How to Change Organizational Structure Due to a Merger

When two companies combine into one larger company, the hierarchy of people who work together must often change dramatically in order to achieve new goals. Managing change involves recognizing the organizational culture of each separate organization. Values and traditions held by one company may not be shared by the other. Preparing your workforce for organizational change due to a merger involves clearly establishing the purpose, creating a compelling vision statement, and overcoming resistance to change by explaining why the status quo is insufficient.

Things You'll Need

• Desktop publishing software

Instructions

1. With the sponsorship of senior leaders, establish a new organizational mission, objectives, and strategies based on the merger. Sometimes, one company takes over another a company and the second company assumes the branding of the first. In horizontal mergers, two competing companies merge. In a vertical merger, a company merges with one of its customers. In some cases, companies that sell the same or related products but in different markets merge. Depending on your situation, your organizational structure should reflect an effective new entity. Changes such as removing redundancy in the new company can be disruptive, so proceed with care.

2. Present the new strategic plan to employees and allow them to ask questions. Involve them in the decision making process whenever possible.

3. Assess each company's corporate culture. Combining a traditional top-down organizational structure with a collaboratively run organization requires more planning to effectively blend the two cultures, preserving the best features of both.

4. Empower employees to initiate changes. Change is most successful when the vision for the future is perceived as addressing current problems and ultimately results in an improvement.

5. Align all programs and activities with the new strategic plan.

6. Establish metrics for each program to monitor progress towards achieving success in terms of quality, finances and customer satisfaction.

7. Allow time for the transition to occur. Employees need to be able let go of old practices that have made them successful in favor of new practices which may take time to learn. Working with new people in new locations typically requires a period of adjustment.

8. Train people for new roles. Recognize that before people can behave in new ways in a new organizational reporting structure, they need to develop the skills and competence to do so. Coach employees to discover their own new paths. Establish orientation programs to ensure all functions integrate effectively.

9. Assess how the new organization is working, based on your operational metrics. For example, after six months, evaluate customer satisfaction and make adjustments to business processes that impact customers accordingly.

10. Communicate changes effectively through the use of email, newsletters and intranet sites. You can also use social media technology such as wikis, blogs and forums to explain and promote organizational changes due to mergers. Timely communication prevents rumors.

References

• "Designing Organizations: An Executive Guide to Strategy, Structure, and Process;" Jay R. Galbraith; 2001
• "Organizational Strategy, Structure, and Process;" Raymond Miles and Charles Snow; 2003
• "Designing Your Organization: Using the STAR Model to Solve 5 Critical Design Challenges;" Amy Kates and Jay R. Galbraith; 2007