Merging Companies’ Code of Conduct, Case Study Example

Introduction

Merging brings two reputable companies together which had different managerial strategy. The victorious incorporation joins, reinstates, and changes various processes, strategies, and organizational arrangement of the both companies. In a very well organized merging strategy may result to a very distinctly special and unique resourceful operational system than the former one which may be very profitable. Therefore, such integration may require leaders to serious measures in order to make the merging result to great merits for the both companies. The merging of two companies brings together two distinct employees which may bring various managerial challenges due to different cultural differences in managerial system of the former companies. This paper describes how setting up of the code of conduct for the newly formed company can help in ensuring the associated challenges in management system are minimized.

There are numerous points the management board should need to take in consideration before building up a strong code of conduct the benefit of the both companies. It is important to understand that at past a lot companies have also applied the same procedure of implementing programmes which govern them in order tom help them respond efficiently to the economic political, social and environmental effects which interfere with their operations. Setting up of code of conduct is very essential in every agreement as it helps in ensuring legal requirement are met in the operation of the merged business (Eisenhardt & Graebner, 2007).

The code of conduct may be easily established through meeting by the overall officials of the both companies such as C.E.Os, Secretaries, human resource managers and all other leadership team. The setting of the code of conduct relates to the procedures provided by state and the federal law. The codes are purposely formulated for the internal governance in order to ensure smooth running of the businesses. It may involve reports to Board of Directors, training among the leaders and the employees, disciplinary action to any one who interferes with the efficient operation of the businesses. In order to ensure every validation of the businesses transactions the involved parts must also approve through signatures. It may also involve financial reporting and record keeping this may help in making the financial controller and the chief accountant are accountable to any loss of money or incase of any fraud, they may give a clear definitions to the directors (Corley & Gioia, 2004).

It is very reasonable to have a code of conduct among the merging companies as it will help in protecting their operation and interests. For instances, the code of conduct helps to provide golden parachute for the top executive of the merged company providing them with comfortable live in the new company where they can be treated equally as in their former company. It also gives the clear on how to enjoy compensations incase of stock option if one get laid off. It also provides guidelines on how the employees should enjoy their rights in the new company hence minimizing cultural differences. It is very important to consider any expected legal risks when drafting a code of conduct. The main body of the code of conduct should indicate the relationship between the employees and the company by including the following parties; employees, customers, suppliers, shareholders and investors, senior executives and the wider society. It is also important to consider the existing code of conducts when drafting code of conduct such as dress code, alcohol and drug abuse, harassment and bullying codes, gifts and hospitality code and also report system codes. A code of conduct is printed and distributed with a letter from CEO to all the departments of the organization. Signatures by employees are also provided to prove they have read it and approved to follow it (Harrison & Carroll, 2006).

Conclusion

In any merging there must be a code of conduct which governs the relationship between the merged company and the company obtained it. This may help in protecting the employees’ of the merged company and any other changes between the both companies in the future such as termination of the merge.

References

Corley, K. G., & Gioia, D. A. (2004). Identity ambiguity and change in the wake of a corporate spin-off. Administrative Science Quarterly, 49(2), 173–208.

Eisenhardt, K., & Graebner, M. (2007). Theory building from cases: Opportunities and challenges. Academy of Management Journal, 50(1), 25–32.

Harrison, J. R., & Carroll, G. R. (2006). Culture and demography in organizations. Princeton,  NJ: Princeton University Press.