Mergers and acquisitions (M&A) are a constant source of growth and transitions in the business world. Since the dynamics have changed so drastically during the pandemic, the consequences of these common events will have varying impacts on affected participants. Some of the most relevant impacts are outlined here as the discussion turns to how M&A impacts the modern business world.
New Key Players
The leadership team has the most obvious impact in the aftermath of a merger or acquisition. A Board of Directors or Executive Committee may be formed as the process develops. The team members generally represent both (or all) companies involved in the transition. These key players are likely to continue on in their assigned roles or some other relevant capacity after the merger or acquisition is complete. This change is generally among the first to occur at the onset of M&A announcements.
Temporary or contractual third parties may also be hired to assist current employees and the leadership team in navigating their way through the transition. Although they will have a major role in the beginning, their involvement wanes as the merger or acquisition comes to fruition.
One of the reasons people are sometimes uncomfortable with mergers and acquisitions is the uncertainty around new people and new procedures. Structural changes within the organization include both the human capital and the technical policies and procedures. Changes to day to day structure can range from mild to severe and will impact things like employee turnover, employee satisfaction, and the effectiveness of lean management. Most mergers and acquisitions are designed to improve the overall efficiency of people and projects. The organizational structure requires development to survive. An environment involving M&A demands even greater efforts for development and redevelopment.
Business Practice Updates
The business world is most affected by mergers and acquisitions when they are negotiating new contracts or updating existing vendor records. Due to the new corporate layout, fee structures, payment methods, and delivery options may change. Whenever possible, customers and vendors must be informed of potential changes before they take effect. Simple but direct communication notices regarding upcoming changes are the best way to alleviate concerns. When a new company is formed, current branded materials must be removed and replaced with an updated version.