The process of M&A (Mergers & Acquisitions) represents a predominate form of expansion, growth and internationalisation. In the past, M&A research into the strategic fit producing optimal synergies between two corporations has largely focused on the financial, legal and economic aspects of any prospective deal. Only since the increased awareness of a nearly fifty percent failure ratei has there also been growing consciousness of HR’s significance in this equation, together with the cultural aspects of integration strategies, and the cultural factors for globalisation – in other words, the cultural fit!
In global terms, there is increasing acknowledgement and awareness of intellectual capital as a core economic resource, rating the significance of a company’s sum of human capital and intellectual property on a par with physical assets such as equipment, plant and inventories. Empirical evidence suggests that the management of cultural and human factors in a M&A implementation is crucial for smooth integration and overall positive outcome.
The project work discusses, investigates, and reports on research into the essentials of human resource due diligence and its cultural aspects in a cross-border integration. It focuses on human resource management and cultural integration during a M&A phase. It also points out specific findings on integration using and intensive HR due diligence approach. The issues of discussions are based on a wide range of literature supported by findings of empirical studies published internationally and the M&A knowledge of the management staff . The project intends to tackle the contrast between pre-acquisition motives and post-acquisition behaviour, and the subtle process of sound integration in terms of HR due diligence in general cross-border M&A. The work will touch on the measurement approaches of the field of human resource accounting (HRA), specifically the stochastic rewards valuation model for M&A, as a tools for the measurement of the value of the ROI on human capital.
The discussion on cultural integration includes cultural fit, cultural change and management across national cultures in mergers and acquisitions. Addressing these issues is designed to provide further insights for the two companies in question into the significance of HR due diligence in the run-up to any possible merger or an acquisition of ADMECO AG.
Inhaltsverzeichnis (Table of Contents)
- Abstract
- Preface
- The company - ADMECO AG
- Investor - Nordic Medial Supply (NMS) ApS
- Introduction
- Issues & Challenges
- M&A Facts
- Cross-border M&A Facts
- Context of the Study - Issues and Objective
- Reason for Selecting
- Outline & Structure of Project
- Limitation & Focus
- External Constraints & Conceptual Limitations
- Research Limitations
- Terminology
- Literature Review
- Introduction
- Merger & Acquisition (M&A)
- Types of M&A's
- Phases of M&A
- Reasons for M&A's
- Market Synergies
- Other reasons for M&A
- Cross-border M&A
- Cross-Border M&A Challenges
- Specifics of Cross-Border M&A
- International M&A's - Cross-Cultural Aspects
- Hofstede's Dimensions of Cultural Variability
- Cultural Issues
- Cross-Cultural Differences
- Success Factors
- Human Resources (HR)
- International HR Management – Impact & Practise
- HR Impact Home & Host Country Effect
- Human Resource Due Diligence within the Context of M&A
- Due Diligence
- Human Resource Due Diligence
- HR Due Diligence in M&A's
- Value of Human Resources
- Value of Human Capital
- Importance for an HR-Checklist
- Human Resource Accounting (HRA)
- Parallels with Corporate Evaluation Method
- The Human Replacement Cost Model
- Mathematical HRA Models
- Monetary Valuation Models
- Flamholtz's Stochastic Rewards Evaluation Model
- Hermanson Model
- Lev/Schwartz Compensation Model
- None-monetary Valuation Models
- Likert/Bowers Model
- Wucknitz Model
- Fitz-enz's HR Scorecard Model
- Monetary Valuation Models
- Conclusion
- Introduction
- Methodology
- ADMECO and its transformation
- Objective
- Data Collection Method & Analysis
- The Intend
- Sources of Data
- Primary Data Collection
- Secondary Data Collection
- Measurement Methods
- Gaining Access – Management
- Qualitative Approach
- Selection of Sample
- Analytical Approach
- Summary
- Findings
- New Monetary HRA Valuation Model
- Model Description
- Naming the New Model
- Valuation of the Model
- The Valuation Process
- Service State & Value
- Valuation Period
- Mobility Probabilities
- Interpretation of Results
- Economic Monetary Values - An Overview
- HR Replacement Cost at ADMECO
- Appreciation & Problems of the Stochastic Rewards Valuation Process
- M&A
- Cross-Border HR Issues
- Findings on Cultural Issues
- Economic Monetary Values - An Overview
- Conclusion
- New Monetary HRA Valuation Model
- Discussions & Recommendation
- Discussion/Comments on Available HRA models
- Stochastic Rewards Evaluation Model
- Hermanson Model
- Lev/Schwartz Compensation Model
- Likert's Model
- Resurgence of Interest in HRA
- The New HRA Model
- The New Model
- Valuation of the New HRA Model
- Testing the New HRA Model Validity
- Discussion of the Model
- Mathematical Statement of the New HRA Model
- The Other Simplistic Equations on Human Capital
- The Expert Expertise on M&A
- Cultural Issues
- Cultural Awareness and Communications
- Denmark & Switzerland
- Trade Barriers
- Discussion/Comments on Available HRA models
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This study aims to develop a mathematical valuation model for human resources within the context of mergers and acquisitions (M&A), specifically addressing cross-border M&A transactions. The objective is to provide a practical framework for valuing human capital during the due diligence process, highlighting the importance of integrating human resource considerations into M&A decisions. Key themes explored in the text include:- Due diligence in M&A
- Human resource valuation models
- Cross-border M&A challenges
- Cultural differences and their impact on M&A success
- The role of human resource accounting in M&A
Zusammenfassung der Kapitel (Chapter Summaries)
The preface introduces the context of the study, presenting ADMECO AG, the target company, and Nordic Medial Supply (NMS) ApS, the investor. The introduction defines the research problem, highlighting the challenges and facts surrounding M&A, particularly cross-border transactions. It outlines the study's objective, rationale, and structure, including limitations and data collection methods.
The literature review provides a comprehensive overview of M&A, including types, phases, and reasons for undertaking such transactions. It explores cross-border M&A challenges, highlighting cultural differences and the impact of international HR management. The review also examines different human resource due diligence frameworks and methodologies for valuing human resources, including human resource accounting (HRA) models.
The methodology section details the approach taken to collect and analyze data for the study, including the primary and secondary data sources used. It outlines the research methods employed, including the qualitative approach and sample selection process.
The findings chapter presents a new monetary HRA valuation model developed during the study. This model addresses the challenges associated with existing HRA models and offers a more comprehensive approach to valuing human capital during M&A transactions. The chapter also analyzes the results of applying the model to ADMECO AG, examining the economic monetary values and exploring cross-border HR issues and cultural considerations.
Discussions and recommendations highlight the importance of the new HRA model and its implications for M&A decision-making. The chapter discusses the limitations of existing HRA models and provides a detailed analysis of the new model, emphasizing its strengths and potential applications. It also explores the impact of cultural differences and the importance of cultural awareness in cross-border M&A transactions.
Schlüsselwörter (Keywords)
This study focuses on the critical aspects of human resource due diligence in M&A, particularly in cross-border transactions. Key terms and concepts include human resource valuation, human capital, cross-cultural differences, M&A challenges, and the development of a new mathematical HRA model. This research explores the application of human resource accounting in M&A, highlighting the significance of considering human resources as a valuable asset during the due diligence process.- Quote paper
- MBA Andreas Keller (Author), 2004, Human Resource Due Diligence within the Context of Mergers & Acquisitions, Munich, GRIN Verlag, https://www.grin.com/document/178455
