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Mergers & Acquisitions (M&A) has almost become an emotive phrase in academic research and business practice in recent years, especially due to the large number of studies that report on their failure. One of the most prominent reasons for the low success rate of M&A transactions is the insufficient involvement of employees in such transactions. Although in recent years human resource issues have increasingly been addressed in M&A due diligence, the specific employee competence requirements that ensue from M&A transactions have to date hardly been investigated in academic research and business practice. Daniela Peterhoff develops a concept for Human Resource Due Diligence (HRDD) in M&A that addresses the context-specific employee competence requirements resulting from such transactions. In developing her concept, the author presents a three step HRDD process. In step one she develops focus areas for HRDD based on the objectives underlying an M&A transaction. The second step shows how the HRDD information identified as relevant in step one can be generated. The author develops indicators to break down employee competences, and identifies valuation tools through which these indicators can be assessed. In the third and final step, she compiles the HRDD information generated in step two based on controlling ratios and human resource portfolios.
List of contents
Human Resource Due Diligence Concept (HRDD Concept)
Determination of Focus Areas for HRDD
Generation of HRDD Information
Compilation of the Generated HRDD Information
Complement of the HRDD Concept with Insights from an Expert Enquiry Illustration of the Application of the HRDD Concept to Business Practice
About the author
Dr. Daniela Peterhoff war wissenschaftliche Assistentin am Lehrstuhl Organisation und Personal (Prof. Dr. Jean-Paul Thommen) der European Business School, Schloß Reichartshausen. Sie ist heute im Bereich Trading and Clearing Market Development eines Börsenunternehmens beschäftigt.
Summary
In the context of many mergers and acquisitions (M&A), due diligence investigations, i.e. detailed analyses of one or all firms involved in a transaction, are carried out. Financial, tax and legal aspects have traditionally been subject to such due diligence investigations. Human resource aspects have long been neglected in M&A due diligence, but have been considered increasingly important in business practice and in academic research in recent years.
Daniela Peterhoff develops a concept for Human Resource Due Diligence in M&A that addresses the context-specific human resource requirements. M&A transactions impose specific requirements on employees, which result from the objectives underlying them. These requirements must be well understood to enable management to proactively enhance their fulfillment. The expected future human resource requirements deriving from M&A transactions should be addressed in Human Resource Due Diligence to find out whether employees are prepared to fulfill them.
