Human resources in mergers and acquisitions : The roles and evaluation of the HR function in cross-border M&A

This study discusses the role and responsibilities of the human resources function in merger and acquisition processes. The objective of this study is to analyze the HR function during the M&A process. The objective of this study was further divided into three sub-objectives of looking at the responsibilities and means of HR to affect the M&A during its different phases, identifying different roles for HR in the process and observing the contribution that HR has on the value creation process. The theoretical background of the study includes research from the fields of HR and M&A concentrating especially on research of HR within the context of an M&A. The framework is based on the three phases of the M&A process, the pre-acquisition, deal phase and post-acquisition. The empirical data for the study was gathered from interviews from HR professionals involved in cross-border M&A’s for Finnish multinational companies. The five semi-structured interviews were conducted between November 2016 and May 2017. According to the main findings of the study the tasks for the HR function depend on the deal in question. The importance of early involvement in the due diligence phase was emphasized and made clear that HR should be involved in the planning of the deal and not just as an information provider. The focus on communication in an M&A was mentioned by all the five interviewees and that this responsibility falls largely on the HR function. The amount of information was a key issue and the time of disclosing it. The integration process together with the day one was regarded as the place where HR could do the most for the deal. On top of the variance in the deals, the role of the HR function is different also in every company. The role does not always depend on the company, but the individuals in HR. If a HR wants to be strategic in an M&A, it needs to show its capabilities and take the place in the deal team. The amount of strategic involvement in the M&A process was seen differently between the HR professionals interviewed, some saw it as self-evident and some had no ambitions in taking part in the decision making behind the deal. The differences in the views of what is strategic involvement was a point of focus in this study. The HR function does not see as important to focus on measuring its performance or looking at the contribution it has on the M&A, it is seen as so evident for them to participate to the process. The value that the function creates has not been measured, but is seen as an essential part of the M&A deal. Possibilities of measuring the contribution are numerous, but not well fitted for HR and rarely used