1.

Compare and contrast the implemented change processes between

the two merger events.
The change processes presented in the article could not have been more opposite;
in fact its hard to believe a company went from such complete success in a merger
to such complete failure the second time around.
In the first merger, much of the process was organized around communication.
Management had a single plan known by all, and a primary goal was getting
everyone on board with the change. In addition, teams consisting of people from
both companies representing all levels of the workforce so all voices were heard.
This allowed employees to get excited about the combined new company. In fact,
management organized a merger party celebrating the new company when the
merger was due to be completed six months hence.
When contrasted with the second change you find mostly the opposite things
happened. Everything was conducted in secret. When initial talks failed, executives
bad mouthed the merger idea. Once the merger was a go, no effort was expended
to try and build a new single company. Layoffs were handled poorly with little
transition assistance. Instead of combining, both companies retained their
headquarters. There was little or no cross-training: even within the sales team while it was merged - that was in form only; each person stayed with their original
products. Finally, there appeared to be no true end goal in mind, just two separate
companies pretending to be one. Even the company name managed to alienate
employees that had originated with S. Its almost as if company executives didnt
believe in the merger and thought that one day the companies might split. It would
seem that the company remembered nothing from its first merger experience.

2. Discuss what interpersonal communication skills are needed by

organizational leaders, managers, and staff employees during times
of change?
Leaders need to be on board and communicate the what and the why
consistently and confidently. The message should be delivered in multiple ways
such as websites, email, and personal messages. Leaders and Managers need to
seek out employees reactions and feelings, listen to concerns with empathy and
take action when valid concerns are raised. Managers and leader also need to be
wary of tone, facial expressions and body language. Often these can belie a
positive message. Email especially can lead to misinterpretation of tone. Emails
and text communication need to be worded carefully.
Employees need to listen and ask questions to make sure they understand what is
happening and their role in it. If employees are having reservations about certain
decisions they should make sure they are heard, but do so in a constructive way.
This is more so if they have better ideas especially in areas they have control over.
Management should be open to receiving this criticism assuming it is constructive.

Finally, employees should also be forgiving. They need to allow management some
leeway in making mistakes and not ax-grind on every little problem that pops up.

3. Discuss how to implement cultural change during mergers.

It is a good idea to start thinking about this before the merger even takes place. As
per Tim Donnelly here (http://www.inc.com/guides/201105/how-to-merge-corporatecultures.html) While the legal team is scrutinizing the proposed merger, have
someone else take a look at the cultural differences between the two companies.
The new companys name should be considered thoroughly as it can have a direct
effect on how employees feel as evident in the PS-U merger. After the merger has
been inked, a decision on whether to keep one of the company cultures or merge
into a new one should be made. On page 91, it is important in merger situations
for the companies to decide well in advance whether they will adopt the existing
culture[or] create a new, blended culture.
Next, research must be done to determine where the culture differences are and
how each one will be resolved. The P/S merger utilized assistance from an outside
consultant. They had some things in common, namely the strong and structured
human resource practices that was the basis for selecting the employees that
would move forward into the new company.
The results of the research can be used by the executive team to decide the culture
they want to build within the new company. Incentives and measurable goals
should be put in place to encourage the movement toward the new culture. Finally,
all this needs to be communicated clearly throughout the company so everyone
knows the new culture and is actively working to live it.

4. The second merger discussed in this case study did not result in a
positive change experience. What could organizational leaders have
done differently to ensure a more positive outcome?
Generally, the communication surrounding the second merger was horrid. Before
the merger even happened, there were secret meetings that left employees in the
dark and after the first talks failed, employees received information on the merger
failure from news reports. In addition, the National Sales Manager with PS bad
mouthed the merger with U idea as bad idea due to massively different corporate
cultures. A better path would have been to openly communicate their intentions.
Knowing that the companies had a competitive history, organizational leaders
should have agreed to a friendly truce to not talk badly thus resulting in employee
unease.
In addition to bad communication there was no solid, combined plan for the merger,
nor did they express combined culture as a goal. Each company had its own merger
team. Several of PS key leaders quit, probably due to this lack of planning and

foresight. A combined transition team and stated cultural goals could have gone a
long way to rectifying this issue. With a little bit of pre-merger research they might
have foreseen the key leaders resigning and at least tried to prevent it with good
retention packages.
Next, they failed on the name. Eliminating S from the name alienated those who
had come from S. An easy way to prevent just such an issue would have been to
poll employees on what the new name should be, or even opinions on differing
name options. This would have made employees feel that their opinions matter and
that, even though the merger, they are important to the company.
Finally, everything seemed to be focused on how nothing would change.
Management focused on telling employees that nothing would change. This
resulted in an inability to integrate operations. By keeping everything separated,
culture naturally was included and probably caused ill will among the two
companys employees. Management should have made a plan for and been
promoting a combined new culture (as they did with the first merger).

5. What strategies can PU Pharmaceuticals implement now (long after

the merger) to promote a more positive organizational climate?
This is a tough question. Management has failed miserably and has lost a lot of
trust as well as key employees. If I was the CEO, the very first thing I would do is
attempt to identify all the ways we failed in the merger. After that was finished, I
would immediately convene a company-wide meeting and offer an apology to all
employees, admitting my error and claiming fault, and pledging to identify and fix
the issues. I would encourage feedback from all levels of the company, and provide
an anonymous way for them to do so. Just based on the text some likely starting
points would be:
1. Rebuild employee trust starting with opening up as much as possible the
communication about what will be happening to correct the issues.
2. Consider a more inclusive company name; open it up to employee
suggestions.
3. Convene a committee, possibly enlisting outside consulting resources to
identify the failures in the cultural merge and determine ways to move
forward and merge the two cultures
4. Start investigating what it would take to have a single company
headquarters.
5. Employee surveys (utilizing an outside company and doing my best to ensure
anonymity) to assess the current state of the company and identify
particularly troublesome areas that may need immediate attention.
This is just a start. Management failed epically with this merger and once broken,
trust is quite difficult to regain. I believe it can be done but it needs to be done in
and open and honest way promoting two-way dialogue.