The Bank Merger

1. Evaluate the bank's approach to implementing the merger.Previously both banks have not been involved in a large merger.

The mergers or acquisitions that have taken place have been on a small scale. Thus, when Northeastern Bank ; Trust Company were merged with First Bank ; Trust Company things were very different. The process of implementing the merger was more complex. Both banks had centralized functions which needed to be consolidated. This would be a difficult task.Committees were formed which would focus on specific areas and the business plan revolved around the theme of "Your Southern New England Bank.

" The banks decided to merge the support functions which would result in a consolidation of all the information and files that were kept by each bank. All the committees developed focused on their area. In general the approach adopted by both the banks was weak. Even though both banks realized the need for communication and cohesion of cultures, this was not handled well. There was a difference in the way each bank dealt with its employees among other things.

The approach was narrow and did not consider the larger picture.2. Are there human resource issues other than those listed by the Human Resource Steering Committee that emerge when two companies merge?The Human Resource Steering Committee listed down some of the main issues that they will have to deal with when implementing the merger. These include: staff reductions and transfers, maintaining employee productivity during the merger transition period, communication flow to employees to minimize unwarranted rumors, socializing employees to Northeastern's culture and philosophy, designing appropriate training programs and balancing EEO / Affirmative Action goals.

Apart from these issues there are other issues which need to be looked after when the two companies merge. These include a briefing of the employees as to why the companies are merging, ensuring that the employees are participating in the merger process, this increases the acceptance level of the employees. Key positions have to be identified and the managers at these key positions have to play an active part in ensuring that the merged organization functions properly.3.

Do you agree with Ramsey's comment that a successful merger is 10 percent planning and 90 percent communication? Why or why not?I agree with Ramsey’s comment that a successful merger is 10 percent planning and 90 percent communication because when companies merge it is not just the merger of the company but also of the employees that work within the company. All organizations have a culture and during a merger it is the culture of the organization which needs to fit together. Without effective communication, the employees will not understand the merger and will retaliate which will eventually lead to an unsuccessful merger.4. Develop a plan of action for handling the projected labor surplus. What factors need to be considered?The projected labor surplus can be handled by categorizing the employees by their performance.

Those employees which fall in the top two categories should be held on to while the other employees can be laid off by offering them a layoff package and helping them find jobs in other organizations. These employees can be referred to other banks by the two banks, i.e. First and Northeastern.

The factors that need to be considered when dealing with a labor surplus is the performance level of the surplus employees, how are these employees benefiting the company, does it cost more to keep them or lay them off, and the time period that the employee has worked for the organization.5. How should the Human Resource Steering Committee handle the needed staff reduction in the Trust Center?The Human Resource Steering Committee should handle the needed staff reduction in the Trust Center by effectively communicating with them. Sending them a memorandum will not make is a smooth process.

The committee should hold a meeting where they can listen to the queries and the complaints of the employees after they have told them of their decision. Also, the committee should provide alternatives to the employees. They should let them know if they will be provided any benefits during the period of unemployment, i.e.

the time that they are looking for another job.Those employees which are near to the retirement age can be given a Golden Handshake. Those who are young and have just started can be helped in finding another position or job at another company.