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A Merger is a legal transaction in which two or more organizations combine operations through
an exchange of stock. In a merger only one organization entity will eventually remain. An
acquisition is a purchase of one organization by another. In recent years, there were quite a few
acquisitions in which the target firms resisted the take-over bids. These acquisitions are referred
to as hostile takeovers. It is natural for the target organization’s management to try to defend
against the takeover. Although they are used synonymously, there is a slight distinction between
the terms “Merger” and “Acquisitions”.

When a company takes over another to become the new owner of the target company, the
purchase is called an acquisition. For the legal angle, the “target company” ceases to exist and
the buyer “gulps down” the business and stock of the buyer continues to be traded.

It is believed that mergers and acquisitions are strategic decisions leading to the maximization of
a company’s growth by enhancing its production and marketing operations. For example, it is
recommended that mergers and acquisitions are indented to:

 Limit competition

 Utilized under-utilized market power

 Overcome the problem of slow growth and profitability in once own industry

 Gain economies of scale and increase income with proportionately less investments

 Circumvent government regulations

 Reap speculative gains attendant upon new security issue or change in P/E ratio

 Create an image of aggressiveness and strategic optimism , empire building and to amass
vast economic power of the company

 Provide an opportunity to leverage skilled and experienced manpower available with both the companies to the optimum potential.  Enable optimal utilization of existing resources through improvement in load factor and yield on commonly serviced routes as well as deploy ‘freed up’ aircraft capacity on alternative routes. erstwhile Indian Airlines Limited and Air India to form a new entity namely NATIONAL AVIATION COMPANY OF INDIA LIMITED.  Potential to launch high growth & profitability businesses (ground handling services. It will provide an opportunity to leverage combined assets and capital better and build a stronger sustainable business. the merger will  Create the largest airline in India and comparable to other airline in Asia  Provide an integrated international/ domestic footprint which will significantly enhance customer proposition and allow easy entry into one of the three global airline alliances.  Provide a larger and growth oriented company for the people and same shall be in large public interest. .)  Provide maximum flexibility to achieve financial and capital restructuring through revaluation of assets  Provide an increased thrust and focus on airline support businesses. capabilities and infrastructure. along with a comprehensive transformation program. maintenance repair and overhaul etc.  Provide an opportunity to fully leverage strong assets.e.PROBLEM DEFINITION The merger of both the companies i. is imperative to improve competitiveness.

or • don't understand the change and its implications. increase stress or involve risk. It may arise from a genuine understanding of the change or from misunderstanding. People typically avoid situations that upset order. threaten their self-interests. And when an organization has had a succession of leaders. or even almost total ignorance about it. What worked in the past is good enough. People don't like change because they don't like being changed. assuming that he or she is "just like all the others" Calls for sacrifice and self-discipline are met with cynicism. employees will keep doing what they've always done. People fight against change because they: • fear to lose something they value. most people are reluctant to alter their habits. When faced with changes to the status quo. resistance to change is even stronger. and knee-jerk resistance PEOPLE SUPPORT CHANGE WHEN . people usually resist initially. WHY IS CHANGE SO HARD? First of all. A legacy of disappointment and distrust creates an environment in which employees automatically condemn the next turnaround champion to failure. or • don't think that the change makes sense. The threat may be real or it may be just a perception. Resistance emerges when there is a threat to something the individual value. skepticism. or • Find it difficult to cope with either the level or pace of the change. fear and resistance to change follow – often despite its obvious benefits. in the absence of a dire threat.RESISTANCE TO CHANGE Most people prefer predictability and stability in both their personal and professional lives. When change comes into view.

• They believe that the change makes sense and is the right thing to do. While Indian Airlines operated in the domestic sector. Hence it was natural that the resistance to the change process would not be identical owing to these differences. RESEARCH METHODOLOGY Management questions are basically restatements of the management dilemma in question form. • They expect a new challenge as a result. • They expect that it will result in some personal gain. Air India was in the international sector. SCOPE OF THE STUDY The target segment of my study included the employees of the two organizations across different departments. • They respect the person who is championing the change. coherence is required therefore it was essential to compare and study the employees’ perceptions of both the companies separately and as a whole. Such a study would help in identifying problems unique to each company as well as each department and help in devise specific plans to minimize the resistance in the organization. Keeping in mind all this. There existed a difference of opinion over the reason for the merger in the 2 organizations. Each has been affected in a different way. • They believe it is the right time for the change. Now that it is a merged organization. the MANAGEMENT OBJECTIVE of the company was: To determine ways to minimize the resistance of the employees towards the merger and therefore make it an acceptable change process. . • They were given an opportunity to provide input into the change. The merger was between Air India and Indian Airlines each having different work cultures and market operations.

magazines and tertiary sources like the internet to find out about the latest happenings in the aviation sector is utilized.” • “To determine. This study will be extended to employees of both Air India and Indian Airlines. Primary sources are original works of research or raw data without interpretation or pronouncements that represent an official opinion or position. The data generated were both nominal as well as ordinal. secondary sources of data like the newspapers. In addition a lot of primary sources of data. the methodology of which is explained in the next section. Based on the information collected at this stage it is decided to proceed with the construction of the questionnaire. It is an extremely sensitive topic and the employees’ perspective (which was the need of the hour) was not taken into consideration. . so as to see if there is any variation amongst responses of people in both the organizations. why mergers and acquisitions are required” • “To study what are the factors leading to mergers etc.RESEARCH OBJECTIVE A research question is one which best states the objective of the study. By asking the right research questions I arrived at my research objective which is stated as follows: • “To understand the employees’ perspective of the merger and analyze the factors responsible for resistance to the merger. Secondary sources are interpretations of primary data where as tertiary sources aids to discover primary or secondary sources or an interpretation of a secondary source.” The research objective was formulated keeping in mind that the merger was a current happening in the organization.

Judgmental sampling is a type of non probability sampling in which the researcher arbitrarily selects sample units to conform to some criterion.A single open ended question will be designed keeping in mind the difficulty in analyzing them as well as their usefulness in conveying information. SAMPLING TECHNIQUE AND SAMPLE SIZE: The sampling technique used for data collection is judgmental sampling which is a type of non probability sampling. non zero chance of selection. Air India and Indian Airlines. In addition the study is needed to find out whether there was a difference in perception of the employees’ of the different departments as well as the two organizations i. Non probability sampling is an arbitrary and subjective sampling procedure where each population element does not have a known. The objective of this research is to collect as many samples as possible whose responses reflected that of the majority of the population. This technique will be used keeping in mind its simplicity and accuracy. non zero chance of being included. DATA COLLECTION The main objective of the study is to understand the employees’ perspective on the merger. A clear study of this is needed to understand the reasons for the resistance to the merger.e. randomized procedure that assures that each population element is given a known. After the initial preparation of the questionnaire. . Having chosen the sampling technique I had to decide on the sample size. This task will reveal that whether some minor changes is required in the questionnaire. a pilot survey will be conducted on 20 respondents to study the short comings of the questionnaire. Since non probability sampling met those requirements and also because of the cost and time constraints it is chosen over probability sampling. Probability sampling is a controlled. Hence the data collection is planned in such a way that a number of samples from different departments collected.

Issue 2 Database: Business Source Premier 2.. Limitations of the Study: 1. 3.Garrison Wynn http:/www. Changing minds and persuasion. 100 each of Air India and Indian Airlines. The major limitation of the study is that the results will be skewed towards the employee perception in Northern region only.rationale for resistance http://www. David A. Also they might have been a bit apprehensive and hence not given the exact responses. a lot of them may refuse to fill in the questionnaire.html . 83. This was done on the advice of the industry guide as that sample size would be representative of the organization. Change Through Persuasion . Chapterization Chapter 1: Introduction Chapter 2: Review of Literature Chapter 3: Organizational Profile Chapter 4: Research Methodology Chapter 5: Data Analysis and Findings Chapter 6: Conclusion and Suggestions References The shortage of time is the major limitation to carry out such a study. 2./managingchange. Vol.changingminds. Also owing to the time constraints a larger sample size would not be possible. By: Feb2005.htm 3. Michael A. As the level of fear and mistrust in the employees may be very high and the scope of the project misunderstood. 00178012. Roberto. Harvard Business Review. Change management.It is advised to sample about 200 employees..

Cummins.Understanding and Overcoming Human and Organizational Barriers.html 7. Organizational Development and change. David.12manage. Thomas Publications .change without migraines http://www. 22/07/07 http://www. Worley.Change management resistance to change .com/methods_kotter_change_approaches. 13. D.air france-klm. AT&T http://nysfirm. March 24.PIB press release.htm 8. Organizational behavior and analysis.4.htm 6. Press information bureau. Worldwide Member Firms 2005 Review: Air France/KLM — A complex merger http://www. Christopher. 14.rediff.htm 5. Taking Advantage of Resistance to Change. Aysen Broadfield. Overcoming Resistance to Change: by A. 9. Resistance to Change: Understanding and Overcoming Human and Organizational Barriers http://www. Schuler. Maurer and associates. http://www.htm 10. Indian merger work? Business Standard. Edward Amoroso. PIB Press Release.An integrated approach. Coping with challenges of organizational change April 2007 Dr. Psy.h tml 12. Edwards Adison Wesley Publication. Will Air India.J. 2006 http://www. J. 1998 By: Derek Rollison. Change management article human resources and organizational change. 12 manage the executive fast track http://www. G.7th Edition 2004 By: Thomas.