Emerald Article: Managing HRM risk in a merger
To cite this document: Jane Bryson, (2003),"Managing HRM risk in a merger", Employee Relations, Vol. 25 Iss: 1 pp. 14 - 30 Permanent link to this document:
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Managing HRM risk
in a merger
School of Business and Public Management, Victoria University of Wellington, Wellington, New Zealand
Received December 2001
Revised June 2002
Keywords Mergers, Human resource management, Employee relations, Risk, Trade unions Accepted July 2002
Abstract Mergers are big, risky business and they frequently fail. This article reviews the literature around managing human resource management (HRM) risk in a merger. It ﬁnds that poor merger results are often attributed to HRM and organisational problems, and that several factors related to maintaining workforce stability are identiﬁed as important in managing HRM risk. Gaps are exposed in the extensive merger focused literature, particularly its lack of consideration of the role of unions and different employment relations policy approaches. The New Zealand-based banking merger of Westpac and TrustBank is used to illustrate and explore the impact of union involvement alongside HRM initiatives, and to extend Guest’s employment relations policy choices taxonomy. This article contributes an important additional dimension to a theory of managing HRM risk in a merger.
Vol. 25 No. 1, 2003
q MCB UP Limited
Most mergers fail. Quoted failure rates vary from 50 per cent to 80 per cent depending on the industry and measures used (Booz Allen & Hamilton, 2001; Cartwright and Cooper, 1996; Tetenbaum, 1999; The Economist, 1999). Despite this the corporate appetite for mergers continues unabated. The year 2000 was the sixth consecutive year of record levels of merger and acquisition activity worldwide. There were more than 36,700 transactions with a combined value of more than US$3.49 trillion (Thomson Financial, 2001). The number of jobs that these mergers impacted on has not been estimated, but conservatively it must run into the hundreds of thousands. For instance, at least 130,000 ﬁnance jobs have disappeared in western Europe alone as a result of mergers and acquisitions in the 1990s...
Citations: depending on the industry and measures used (Booz Allen & Hamilton, 2001;
Cartwright and Cooper, 1996; Tetenbaum, 1999; The Economist, 1999)
worldwide. There were more than 36,700 transactions with a combined value of
more than US$3.49 trillion (Thomson Financial, 2001)
have disappeared in western Europe alone as a result of mergers and
acquisitions in the 1990s (International Labour Organization, 2001)
Hamilton, 2001; Cartwright and Cooper, 1994; Datta, 1991; Hunt et al., 1987;
Moore, 1998; Rhoades, 1998; Tripe, 1999; Wallis Committee, 1997; Weber, 1996).
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