Strategic Alliances and Behavioural Transformation

Based on Human Resource Management (4th Edition) by Alan Price - published by Cengage

Strategic alliances

Alliances and mergers draw on the capacity and potential of participants but they have a poor history of success. Surveys show that over 50 per cent of mergers and acquisitions fail to achieve strategic objectives - often disastrously. An often-quoted McKinsey and Company study of mergers between 1972 and 1982 (involving 200 of the largest US corporations) found increased value to shareholders in just 23 per cent. The greatest proportion, 33 per cent, was seen in relatively small takeovers of closely related businesses. The explanation seems to have attracted yet another analogy with poultry, although the meaning is quite different: ‘You don’t put two turkeys together and make an eagle!’ (unnamed economist quoted in Peters, 1987). (More on page 301 of Human Resource Management (Price, 2011)

Behavioural transformation

We noted earlier that the most difficult form of change involves modifying employees’ attitudes, behaviour and commitment. Initiatives may come about as a result of deliberate strategic planning. Frequently, however, the process begins with a vague feeling among board members that there is ‘something wrong’ within the organization even though they are uncertain as to what it might be. The feeling may be fuelled by customer dissatisfaction, failure of innovation, conflict between departments or financial difficulties. The popularity of guru ideas and the spread of HRM have encouraged many senior executives to look to their people in order to improve overall organizational performance, quality of service and productivity. (More on page 305 of Human Resource Management (Price, 2011)

There are instances of successful behavioural transformation in existing businesses, using a culture-change approach. Typically this involves a cascading process in which groups of interested employees (beginning with the 'top team') are asked to consider data from structured interviews and questionnaires in relation to the company's core values. Staff can then be encouraged to suggest improvements and innovations and to take responsibility for seeing them through.

Negative change.

Implicitly, anyone opposing change is viewed as negative. Often, however, change is a destructive process and the end-product is inferior to the original. This may be disguised by redefining quality requirements so that the lowering of standards becomes invisible or obscured. (...) A redefinition of quality coincides inevitably with a change in the nature and flow of information, making a true 'before and after' comparison impossible. The proponents of change are unlikely to present their initiatives as failures; anatagonists, on the other hand, will never be happy with modifications in methods they have cherished. In the absence of objective evidence, debate is reduced to political confrontation, with opponents of organizational change labelling new approaches as 'change for change's sake'. (...)

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