In some cases, key business leaders should be kept running the business, but in others, there is an opportunity for companies to backfill the position and move a high performer into integration. The solution to organizational integration is a responsive business model toward external changes. An annual barometer of more than 700 integration managers attending Conference Board’s Merger Integration Conference since 2010 identifies similar needs year after year. This process involves training employees, using public relations to educate stakeholders, and maintaining communication and verification systems. Another team forms to solve another issue. New research data from a huge cross section of the industry and high-end statistical research analysis using structural equation modelling. Sharing changing external factors with employees and stakeholders through ongoing training or knowledge-sharing is one solution. Following are several horizontal integration examples today and the companies that have made the process work for them. The government may also institute regulations or stimulate the promotion of certain energy types. Rebecca Doherty is a principal in McKinsey’s San Francisco office, Oliver Engert is a director in the New York office, and Andy West is a director in the Boston office. For the first, a technology company, the objectives of its deal were to build on the acquired company’s R&D capabilities and launch a new sales channel in an adjacent market. Please click "Accept" to help us improve its usefulness with additional cookies. The changes become integral to how the organization functions. "Kurt Lewin and the Planned Approach to Change: A Re‐appraisal." The visible career trajectory of this individual helped elevate the perception of integration roles for subsequent acquisitions. A thorough literature review on the relationship between HRM, strategic HRM and performance. Year-on-year revenues were up well over 10 percent as of the last quarter for which figures were available. To truly fall into this category, this increased production must occur in the same part of the supply chain. In 2012, Facebook acquired Instagram for an estimated $1 billion USD. During this stage, you are able to fully incorporate the changes you've worked on in the five initial stages that built employee commitment to change. tab, Travel, Logistics & Transport Infrastructure. Oliver Engert, Neel Gandhi, William Schaninger, and Jocelyn So, “. Several financial and non-financial performance measures of an organization are positively related to its levels of HRM Strategic Integration (HRMSI). Enterprise Application Integration A category of technology, also known as middleware, that supports integration of systems, processes and data. In 2006, Walt Disney bought Pixar Animation Studios for approximately $7.4 billion USD. . 2455 Teller Road Companies that apply best practices tailored to deal objectives have the best chance of delivering on the full potential of the deal. To do this, management must do all that is possible to stabilize your organization at the new level of functioning. One of the first things that KHC did was to make cuts in any existing redundancies in an effort to boost profits. As a result, the team quickly launched cross-selling opportunities to similar customers of the acquired company and deployed resources to accelerate ongoing development and merge R&D road maps. Maintaining the momentum of cultural integration well into the integration process is equally important. The managers weighed these potential goals against the sources of value in the deal, deciding to focus on four that were most closely linked to this value and that struck a balance between areas where the two companies were similar, as well as areas where they were different. Provide continual feedback to your employees about the status of the organizational changes. If you allow the changes to fall by the wayside, you are creating an environment in which employees will be less likely and even unwilling to change again in the future. Hashaw Elkins is a financial services professional and project management consultant. In the initiation/awareness stage and the investigation stage, you were introduced to the concept of unfreezing your organization so that you could unlearn your old behavior patterns before changes could happen. She has been writing on business-related topics for nearly 10 years. “Low performers” are defined as companies where respondents report that their companies have achieved neither cost- nor revenue-synergy targets in transactions (n = 302). The energy company is one example, but the same concepts of organizational integration apply to other industries and small businesses. organizational structure, integration, and manufacturing performance: a conceptual model and propositions June 2012 Journal of Operations and Supply Chain Management 5(1) Rebecca Doherty, Spring Liu, and Andy West, “. Organizational alignment promotes collaboration and teamwork across all areas of work internally within the organization. Companies often struggle to assess and manage culture and organizational compatibility because managers focus on the wrong things. After the merger, LN Mittal was named as the president of Arcelor-Mittal and became the majority stakeholder in the company. This book is a masterpiece of scholarly work and good for researchers and senior corporate HR managers. “High performers” are defined as companies where respondents to the Global M&A Capabilities survey report that their companies have met or surpassed cost- and revenue-synergy targets in transactions (n = 464). “Low performers” are defined as companies where respondents report that their companies have achieved neither cost- nor revenue-synergy targets in transactions (n = 302). The merger also granted stakeholders 1.05 shares of UAL stock for each share they held in Continental Airlines. Netflix is a prime example of vertical integration. Do You Know That Intention Is the Third Stage in Managing Change? In May 2010, United Airlines (known then as UAL Corporation) acquired Continental Airlines. The company started as a DVD rental business before moving into online streaming of films and movies licensed from major studios. mission and vision statement of an organization. What Will Happen If the Organization Fails in Integrating the Changes? Should you need additional information or have questions regarding the HEOA information provided for this title, including what is new to this edition, please email We'll email you when new articles are published on this topic. However, many companies have been saved through horizontal integration and rolled into a larger, more successful company. Unleash their potential. For example, if the changes you made involved moving from a workplace full of individual contributors to the formation of employees on work teams, a lot will need to change. Provide continual feedback to your employees about the status of their own performance within the systems that were newly created to accomplish the changes. In this way, the airlines were able to provide more service to customers while also streamlining their processes. Digital upends old models. The integration of an acquired business should be explicitly tailored to support the objectives and sources of value that warranted the deal in the first place.