Risks During Mergers and Acquisitions

Risks During Mergers and Acquisitions

Merger and Acquisition (M &A) most often, involved litigation risk (Beatty, Ewing, & Tharp, 2013). This is where the Human Resources (HR) management comes in. There are different stages of (M &A), which is pre and post-M&A, due diligence, and integration. Pre-M&A is based upon company advancement, whereby the acquirer explore for a qualified partner (target) to evaluate probable goals and a strategy for implementation (Yocum & Lee, 2014). Due diligence involves gathering all applicable evidence and facts that can affect verdict by the acquirer (Noe, Hollenbeck, Gerhart, & Wright, 2017). In this process, the acquirer does a detailed investigation of the credentials and assets of the company. The third part of the M &A is Integration, whereby the acquired generates an inclusive proposal for assimilating the two companies, which happens during due diligence or after due diligence (Beatty, et al., 2013). In the Post-M&A process, the final merger treaty occurs. The business activities, personnel, and the assets, of both organizations, are combined together. This take month, sometimes years to occur (Yocum & Lee, 2014). This paper will discuss the HR legal risk, HR role in protecting against risks, and HR role in due diligence and employee data protection.

HR Legal Risk

According to Yocum and Lee (2014), the only unquestionable way to evade the risk in an organization is to lock the gates and mount a “closed” sign in the window, which is rarely done, or in other words impossible. The legal risks are unavoidable but can be preventable. In any organization, employers have an ethical and legal responsibility they owned to their employee. They also have to put employee’s well-being and safety into consideration to avoid litigation. Establishments, need to consider all risks throughout their whole procedure and integrate risk management into all their decision-making and arrangement. HR department needs to identify some legal risk facing their organization because every action of an organization stances a risk. Some legal risks can be financial (wages and salary), the hiring and termination process, personal injury and medical, abuse of any kind in the workplace, and workplace conflict (Yocum & Lee, 2014).

HR Role in Protecting Against Risks

The HR department