ENBD was the new company formed following the merger between Emirates and NBD (Mitra & Pandley 2008). Prior to the merger, the two businesses had formulated principles that would guide the process. Jointly, the two entities had formed a center of expertise that would guide the staffing process. After coming together, the new business had to reconsider the composition of the workforce. The activities of the two businesses also required to be streamlined into one.
A human resource team was formed and tasked with the responsibility of ensuring that the company’s staffing structure was up to the required standards (Kumar & Fernandez 2011). The staffing process was done in a manner through which both companies had an equal say. None of the two businesses dominated the other. Decisions pertaining to employment were discussed and agreed upon by both parties. Transparency was also observed since no single party was free to make decisions without consulting the other.
On its part, the merger between Westpac Corporation and St. George Bank was a form of acquisition. The former appeared to have assumed more management roles after the merger compared to St. George Bank (Cejnar 2010). Dominating the management during the formation stage meant that Westpac Corporation had an upper hand in the staffing process. The new company had to streamline its composition of employees. Staffing is one of the functions of management, which means that most decisions were made by Westpac Corporation (Gaghan 2007). The activities of the two companies with regards to staffing matters were not properly coordinated compared to the case of Emirates and NBD.
In addition, the partners lacked staffing policies to guide the process. For instance, the merger agreement allowed St. George Bank to handle the new company’s activities in Sydney without consultation with their partner (Wu n.d). As a result, St. George Bank will be in a position to make all the decisions pertaining to staffing in Sydney without necessarily having to bring Westpac Corporation on board.
After the amalgamation between Emirates and NBD, the new management assured their employees that they will retain their jobs. There were no intentions to offload the existing employees (Kumar & Fernandez 2011). However, after the merger, it became apparent that there was a need to downsize since the new company needed to streamline its operations. The two merger partners came together and formed an integration team that was required to oversee the new staffing process. A staffing model was formulated to promote transparency in the process.
The integration team played an important role in ensuring order during the transition process (Gaghan 2007). None of the partners was required to dominate over the other. Both companies had equal say when it came to matters of staffing. Effective communication between the employees and the management also reduced fears of job losses. The company’s recruitment policies were clearly communicated to the employees to assure them of their jobs.
In the case of the merger between Westpac Corporation and St. George Bank, both partners adopted different approaches to maintain the workforce (Cejnar 2010). Westpac Corporation targeted to reduce its number of employees, while St. George Bank wanted to increase the size of its workforce to help in its quest to expand operations (Lehto & Bockerman 2008). The level of organization portrayed by Westpac Corporation and St. George Bank was poor compared to that adopted by the Emirates and NBD. For example, St. George Bank was seen to assume the subordinate role, while Westpac Corporation was seen to dominate the management roles (Donovan & Gorajek 2011). The situation was worsened by the fact that the union between the two companies was more of an acquisition than a merger.
The fact that St. George Bank was allowed to run some of the new branches independently meant that the company was required to deal with staffing issues in these areas (Wu n.d). However, some of the subsidiaries were under the central leadership of the merger. The staffing system in the new company was more decentralized compared to that exhibited in Emirates NBD. All the operations of Westpac Corporation were under the new merger. As a result of the decentralized system in the merger, there was poor communication between the management and the employees. The situation was significantly different in the case of Emirates NBD. The employees were insecure about their jobs following this poor communication (Lehto & Bockerman).
The newly formed merger (Emirates NBD) had a centralized system of management (Pandley & Mitra 2008). The company had one chief executive officer. It was also put under the leadership of a chairman, who served with the help of six board members. The chief executive officer was independent and was not an official in any of the two merging parties (Kumar & Fernandez 2011). As a result, no part was likely to control the other.
The new management also set up a human resource department that was charged with the responsibility of addressing staffing issues in the two merged companies. Emirates NBD hoped to retain members of staff that showed potential to serve well in their various capacities. The two companies had common goals. As such, they were in a better position to fulfill their mandate compared to the other merger. Cases of conflict between the entities were reduced (Donovan & Gorajek 2011).
The union between Westpac Corporation and St. George Bank was viewed by many as more of an acquisition than a merger (Wu n.d). Unlike the centralized system observed in the union between Emirates and NBD, Westpac and St. George retained their chief executive officers. The officers were charged with the responsibility of overseeing all the businesses. The union allowed St. George Bank to run the old branches in Sydney, while the other branches remained under the central management of Westpac Corporation (Donovan & Gorajek 2011). The chief executive officer of Westpac Corporation was seen as the overall authority in the merger.
The official controlled St. George’s subsidiaries, especially those that were put under the union (Mylonakis 2006). In addition, the officer was expected to make decisions and policies concerning staffing in the union. As a result of this decentralized system, there was confusion among employees concerning the source of authority in the union (Lewis & McGlinchy 2010).
Rightsizing after Merger
In the Emirates-NBD merger, Emiratization was the main principle guiding the rightsizing process. The principle was an initiative by the United Arab Emirates government to promote employment in the country (Fernandez & Kumar 2013). Under the initiative, firms operating in the country were mandated to train and secure jobs for the nationals. As a result, Emirates NBD was required to not only consider the qualifications and performance of the employees while rightsizing but also to comply with the laws of the country (Ansari 2013). The company ended up shedding off a large number of employees who were not from the country (Tai 2012).
The move was executed despite the fact that some of the foreigners who were laid had more potential compared to the United Arab Emirates nationals. The predicament was that the company lost some of its best employees. Some of them were absorbed by competing businesses (Mitra & Pandley 2008).
Unlike Emirates NBD, the union between Westpac Corporation and St. George Bank was not adversely affected by government policies. The Australian government allowed businesses to operate freely without any external interference. The case was different in the United Arab Emirates (Latimer 2012). The newly formed business (following the union between Westpac Corporation and St. George Bank) required no specific criteria in efforts to the right size. However, the company had to put into consideration the laws governing the relationship between employers and employees.
Unlike the case of Emirates NBD, Westpac Corporation and St. George Bank were required by the Australian laws to compensate workers who were to be affected by the retrenchment process (Steinwall 2009). The need for compensation arose where employees were to be retrenched before the expiry of their current contracts. Unlike the case in the United Arab Emirates, Westpac Corporation and St. George Bank where required by law to provide psychological support to their employees upon laying them off (Satya & Kourouche 2008).
Emiratization did not affect foreigners only. It is noted that the company conducted an assessment of its workforce, which was aimed at determining which employees were effective and which were not (Kumar & Fernandez 2011). The individuals noted to perform well were retained in the organization, while poor performers were relieved of their duties regardless of their nationality. The process was carried out in accordance with the human resource model (Beena 2011). Assessment of the workforce in terms of performance was seen as a smart move by the company. The management was in a position to determine the value of each and every individual working in the organization (Mitra & Pandley 2008). Valuable talent was retained in the business, which helped in the maintenance of good performance.
At the start of business, Westpac Corporation and St. George Bank handled rightsizing independently. Each business was required to handle its staffing issues independent of the other. After the merger, there was a need for the new business to streamline its operations (Wu n.d). For this reason, some of the employees, especially those whose roles had been eliminated or taken over by other individuals from the merging party, had to be made redundant. Just like was the case with Emirates NBD, it was important for the two businesses to assess their workforce to ensure that they retained the most qualified and efficient labor force.
However, no assessment was done in the case of the Westpac Corporation. The scenario was different at St. George Bank, where an assessment of employees was carried out. The assessment was in vain since Westpac Corporation, being in charge of management, relieved two thousand employees from St. George Bank of their duties at the start of the merger (Cejnar 2010). During the laying off process, the company lost valuable employees especially those serving in management. The company was therefore left deficient in talent.
The rightsizing process by Emirates and NBD was indiscriminate. All employees were susceptible to downsizing. The situation meant that any employee working in the company was at risk of losing their jobs regardless of their age, their position of responsibility, as well as their level of expertise (Kumar & Fernandez 2011). Employees had no control over the rightsizing process since anyone would be a victim of downsizing. After the merger, employees felt insecure about their jobs as a result of the company’s previous policy on rightsizing. The policy was considered to be fair to the company’s employees since it eliminated cases of bias.
A predictable rightsizing mechanism would promote favoritism. Those individuals aware of their possibility to be rendered redundant would collude with those in management positions to have them retain their jobs. However, proper communication mechanisms were put in place with regard to rightsizing. Employees were notified in advance of the company’s intention to right size which helped them to prepare psychologically for the process (Tai 2012). Proper communication was also aimed at reducing anxiety by employees. The employees were, therefore, less distracted as a result of fear of losing their source of income.
Westpac Corporation and St George bank’s rightsizing process was however more predictable compared to that of Emirates and NBD. Rightsizing in the union entailed scrutiny of all the job positions in the company to determine the right size of employees who were required. The most considered aspect during the rightsizing process was that of duplicate duties. The company realized that after merging, many individuals were holding duplicate duties (Lewis & McGlinchy 2010). The situation was mostly due to the fact that the two merged businesses operated independently prior to their union. For this reason, they were likely to have almost identical structures in terms of management and staff. The approach was different from that used by Emirates NBD that was indiscriminate of the position that one held in the company.
Following the union, the two companies started operating as one and as a result, there was a need to streamline operations. Having two or more individuals serving the same role would be uneconomical for the company. Westpac Corporation and St George bank’s management also failed to communicate to their employees in advance (Cejnar 2010). Rightsizing was abrupt and employees felt that their source of livelihood was threatened. The result of this uncertainty was that employees got less motivated to work and their output was considerably reduced.
Following the merger between Emirates and NBD, an integration team was set up in an attempt to reduce the negative effects that would result from rightsizing (Fernandez & Kumar 2013). The company knew that their attempt to right-size would affect the morale of the employees to work and in turn, this would reduce their productivity. The integration team was also charged with the responsibility of briefing the management on any issues that arose from the rightsizing process that was likely to affect the performance of the employees. The management would then be in a position to respond to any issues that arose promptly before they would hurt the performance of the newly merged company (Gaghan 2007).
The integration team was also charged with the responsibility of helping the employees handle their emotions. Witnessing a fellow employee being rendered redundant is a stressful experience and many. Many of the company’s employees developed a fear of themselves having to pass through the same situation too.
Unlike Emirates and NBD, Westpac Corporation and St George bank did not set up an integration team. After the merger, the two companies went ahead to start the rightsizing process without paying any attention to the negative effects that the process would pose to the company employees (Mylonakis 2006). The result was that many of the employees sunk into depression due to fear of being rendered jobless too. The employee’s level of productivity also reduced drastically. Instead of focusing on their duties in the newly formed company, many employees thought of ways in which they would survive future downsizing by the company.
The integration team formed by Emirates and NBD also ensured that there was sound communication between the management and the employees. Communication is an important tool help employees deal with stress (Saji 2012). Through communication, employees feel that the management still values them. Following rightsizing, employees who were left felt that they too were expendable. As a result, their morale to work dropped significantly.
However, through effective communication, the employees were made to understand that their retention in the company as a result of merit. It was argued that the employees would feel more proud about themselves if they were made to understand that their retention was due to their good work during their stay in the organization (Wu n.d). The management also made the employees understand that the process of rightsizing was inevitable at the time. The employee’s fear of future rightsizing would therefore be greatly reduced.
On the other side, there was poor communication between Westpac Corporation, St George Bank, and their employees following the rightsizing process. Although St. George bank highly regarded its employees, the decision to merge with Westpac Corporation meant that staffing would be a joint decision between them (Donovan & Gorajek 2011). Westpac Corporation was more profit-oriented and focused more on improving their performance as opposed to addressing issues that faced their workforce. As a result, the employees lost their trust in management. They felt that the company did not value their existence and as a result, their motivation to work was greatly reduced (Bunn & Guthrie 2010). Emirates and NBD had therefore better handled the issue of rightsizing as compared to Westpac Corporation and St George bank.
Following the rightsizing process, Emirates and NBD had invested a lot of money to train their staff (Mitra & Pandley 2008). The training was aimed at increasing the productivity of the employees. The process would also ensure that the employees got an opportunity to relax and forget about the rightsizing process that had just taken place. The initiative by the company to train their employees also created a perception that they were determined to retain their workers.
Employees were taken through a series of seminars and workshops organized by the company which was held in different countries (Saji 2012). Traveling experiences also helped employees to relieve stress. The company was also in the process able to justify their claims that indeed the rightsizing process was inevitable. The confidence of the public, as well as that of the employees, was earned in the process. Training would also see the company attain its long-term goals as they would enjoy having a competent workforce.
Westpac Corporation and St George bank offered no training to their remaining employees following rightsizing. The two partners concentrated more on earning profits as opposed to spending on their labor force (Cejnar 2010). Their main objective was to cut the cost of doing business by all means. Failure to train employees following the rightsizing meant that they would take a longer time to recover from survivor syndrome. The output by the two partners would therefore be considerably reduced based on the fact that their workers are not motivated to see the firm succeed (Wu n.d). Training would also help employees to get their minds off the rightsizing process. The workers would also feel valued since their employer was willing to invest in them. Failure to take any steps by the company to motivate their employees further worsened the survivor syndrome situation. Employees would be of the opinion that their employer attached more value to money than to their wellbeing (Beena 2011).
Following rightsizing by Emirates and NBD, the new business was certain that their employees had suffered trauma. For this reason, there was a need to provide psychological counseling to the employees so as to help them overcome depression associated with the trauma. It is important to note that survivor syndrome is a psychological condition (Beena 2011). As such, the approaches taken by the company to reverse the situation had to target their employee psychology.
One of the responsibilities that the integration team was charged with was to provide both emotional and psychological assistance to the employees (Pandley & Mitra 2008). The end result was that they quickly recovered from the trauma and assumed their normal responsibilities within a short period of time. They also felt more appreciated and proud to be associated with the company.
Westpac Corporation and St. George Bank took no initiative to provide psychological support to their employees following rightsizing. Following the process, the company resumed operations in all its branches. They also failed to acknowledge the fact that their employees were emotional beings. No efforts were taken to counsel the workforce even after the trauma they had suffered seeing how their fellows had been rendered redundant (Wu n.d). Instead, the company created an impression that downsizing was a normal operation and that employees should be able to prove their worth to their employer for them to retain their jobs.
As a result, the company’s employees took a considerably longer period of time to recover from the survivor syndrome. Their output was also considerably reduced. They felt less motivated to work for a company that showed no appreciation for their efforts (Beena 2011). Fear of being rendered redundant also made them distance themselves from the company since they felt less appreciated.
Varying cultures was one of the greatest problems that faced the merger between Emirates and NBD. There were two forms of cultural differences that existed among the employees. First, there was the issue of varying organizational cultures. Both firms had different goals and objectives before the merger took effect (Fernandez & Kumar 2013). The two companies also had different policies. Employees found it hard to work together as a result of these differences.
The two firms were also faced with the problem of culture in terms of the countries of origin. The company’s labor force is constituted of individuals from fifty-one countries. For them to be able to work together favorably, it was important for them to undergo a series of training (Kumar & Fernandez 2011). Cultural issues resulting from employee background were more compared to those brought about as a result of organizational structures.
The merger between the Westpac Corporation and St George bank also had its share of cultural issues. The company was however faced with more organizational cultural issues as compared to those associated with background (Cejnar 2010). The biggest proportion of the company’s labor force was from New Zealand and Australia. Merging the two cultures would be an easy task. The companies were however very different in terms of organization. They possessed different policies and codes of conduct that further widened the levels of disagreements that occurred between the employees of the two companies (Wu n.d).
Cultural issues experienced as a result of the merger between Emirates and NBD were solved through a series of workshops organized by the new chief executive officer. A total of 107 workshops were held. The workshops were aimed at bringing employees together. The company felt that by organizing the workshops, they would create a platform where the employees would get an opportunity to interact with each other which would strengthen relations (Gaghan 2007). Workshops also provided an opportunity for the employees to develop deeper relations since they would take time to understand why their fellow workers behaved the way that they do. Emirates and NBD also invested heavily in financing the process of cultural integration. 33 million were spent on the workshops (Kumar & Fernandez 2011).
Unlike, Emirates and NBD, Westpac Corporation and St George bank did not organize workshops to help in cultural integration. The two companies however embarked on training employees at their place of work (Saji 2012). As a result, the employees do not get the chance to freely interact with each other to exchange ideas. They are also not in a position to understand each other at a personal level as a result of limited contact. The integration process by the company was therefore only aimed at promoting efficiency at the workplace rather than improving relations between the employees (Wu n.d).
In the case of Emirates and NBD, the integration team was charged with the responsibility of promoting cultural competence among the employees. The team was to merge the cultures of the two companies. The integration was aimed at reducing hostilities that were likely to arise as a result of differing cultures (Campbell & Rowley 2008). Cultural differences between the two companies would have led to increased employee turnover. Employee turnover is the rate at which the business replaces its workforce. The situation would have led to increased cost of operations since they would be required to train new employees to replace the old ones. Cultural incompetence would have discouraged many workers from remaining in the business since they are not contented in the manner in which things are run (Lehto & Bockerman 2008).
Most of the competent employees would then be poached by other competing firms that had more favorable cultures. The end result would be that the company would be left with incompetent workforces that are less competitive in the market. The performance of the company would therefore be expected to drop significantly. Loss of employees to other competitors would also mean that the company risked stiff competition from their rivals (Bunn & Guthrie 2010).
On the other hand, Westpac Corporation and St George bank engaged in cultural merging independently. Each of the businesses was required to take their employees through the process of merging cultures. Trainers were hired to hasten the process (Cejnar 2010). The process was however seen to be more effective in terms of productivity since employees would be trained to adopt a culture in relation to their responsibility in the business. Less money would also be spent in the process. The business was therefore in a position to cut on their expenses translating to more profits (Wu n.d).
The process of merging the cultures was also short-lived since the employees received training while they were still at their place of work. The approach was also advantageous in that lesser time was spent without working. Employees were still carrying out their normal responsibilities even as they underwent the merging process thus generating income for the business (Lewis & McGlinchy 2010).
The quest to foster cultural integration by Emirates and NBD was aimed at improving the working conditions of the employees. The company felt that with an efficient labor force, productivity would be enhanced (Fermandez & Kumar, 2013). According to the company’s policy, a satisfied workforce would translate to customer satisfaction since the employees would be motivated to work (Pandley & Mitra 2008).
On the other hand, the merger between Westpac Corporation and St George bank gave more emphasis on customer satisfaction (Gaghan 2007). They were of the opinion that customers were the main source of revenue. Without their customers, the company would not be in business. Cultural competence was therefore aimed at improving relations between the business and their customers. Having joined to form one business, the two firms brought their customers along with them. The customers were to receive services from employees from the two businesses and thus there was a need to ensure that understanding was enhanced between the business and their employees.
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