Winning Hearts and Minds of Workers

and the Trade Union

PepsiCo acquires Duke & Sons Ltd.

Presented by

Group D9
 Issues Consequences

Negatives
Absence of
Result focused Low motivation
business-like
task managers
vision or model inspite of higher Lower
satisfaction productivity
among workers
Low control on Role & work Absence of
workers allocation unclear alignment with Inconsistence in
organizational quality
goals

Unskilled Work flexibility Workers were Union gained an

workers, lack of without over protected by upper hand on
T&D accountability
the union the management

No recruitment Positives
policy, incentive
structure and High goodwill Best employer
career planning and trust brand
Post merger business
goals Phased approach to meet
business goals
• Minimize cost of
production/increa • Increased productivity of
se production workers and manpower
efficiency rationalizing
Merger • Reengineer operations to
• Structured
policies, practices ensure quality production
and procedures • Eliminate restrictive
• Attaining global practices
quality standards • Aligning unions interests
with those of PepsiCo

Need for cultural integration

• Justify the need for acceptance of
PepsiCo’s 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 Preservation
• High strategic interdependence is • Need for strategic interdependence is low
required for value creation • A high degree of autonomy for value
• Need of autonomy is high creation
Acquisition Integration
Approaches
Absorption Holding
• Strategic interdependence is high • Need for strategic interdependence is low
• Need to preserve the boundary or • Need for preserving the autonomy is also
identity of the organization is low low

Contingency
Action in the Integration Plan Analysis and
Communicati
on
Planning

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