BACKGROUND

Yummy Company is producer and marketer of fruit juices, packaged dried

fruit and canned jams made from all natural exotic tropical fruit.
Established since 1960 and primary plant is located in Tagaytay City,
Cavite.

It distributes locally and exports dried fruits and jams to Japan.

In 1990, Yummy bought 2 small canning companies in Southern Luzon.
This acquisition resulted to problems on lack of performance management
system, formal pay scale, hiring practices that allowed members of the
family, absence of training facilities, inconsistent enforcement of employee
discipline procedure and high incident of theft.

YUMMY COMPANY GOES TO DAVAO

TIME CONTEXT:
2000

VIEW POINT:
CEO Nicholas Santiago &
VP-HR Mrs. Dela Cruz

YUMMY COMPANY GOES TO DAVAO

CENTRAL PROBLEM
Managing people related issue result by company
expansion.

STATEMENT OF OBJECTIVE
MUST: Smooth company expansion.
WANT: Want fast and smooth transition.

YUMMY COMPANY GOES TO DAVAO

Negative
implication of the
merger.

STRENGTH

Domestic and
International
Market network.
Productivity and
efficiency in
operations.

WEAKNESSES

Labor unrest.
Cultural diversity.

OPPORTUNITIES

THREATS

AREAS OF CONSIDERATION
Existing plant and
facilities.
Manpower and
technology.
Experience in
people related
issue on
merger/expansion.

YUMMY COMPANY GOES TO DAVAO

ALTERNATIVE COURSE OF ACTIONS

1. Diverse market network.

2. Improved productivity and
efficiency in canning
productions.
3. Governing rules and
company policy for control.
4. Formal pay scale which will
benefit the employees

NEGATIVE

POSITIVE

1. Proceed with the expansion to both Davao & Japan.

1. Cultural difference.
2. No guarantee transition will
be smooth.
3. May result to labor unrest.

YUMMY COMPANY GOES TO DAVAO

ALTERNATIVE COURSE OF ACTIONS

1. No people
management issue to
resolved.
2. Save on possible
lost.

NEGATIVE

POSITIVE

2. Not to proceed with expansion.

1. No growth in market.
2. No improvement in
production and
efficiency in
operations.
3. No profit increase.

YUMMY COMPANY GOES TO DAVAO

ALTERNATIVE COURSE OF ACTIONS

1. May diverse market

reach in Japan.
2. Increase market share in
Japan.
3. Possible increase in
profit.

NEGATIVE

POSITIVE

3. Expand business in Japan only.

1. Cultural differences.
2. Legal requirements.
3. Increase in demands may
not be accommodate by
existing operations.
4. No assurance it will be
successful.

YUMMY COMPANY GOES TO DAVAO

ACA 1

RECOMMENDATION

Proceed with acquisition

YUMMY COMPANY GOES TO DAVAO

ACTION PLAN
Person
Responsible

Activities

Time
Frame

CEO & VP HR

Strategic Planning:
Degree of involvement of HR (directors) of acquired company in negotiation
process.
Cultural Differences
Conflict of Management styles
Diversity in Managing Human Resource, HR policies, procedures, and Hiring
process
Failure to manage change resulting to loss of employee morale and productivity
and key employees
Diversity of performance management systems
Downsizing of workforce

7 Days

VP HR

Pre-acquisition:
1.HR should be involved in the negotiation process in order to understand and
map out the culture of both companies and if necessary, develop a culture that
fits the merged entity.
2.HR will develop a new Organization Chart and detailed evaluations of the
competencies of employees to link their roles and responsibilities to the new
organization chart.

30 Days

VP HR

I.
Cultural Integration:
Ask for guidance on cultural issues. Understand that cultural differences can
exist within the same country
Have a strategy for overcoming cultural conflicts. Remain alert to the symptoms
of the post-deal cultural clash
Steps:
1. Determine degree of organizational integration
2. Assess organizational behavior
3. Develop change hypothesis
4. Determine drivers of behavioral change
5. Implement change
6. Measure and reinforce change outcomes

30 Days

YUMMY COMPANY GOES TO DAVAO

ACTION PLAN
Person
Responsible

Activities

VP HR

II. Integration of Management styles.

Existing Management style of Yummy Corporation will be applied to the newly
acquired company in Davao and in Japan. The regional plant in Davao would still
be headed by the existing leader. However, he should learn a participative type
of management where subordinates are included in discussions. Greater results
will be achieved if more people will contribute ideas to the success of the
company.

VP HR

III. Integration of Human Resource policies and procedures.

Since the Davao branch doesnt have a clear and formal HR policies and
procedures, Yummy Corporation should adopt its existing policies. An HR staff
should be placed in each regional area in order to give venue for resolution of HR
issues. HR should also go online in order to deliver fast response/actions to any
of its regional areas.

VP HR

IV. Change management.

Change management can be avoided by solving them as early as before the
acquisition is finalized. Reduction of workforce due to the acquisition of new
equipment in Davao and other HR related issues can be insisted by Yummy
Corporation that they be settled as a pre-requisite to close the deal. Yummy
should involve the management of the acquired company since they knew their
people more. Bringing another leader to the acquired company might create
resentment.
The following should be done by Yummy Corporation:
Communicate with employees on the necessity of acquisition
Explain how it will benefit them
Establish a clear and visible tie between change and business improvement.

Time
Frame

ACTION PLAN
Person
Responsible

Activities

VP HR

V. Downsizing of workforce.
Since the acquisition of equipment would reduce number of persons in the
company, it would be best to inform them of such downsizing ahead of time.
Selection procedures of employees to be retained should be communicated so
that the employees would be aware of where they stand. The HR should draft
retrenchment packages of those who will be eliminated. Probationary period of 6
months whether or not the equipment is operational would give employees the
chance to improve themselves.

VP HR

VI. Communication
1.There should be a focal person of the acquired company of whom employees
could talk and seek clarifications, and answer their queries. This person should
have easy access to the Senior Management team to get their views clarified.
2. A strong communication system should be put in place. Plan of actions should
be communicated to be clear.
3.If needed, external person or team could be used to act as neutral entity.

VP HR & FINANCE

VII. PAYSCALE
1.Organizational capability- whether or not the company has capacity to pay.
2.Work intellectual, working condition, decision-making, problem solving, skills
3.Employee education, experience, skills
4.Legal implications Labor Code in the Philippines, PD 4425.Market and
country difference

Time
Frame