HR Difficulties after Compaq Acquisition
Mergers and acquisitions have important implications for the human resource (HR) department, some of which may adversely affect the smooth operations of the company and its strategic plan (Schuler & Jackson, 2001). The acquisition of Compaq by HP, for example, presented HR professionals with integration challenges as they had to develop a cultural and organizational structure that was conducive to employees from the two companies.
The HR department was also faced with difficulties in integrating HR policies, aligning compensation programs to fit employees from the two companies, dealing with cultural differences initiated by the acquisition, aligning information systems with the business strategy, and dealing with stress and feelings of anxiety among employees of the acquired firm. If not adequately addressed, these difficulties have the capacity to trigger adverse organizational and employee outcomes such as suboptimal productivity and performance, management problems, high staff turnover, and low employee morale and motivation (Schuler & Jackson, 2001).
Balancing Low-Cost Mandates with Innovation Aspirations
As a benefits manager at HP, it is important to develop and implement HR strategies that will be effective in enhancing alignment among diverse groups of employees within the company with the view to ensuring that the new entity is able to achieve its specific competitive objective. Owing to the fact that the two companies pursued different strategies to achieve their competitive advantage, it would be imperative to develop an approach that improves the company’s innovation capability and lowers costs through a combination of low-cost-oriented product development, first-to-market benefits, and high product functionality (Bengtsson, Haartman, & Dabhilkar, 2009). Such an integration strategy must ensure that enough resources and personnel are committed toward ensuring that the new outfit is able to maintain its innovation-oriented, high product functionality, and fast time-to-market capabilities while keeping product development costs at a sustainable level.
Structuring Items
Communications can be structured around technology platforms that encourage employee interactions and collaboration with the view to spurring innovation, efficiency, and knowledge-sharing. Such technology platforms are not only critical to innovation by virtue of allowing many people to work together toward developing innovative solutions, but are also cheaper compared to traditional communication approaches (Ting, 2015).
Cost savings or controls can be developed around a feedforward control mechanism that provides a basis for control at the point of action and defines the centers of responsibility in a way that allows employees some leverage to experiment with innovative ideas and report their progress using the laid down procedures and standards. New design issues can be effectively handled through the use of a systems approach to product design and development, which incorporates a holistic and sustainable design approach in the domain of product design (Luthe, Kagi, & Reger, 2013). This approach is known to lower production costs and enhance the innovative capacity of employees to come up with new ideas aimed at improving product quality.
Challenges
Lastly, the challenges of mixing a low-cost strategy with an innovative strategic orientation include the inability of companies to continue with innovative practices at a lower cost, lack of adequate resources to drive the hybrid strategy, personnel issues as many innovative employees want to work for companies that allocate huge sums of money to product design and development, and misalignment in business and strategic objectives. These challenges need to be sufficiently addressed if the hybrid strategy involving low-cost and innovative approaches is to succeed in enhancing competitive gains for the company.
References
Bengtsson, L., Haartman, R.V., & Dabhilkar, M. (2009). Low-cost versus innovation: Contrasting outsourcing and integration strategy in manufacturing. Creativity and Innovation Management, 18(1), 35-47.
Luthe, T., Kagi, T., & Reger, J. (2013). A sustainable approach to sustainable technical product design: Combining life cycle assessment and virtual development in the case of skis. Journal of Industrial Ecology, 17(4), 605-617.
Schuler, R., & Jackson, S. (2001). HR issues and activities in mergers and acquisitions. European Management Journal, 19(3), 239-254.
Ting, C. (2015). Business contingency, strategy formation, and firm performance: An empirical study if Chinese apparel SMEs. Administrative Sciences, 5(2), 27-45.