including mergers, may have a strong negative impact on employee job satisfaction because of differences in the management and the working environment.
Herzberg’s Two-Factor Theory is one of the most common models applied to job satisfaction, and it helps to explain the influence of organizational change on the employee. Based on this theory, job satisfaction and dissatisfaction are two distinct variables impacted by different factors. Firstly, there are hygiene factors, such as working conditions, employee relations, policies, supervision, and compensation. These factors relate to job dissatisfaction, and thus improving them leads to reduced job dissatisfaction. The second group is called motivators and includes the nature of the work itself, personal growth, achievement, recognition, responsibility, and career advancement. When these variables are addressed in a positive way, employees’ job satisfaction grows, leading to positive outcomes in terms of commitment and performance.
In the context of a significant organizational change, such as a merger, employees could experience a reduction of job satisfaction and an increase in job dissatisfaction. As mentioned in the previous section, structural changes have an impact on physical working conditions, employee relations, and internal policies. Hence, if there is a significant adverse change in these variables, employees will start to feel dissatisfied with their job. Managerial changes also impact the way leaders address employees’ growth, development, and achievements and thus may lead to decreased job satisfaction. Furthermore, the nature of the work itself may change as a result of a merger, causing lower job satisfaction than before restructuring. Addressing both motivator and hygiene factors may help leaders to maintain a high level of job satisfaction while also reducing job dissatisfaction among workers.
Miscommunication
Miscommunication is a paramount concern when it comes to managing organizational change because it affects how employees respond to change and collaborate with the management throughout the implementation process. Research shows that gaps in communication are among the critical reasons for the failure of mergers and acquisitions. The mechanism by which miscommunication impacts merger success is rather complicated.
First and foremost, gaps in communication lead to reduced awareness of stakeholders in relation to the change process. This means that employees do not receive comprehensive information about the change and its implementation. As a result, employees are likely to experience negative attitudes towards the change, which increases their resistance. In addition, the lack of awareness about the change implementation process has an impact on employees’ productivity and commitment during the change process. If tasks to be performed are unclear of confusing for the staff, they will have less power to solve issues that arise in the process. Without the support and commitment of employees, processes required to implement change correctly fail, leading to the failure of the merger.
Secondly, miscommunication has a significant influence on group dynamics, which, in turn, may compromise organizational climate, culture, and outcomes. This effect is particularly prominent during mergers when two different organizational cultures clash, and there is an inflow of new employees into the organization. Due to miscommunication, the chain of command and accountability may be come disrupted, which prevents employees from receiving regular levels of support in problem-solving and decision-making. Additionally, miscommunication may also impact the relationships among employees, leading to reduced team performance and outcomes. Preventing miscommunication should thus become the primary goal of leaders during mergers so that they could avoid these adverse outcomes and ensure successful change implementation.
Measuring Mergers
Mergers are a complicated process that requires consistent monitoring and continuous reassessment of results. While the occurrence of the merger itself can only be measured based on facts, such as whether or not the organizations or departments signed a decision to merge, the success and progress of a merger can be tracked using various methods. Some of the methods that would be relevant in the chosen scenario involve using accounting-based measures, managers’ perceived performance, and expert assessments.
First of all, accounting-based measurement is used as the primary strategy for evaluating the success of mergers both at the implementation stage and after the process is finished. This is because improved financial efficiency and use of resources are among the key goals behind many mergers, particularly in the public sector. Wang4 explain that accounting-based measures focus on changes in financial performance before and after a merger. To perform analysis, it is possible to compare various pre- and post-merger ratios that illustrate organizational efficiency, such as the return on investment or assets. The main advantage of this method is that it provides an objective evaluation as to whether or not the merger has achieved its goal. However, it does not account for processes that could affect the chosen performance metrics and thus does not provide the insight required for a comprehensive assessment.
Secondly, measuring mergers progress and success based on managers’ perceptions is also possible. In this method, the managers of both organizations complete surveys or interviews designed to address whether or not the objectives or goals of a merger were met and whether the implementation is going as planned. The assessment may include both financial and non-financial information, depending on the specific scenario. This method allows gaining more insight into the progress and can support decision-making and problem-solving in a merged organization. One important downside of this method is that it is mostly subjective, so the information acquired as a result may be biased.
Lastly, expert assessments seem to address the issues evident in both methods discussed above. Here, the progress of a merger and its success are evaluated based on both financial and non-financial measures by an external expert. Expert assessments provide objective and comprehensive information about a merger, but they can be costly and resource-consuming. Balancing different measurement options can help managers to get the most out of merger evaluations without significant resource expenditures.
Optimising Teamwork
The discussion in the paper shows that mergers often have a negative impact on teamwork in the organization. Addressing the issues arising from mergers requires a holistic effort of the management team, but can help to ensure that employees can collaborate effectively, show high levels of commitment, and are satisfied with their working conditions. There are four key strategies that the management could use to optimise teamwork following mergers: cultural and structural analysis, communication, participation, and training.
Firstly, it is evident that many issues experienced by employees and organizations during mergers arise from initial differences between the merging entities. Therefore, in order to support teamwork, it is essential for the management to understand these differences and plan for addressing them as part of the merger process. Researchers note that, in order to analyse potential financial outcomes of a merger through synergy measurement, it is crucial to perform the analysis of structural, cultural, operational, and leadership factors influencing performance. In the current scenario, managers of both departments should perform a convergence analysis that would outline the existing differences in organizational aspects, from structure and policies to culture and climate. This would help them to understand the changes that have to be made in order for the two departments to merge successfully. With regards to teamwork optimisation, it would be particularly useful to evaluate the current team structure, as well as supervision, motivation, and performance measurement strategies used in the two departments. Then, the points of convergence should be left unmodified, whereas differences should be addressed in order to ensure a smooth integration. This process will help to reduce the prominence and effect of cultural tensions and role confusion, which have a significant impact on teamwork in merged organizations.
Secondly, research suggests that communication plays a pivotal role in teamwork following a merger. Hence, leaders should address this organizational aspect as part of the planning and implementation processes. In order for teams to function correctly, it is essential that all employees receive extensive information about the change process that will take place. The information delivered to employees should explain the need for the merger, the step-by-step implementation process, the impact of the merger on employees, and their expected contribution. Additionally, if there are any changes to employees’ roles, compensation, or performance evaluations, they should be communicated to the target workers individually. While discussing these changes face-to-face or over the phone, managers would be able to answer the affected employees’ questions and concerns, thus providing reassurance. In addition to reducing the likelihood of miscommunication, this strategy would help to sustain organizational support and transparency in the face of the merger, thus decreasing employees’ resistance. To encourage two-way information exchange and organization-wide supportive leadership, other employees should also receive the opportunity to discuss their concerns or suggestions with the management. These communication strategies would assist in reducing employee resistance, uncertainty, and confusion, thus enabling teams to fulfil their tasks more effectively.
The third strategy suggested based on research is enhancing employee participation in decision-making. The lack of control over the change is the primary reason for employees’ resistance to change and their negative attitudes to its implementation. Employee participation in the change process and related decision-making serves to overcome this barrier and enable sustainable change, powered by employees’ support. Involvement in decision-making will have a positive influence on teamwork following a merger for three reasons. The first reason is that it would establish a culture of collaboration in a newly merged unit, which, on its own, would have a beneficial impact on teamwork. Additionally, taking part in decision-making would allow employees to know one another better, thus preventing interpersonal tensions. Lastly, having an influence on decision-making would enable workers to propose specific strategies or accommodations that would facilitate teamwork. For example, if the office lacks the necessary number of conference rooms that can be used for team projects, employees participation’ in decision-making would bring this issue to the managers’ attention, and the problem will most likely be resolved.
Finally, one of the most effective ways of optimising teamwork in a recently merged organization is training. Research shows that teamwork training has a significant favourable influence on team performance and related outcomes. A recent large-scale systematic review found evidence that various teamwork interventions have a beneficial effect on employees’ team participation, interpersonal relationships, goal achievement, and preparedness to work in teams. The effect size of interventions was usually larger for new teams, meaning that they could benefit employees during a departmental merger. In particular, teamwork workshops, simulation training, and review-type activities had the highest effect sized when it came to improving teamwork. Besides teamwork interventions, managers could also use the opportunity to conduct training in other areas, as long as the training involves group activity. In the chosen context, employees would particularly benefit from training in communication, conflict resolution, leadership, and personal development. Conducting these types of interventions in groups where employees from both departments would interact actively would help to improve teamwork and achieve better organizational outcomes following a merger.
Conclusion
Overall, the paper examined organizational processes and factors that may have an influence on employees’ productivity and organizational communication during a departmental merger between two governmental entities. The research makes it clear that factors such as communication, leadership change, employee resistance, participation in decision-making, and organizational support all have a crucial impact on the success of a merger. In order for a merger in the chosen scenario to be successful, it is essential for leaders to respond to employees’ needs through improved communication, training, and participative decision-making. Using the recommendations provided in the paper, managers can ensure a stable level of employee productivity and teamwork, which would lead to positive outcomes in the long term.
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