The Merger of Inmarko and Unilever

Merging two separate entities has never been an easy task. The integration of different cultures into one philosophy poses some risk that can have adverse effects on the resources of the acquiring firm. Failure to reach the expected synergy levels compromises the company’s ability to hit top performance metrics. According to Mohibullah (2009, 255) noted that most mergers experienced a dip in profitability due to conflicts arising from cultures that are not sufficiently integrated. The organisation that decides to undertake integration should put serious consideration to people issues. The primary undoing of many firms gives much credit to financial matters than the task of combining two or more sets of the workforce. Human resource is critical in the operations of any enterprise and when it is not prioritized; the business crumbles. The process of change is quite challenging and complex. To avoid crashing into cultural clashes, company managers must plan adequately for the integration mission.

            In this section, we describe the plan for the integration of the corporate philosophies of Unilever and Inmarko. The acquiring firm should stipulate methods of managing the operational and monetary features of the deal. They must keep track of the progress of the merger in achieving set objectives and hold managers to the task. A lapse in concentration may lead to a situation where the executives watch helplessly as the company disintegrates. Fortunately, Unilever can utilise the cultural integration tools to close the gap between Inmarko and the firm’s policies. The well-articulated plan is designed to evaluate the speed and efficiency of employees in adapting to new behaviour and core values.

The Plan

            The plan aims to provide the acquiring firm with the necessary control over outcomes of the merger and to lower the possibilities of failure. The framework is categorised into four fundamental steps discussed below.

Stage 1: Setting the cultural integration agenda

The foundation of the corporate culture of any organization is the beliefs, core values and behaviours that are engraved in the company’s mission and vision. Unilever should define the cultural target precisely. The objectives should be based on behavioural norms that stipulate how employees of the savvy acquirers are to conduct themselves. The required should include the competitive framework of the firm to guard the merger on how the corporation will develop an advantage over the rivals in the same industry. Also, the executives should set the operating model of the enterprise. It is the blueprint which specifies how to perform duties, accountabilities and the general structure of the firm. The top executives of the new company must be involved in laying the corporate framework because it is a delicate process whose result will determine the success or failure of the investments. The process involves decision making on whether to acquire some part of the Inmarko’s culture or to transform the firm to conform to the behaviour of Unilever. The management should make these choices based on suits their interest better. For instance, if Inmarko has the best sales and marketing team then Unilever will do better if they assimilate the culture of the acquired company’s sales department.

Communication across all levels of the merger is crucial to developing a working strategy (Kotter, 1995, 67). Everyone’s input is essential in coming up with policies that steer the firm to profitability. The people orchestrating the change process must explain to the junior the reasons behind the new conditions. According to Erkkilä and Valpola (2011, 107), satisfied employees are more likely to give better service to the attainment of set goals. When the workforce owns the plan, then it is expected to be successful. Risberg (2003, 23) noted that effective communication is crucial in conveying information that ensures the achievement of the mergers desired outcomes.

Stage 2: Diagnose differences

Unilever and Inmarko were separate entities before the acquisition process. Firms have varied cultures even for those in the same industry. After deciding on the values they require, the change team must perform a diagnostic study to obtain the level of mismatch between the desired culture and the current strategies of the individual companies. The groups tasked with ensuring a smooth transition should conduct interviews to determine the difference in leadership styles and priorities, employees’ acceptable behaviour, consumer perception of each firm, and variations in performance of duties. Some other tools include accountability mapping to assign responsibilities to each employee in the two companies; heat maps to reveal the most crucial tasks and, to examine the flow of work in each of the companies.

The diagnosis should allow workers to express themselves exclusively on issues related to the working conditions, the preferences, priorities, and areas they would like the new management to improve. The results of these discussions will reveal any critical differences and possible situations that require immediate attention before they can adversely affect the successes of the company. According to Peng (2009, 285), many mergers failed to meet the initial targets and expectations of the top executives because they did not understand the difference between the organizations involved. Hubbard (1999, 13-17) also cites insufficient information gathered inappropriately as another reason why most of these arrangements fail to live to their billing. Corporate culture is broad and must be given the necessary attention. Change managers should not just flip over the vision and mission statements then purport to understand what is engraved in another corporation’s practice (Schein, 1999, 25-26).  According to Kotter (1995, 59), to implement the efficient transition, a broad-based evaluation is essential to determine obstacles, structures, and risks that could undermine the process. A significant recipe for failure is conducting external scrutiny that does not provide the deeper understanding of the behaviour of a firm.

Stage 3: Defining the new culture

The senior team executing the acquisition of Inmarko should then diagnose and identify any prospective gaps that may hinder the achievement of a successful combination. The possible risks should be mitigated beforehand. In this stage, the merger’s top bosses are expected to display the new culture they are setting. The behavioural must be witnessed not only in writing but also in the actions of the managers, and the employees will comply.  Because Unilever is an FMCG company, the new merger should instill a culture that allows the sales representatives to relate well to the distributors. The distributors should be informed about consumer patterns and expectations, as well as, the underlying financials of the business. There is need to create a bond between all the parties in the marketing line to increase products sales of the merger. One of the two companies in the merger arrangement that makes excellent deals will be used as the model scenario while the other firm’s sales employees will be asked to assimilate their counterparts.

Unilever and Inmarko should also organize events to co-create the culture of the merger. A simple way of creating a unifying philosophy is to arrange for workshops where employees from the two firms meet, socialize and discuss various issues related to their duties. Unilever and Inmarko should make the two groups work together to develop the same cultural attributes. During such sessions employees can quickly learn from each other and borrow knowledge that could be essential. The strategy should also involve workers incentives and how the merger can improve the welfare of the teams to improve their productivity.

Stage 4: Sustain and evaluate progress

The management then develops a series of measures to monitor the progress towards the new organization. Once the indicators are in place, the human resource department should create a welfare system which incorporates incentive, promotions, and rewards for good performance, as well as, punishment for poor quality work. For example, employees that exceed sales expectation should receive rewards while those that provide low quality customer service be punished whenever complaints arise. Customer feedback will be very crucial in evaluating the change in behaviour to determine the direction which the culture transition process is taking. Kotter (1995, 61) advises that this stage should involve consolidating the gains made and identifying new areas that require change. The transition process is dynamic reinvigoration through hiring the right personnel and setting more objectives.

Cultural Attributes for the new Organization

Following the discussions above, it is evident that the new merger is better suited with the combined model. The new company will have some attributes of Unilever and other features from Inmarko. Since the two enterprises involved produced commodities that are unique to each other, the new organization should not change the product brand names. The new firm will then be able to reap from regions where each entity had established a brand without compromising the names with the introduction of fresh ones. The management of the merger should be constituted afresh and only the managers that consistently posted better results allowed to run the resultant company. The two mission and vision statements from Inmarko and Unilever should be scrapped off and the ones that accurately present the corporate culture of the combined organization be written. These two declarations are critical in stirring the levels of commitment and priorities among employees, relying on the old ones to steer the merger would not be appropriate because of the cultural transition. Also, there should be a partial integration of business processes. The areas of operations that were considered weak during the diagnostic stage should be aligned to policy framework while the rest of the sector that had a clean bill of health should be allowed to operate. For instance, the separate sales teams should be incorporated into a successfully proven culture. The new set of attributes is designed to eliminate the possibility that the merger will be adversely affected by either the problems that were common with the acquirer or the acquired firm. They are specifically designed to match the required synergy level that will enable that separate workforce to combine seamlessly into the new structure.

Benefits of Effective Corporate Structure and Change

            The ultimate reason why companies change their culture is to improve profitability and efficiency. The only sure measure to determine the effectiveness of any structure is the ability to generate increased sales and profits. Company structure if well-worked can serve as a competitive tool that creates the advantage over rival businesses especially in a highly competitive industry.  A change in the structure, especially in the case of the Inmarko and Unilever merger, brings only two possibilities of either eroding the competitive advantage or making it stronger. The change process is critical and, therefore, must be handled with care and professionalism. According to Rao (2003, 85), the structure of the firm provides the practical strategy and is more result oriented. It stipulates what to expect of each employee in every specific division of the company and ensures that every member is contributing towards the set targets. The corporate strategy, if well designed, should motivate employees. Companies with successful policies have an advantage over the rivals. They experience increased output from human labour and do not spend too many resources correcting messes that are created by workforces that are not committed. Ekvall (1996, 105) showed that bureaucratic organizational structures affected the innovation levels. When the company fails to invent new methods of producing cheaply and better marketing methods, the chances that such an organization will withstand marketing competition are limited. In the modern world, enterprises must continuously discover solutions to the market problem to gain an advantage over rival businesses.

             Amabile (1998, 77) illustrated that the corporate structure is closely related to the level of active communication in the firm. He argued that frameworks that do not support adequate conveyance of messages among different levels of employees are mostly unsuccessful. Workers act on the information they receive from their colleagues; if the system hinders the issuance of instructions, feedback, and guidelines; the company is likely to fail. The importance of internal cohesion in organizations cannot be underestimated.  Ekvall (1996, 105) found out that companies which changed the corporate structures without studying the workforce traits suffered from lack of agility and adaptiveness. When employees fail to adjust to the new culture, it becomes difficult to guarantee smooth flow of work. For instance, in the Unilever and Inmarko case, failing to adapt to the fresh sales strategies may mean that the merger surrenders market share to the competitors. The people charged with the responsibility to execute change must perform thorough research before developing the best marketing strategy. Otherwise, the new company is likely to experience increased labour turnover rate which is not healthy for the stability of the merger. Kotter (1995, 59) stipulates significant steps that are critical to achieving a successful transition. Unilever and Inmarko top management should emphasize the need to adequately research every proposal before making the final decision. The two companies have a significant market share that should not be surrendered to the rival businesses just because someone failed to ascertain that the due process is followed.

References

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Hubbard, N. 1999. Acquisition strategy and implementation. MacMillan Press: London.

Schein, E.H. 2010. Organizational Culture and Leadership. Jossey-Bass Publishers: San      Francisco.

Kotter, J. P. 1995. Leading Change, Why Transformation Efforts Fail. Harvard Business          Review, 73, 59-67.

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