D.B.A. Baker College (Michigan), 2011.
Key employee retention strategies in mergers and acquisitions
212 pages; UMI #: AAT 3490536
Bibliographic Record in ProQuest Dissertations & Theses Database
Due to the strain on federal, state, and local budgets, services to vulnerable populations, including the mentally ill, developmentally disabled, and those who seek medical care from nonprofit organizations, are under pressure. One response to this phenomenon among nonprofit service providers is an increase in mergers and acquisitions. The failure rate of mergers and acquisitions is 75%, and the primary reasons for failure are cultural incompatibility and key employee turnover. The purpose of this study was to explore an organization's ability to retain key employees based on its organizational culture, compensation practices, and job titles. Semistructured interviews yielded five themes. First, organizational culture should be evaluated as part of the due diligence process, and the organizational culture of the newly combined companies does play a role in key employee retention. Second, key employees are identified as part of the due diligence process. Third, the preferred method of dealing with salary and bonus compensation is to maintain current levels. Fourth, job titles by themselves are not considered important for retaining key employees. Fifth, organizations may experience longer postmerger transition periods if important decisions are not made on a timely basis. Recommendations include performing internal cultural audits prior to involvement in a merger or acquisition, using a structured process in performing cultural audits, maintaining compensation at current levels, and providing clear communication about roles and responsibilities of key employees following a merger or acquisition.