Winning Hearts and Minds of Workers and the Trade Union

PepsiCo acquires Duke & Sons Ltd.

Presented by Group D9

Issues
Absence of business-like vision or model

Consequences
Negatives

Result focused task managers

Low motivation inspite of higher satisfaction among workers Absence of alignment with organizational goals Workers were over protected by the union

Lower productivity

Low control on workers

Role & work allocation unclear

Inconsistence in quality

Unskilled workers, lack of T&D

Work flexibility without accountability

Union gained an upper hand on the management

No recruitment policy, incentive structure and career planning

Positives
High goodwill and trust Best employer brand

Post merger business goals Minimize cost of production/increa se production efficiency Structured policies, practices and procedures Attaining global quality standards

Phased approach to meet business goals Increased productivity of workers and manpower rationalizing Reengineer operations to ensure quality production Eliminate restrictive practices Aligning unions interests with those of PepsiCo

Merger

Need for cultural integration Justify the need for acceptance of PepsiCos business culture and values Remove apprehensions of workers towards MNCs Realign the goals of workers with that of company Build trust among workers to enable commitment towards work

Systems Quality oriented mind set created gradually Two-phased approach to quality: - Visible changes in physical infrastructure - realization of importance of quality - Introducing new technology and remaining patient to wait for employee acceptance Processes and procedures Managing the problem of skill shortage through training Field visits to convey the importance of quality and customer expectations Bringing role clarity Structured people management practices Bringing performance focus Developing multitasking skills Eliminating Restrictive Practices Strict disciplinary action against indiscipline Spiritual atmosphere created bringing down alcoholism

Reporting systems Give and take relationship with trade union. Leverage direct communication with workers as a pressure tactic Positive image created among workers Communication with union kept open to ensure transparency

The make them like us mantra for mergers and acquisitions is not the best approach to manage the merger. There are additional criteria for deciding the extent of change required, which would depend upon the mode of value accrual

Some additional criteria are as follows: Need for Strategic Interdependence

Depends upon the strategic objective of merger
Relates the degree of strategic interdependence that needs to be

established between the two companies

Need for Organizational Autonomy
The extent to which it is necessary to maintain the autonomy of

the company in order to preserve its distinctive skills This extent of Autonomy would be an outcome of both, need from business strategy and need from the organizational point

Symbiosis High strategic interdependence is required for value creation Need of autonomy is high

Preservation Need for strategic interdependence is low A high degree of autonomy for value creation

Acquisition Integration Approaches Absorption Strategic interdependence is high Need to preserve the boundary or identity of the organization is low Holding Need for strategic interdependence is low Need for preserving the autonomy is also low

Action in the Integration Plan

Contingency Analysis and Planning

Communicati on

4C Model

Collaborate

Co-Opt

Pre Merger
Change Management Attrition Control Man Power Forecasting Internal/External Marketing

Post Merger
Avoiding strikes Direct communication with workers threatened union leaders Maintain open and transparent relationship with union leaders, and Acknowledge power of Unions- communicate through them Introducing technology Workers are scared and skeptical of technology Allaying fears through communicating benefits, training and gradual

introduction of technology
Culture Employees feel strong attachment to old traditions Preserve these traditions

Thank You