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The merger of Barclays and Lehman brothers

Introduction

Barclays PLC, one of the primary saving banks in the United Kingdom, decided Sept. 16, 2008, to acquire the quantity of Lehman Brothers Inc. for $1. 75 billion. It offers acquired parts of Lehman's equities commerce in European countries and needed on some Lehman employees in Asia. Lehman, the fourth major advantage bank in america, is one of the most recent subjects of the subprime advance disaster that led to the administration stand security of Carry Stearns in March and the conquest of progress giants Fannie Mae and Freddie Macintosh personal computer by the U. S. Treasury beforehand in September of 2007. Worth up to $45 billion in early on 2007, Lehman educated almost $4 billion in loss in the 3rd 1 / 4 has seen its stock worthwhile collapse and was faced with disciplinary downgrades in its credit history, which could have made it greatly hard to improve much-needed capital.

U. S. Treasury Secretary Henry Paulson made it obvious the supervision wouldn't normally give such hold up this time, however, no involved get-togethers - specifically Barclays and Bank or investment company of America - were enthusiastic to obtain Lehman without it. Speedily running out of options, Fuld desired Chapter 11 bankruptcy defence for Lehman on Sept. 15 2007. Under Section 11, which shields a corporation from collectors' lawsuits although it reorders its funds, Lehman became more appealing to Barclays; the British isles loan provider could buy Lehman's choicest pieces devoid of assuming its more than US$600 billion in liabilities.

Under the terms of the contract, which is topic to endorsement by the insolvency courtroom, Barclays received Lehman's UNITED STATES fixed-income and equities sales business, as well as its trading, analysis and investment-banking businesses, relating to a press release on Barclays's Internet site? These Lehman items utilize about 10, 000 people. Barclays bought Lehman's New York head office and two data centres in NJ. As the Wall Street Journal input it, Barclays's acquire includes almost all of Lehman's "people, permission, brand name, skill and clients but (not its) dangerous deals and liabilities that experienced hurt Lehman in the marketplace" before it looked for bankruptcy defence (Wall membrane Road Journal, "Lehman, Individuals Score Reprieve, " Sept. 17, 2008).

Objective of the Paper

In this newspaper we are designed to discuss the merger and acquisition of the Barclays and Lehman brothers. This merger is very traditional because the Lehman brother is one of the oldest lenders of america. Primarily we will discuss the troubles faced by management of the new company with specific reference to Human Reference Management and then on next level we will discuss the Barclays PLC's decision in merging with Lehman Brothers. This examination will consider issues related to Culture, Turmoil and Change.

Perspectives of Barclays PLC & Lehman Brothers Mergers

Clearly, the benefits of Barclays PLC & Lehman Brothers mergers are numerous, but to verify those benefits in the framework of human resource management organisational mergers are examined from three perspectives: management, the staff, and the real human source of information management function (Kets de et al. 2007, P: 11-50).

The Management Perspective

From the point of view of management, Barclays PLC & Lehman Brothers mergers give a great deal. They allow management to interface with both the external and interior environment. In regards to to the exterior environment, they allow the organization to task a graphic of fitness, progressiveness, and robustness. These programs can certainly help in attracting all types of resources from the surroundings, from funding to new employees (Kets de et al. 2006, P: 111-120).

With respect to the internal environment, wellness programs offer a way of establishing and maintaining an effective commercial culture. They give you a way of acquiring the devotion and commitment of employees by showing them that the organization is concerned about their welfare. In short, organisational mergers give a means of communal control (Brewis, 2002).

Last, consider these organisational mergers management programs that offer a means of securing increased output for the business. Organisational mergers are concerned with the organisational image status of the employee and its influence on productivity management. It uses worker productivity as a measure of the success of company, thus changing organisational mergers from an environmental concern to a small business concern (Jacobson, 2001).

The Employee Perspective

From the employee's perspective, Barclays PLC & Lehman Brothers mergers are about keeping body and heart and soul together. They offer the promises of keeping employees alive and healthy in regards to to their personal and professional lives, even offering some people grounds to go to work. Employees may view work as an investment in human capital and have themselves if their group is worth their committing time--often changing jobs if indeed they consider their work environment a waste of their own time. To the amount that employees view a worksite organisational mergers an investment in themselves, they have a tendency to think more positively about their company (Jacobson, 2007, P: 143-155).

The HRM Function

The aftereffect of Barclays PLC & Lehman Brothers mergers on personnel' compensation cases is fairly logical, but their effect on morale and efficiency is much more understated. Most organizations either greatly discount any expected financial benefits that accrue from health and fitness activities or simply assume that the end result is positive. Researchers record that no more than one in ten organizations with organisational mergers can gauge the results in conditions of cost benefits. Because of the issue in obtaining thorough methods of the profits on return in wellness programs, HRM departments may view organisational mergers as just a means of keeping medical bills or workers reimbursement claims down (Herriot, &: Pemberton, 2001, P: 757-790). Even worse, Jim Hippler, main administrative official of Boyd Video games, indicates that gambling HR departments often view the programs as a benefit to the employee but not the business. HR departments would do better to view wellbeing programs from a tactical human resource point of view, which seeks to align the inner and external surroundings with a subconscious contract by which management wins employees' loyalty by guaranteeing them that their time at the job contributes to their development and well-being (Butler, 1997).

Issues that employees of the new Organisation face in mergers

In mergers of Barclays and Lehman Brothers the employees of the company confronted several issues and obstacles. The first way to broaden their knowledge of the phenomena of downsizing, restructuring, and privatization is to check out these changes as part of a wider process of change. A review of nearly 1, 400 British people of the Institute of Management (Worrall & Cooper, 1997) summarized the intricate situation. Those in large firms utilizing more than 5, 000 or in the public sector (around 25% of the sample) believed their business was shrinking, but around 50% of managers in other sectors or smaller firms experienced that their corporation was growing. Downsizing is specific to certain sectors (Herriot, et al. 1997, P: 151-162). However, reducing across objectives of change in the real size of organizations was the experience of previous restructuring. Sixty-one percent of managers experienced experienced some change in organizational form in the last year. Redundancy had been involved with 54% of the restructuring work. This is just like findings in the United States, where the latest AMA data show that structural change is the frequently cited mason for job eradication, with 64% of organizations citing restructuring and 49% citing re-engineering as the explanation for job eradication. For British managers, structural change was multifaceted. In reality, restructuring involved site closures, cost reductions, outsourcing, ethnical changes, delayering, mergers and demergers, expansion into new markets, changes in performance management systems, as well as redundancies. Separating out the multiple variables and their interactions can be an impossible job (Brown, 2000, P: 22-43).

When two organisations form single entity then It had been more productive to represent the various manipulations of composition mentioned previously as changes to the organizational form. Organizational form refers to the combo of strategy, framework, inner control, and coordination systems that provide an organization using its operating logic, learning resource allocation rules, and commercial governance device (Creed & Kilometers, 1996; Pfeffer, 1992). Downsizing, restructuring, and privatization all create changes in interfirm form-the composition and procedure of business that is most noticeable in. the producing institutional agreements, joint, ventures. , tactical' alliances, outsourcing plans, and cross-sector cooperative plans. New managerial, priorities become clear after the competitive preparations of the changes in interfirm form emerge such as an out-sourced or privatized product under new possession. However, the greatest concern for HR professionals is due to changes in intrafirm form. Managers are the. Main designers of this type of organizational form, through the options they make about changes in organizational. Design and coordination systems; downsizing, delayering, and the design, and coordination of jobs; and the consequent level, of trust included in the business. All serve as opportunities (intentional or not) to break up existing HRM patterns, roles, and obligations and to reconstitute them against a fresh set of priorities (Mael, & Ashforth, 2005, P: 309-333). Analysts review' of British managers identified the principal impact of changes in organizational form as being heightened productivity pressures, increased degrees of accountability, accelerated decision-making, shifts in the mix of essential skills and experience, and increased versatility. Such changes suggest concealed hazards to organizational effectiveness, about which we still know little. Organizations are unclear about the relationship between many emergent varieties, what remains as a proper human, asset in. each case, the several configurations of HRM techniques, and the role that. These routines play in creating competitive gain (Burrell, 1998, P: 14-28).

Dissimilar Interest of Two Organisations in Mergers

There has been restored affinity for the domains of trust and the expense of trust deficits. The ability of organizations to re-establish trust has to be questioned after the merger, and it is clear that HR experts need better insights in to the dynamics of trust and the role of social capital if they're to activate and re-engage sufficient people of their organizations. Inside a theoretical analysis of the Barclays Plc and Lehman Brothers mergers and the consequences of acquisition, analysts argued that lots of attempts to symbolize organizational works as brought on by uncontrollable factors backfire, because they are seen by employees as one more take action of deception. Such perceptions undermine levels of trust. Trust and understanding among the employees is seen as a willingness to rely or depend on some externality such as an event, process, specific, group, or system and defined as the precise expectation that the activities from such externalities will be beneficial rather than detrimental. It is buttressed by the ability (rightly or wrongly) to take for granted many top features of the public order. The paradox facing HRM academics is the fact that group merger are asking employees to trust in transition at a very time when the type of staff trust is itself in transition. Creed and Mls (1996) recognized, three different elements of trust (a) process-based (the non-public experience of continuing exchanges that induce ongoing expectations and norms of responsibility about what is sensed to be fair treatment); (b) characteristic-based (beliefs about another's trustworthiness that derive from a perception of their expertise, intentions, activities, words, and standard characteristics); and (c) institutional-based (rely upon the integrity and competence of casual societal constructions). All three facets have been challenged just lately, but the various HRM solutions to the breach and re-building of every facet is much less yet comprehended (Clegg, 2005, P: 28-48).

The ideas of trust and the understanding among the list of employees become all-encompassing topics in the study of new managerial and merger varieties, because there is a definite and forceful website link between your two. Managers have either expected trust into or out of the association through the options they have made about levels of empowerment constructed into the plan of control systems, harmonization systems, and associated business processes; and through the degrees of information-sharing and the shape of recompense systems associated with new working techniques. They make two known judgments about employees' "task dependability" (i. e. , do they have the functions and potential to use responsible self-direction and self-discipline?) and "values congruence" with the goal of the organization (i. e. , will there be a respected written and spoken values that will lead how employees take action) (Devine, et al. 1998). There's a disagreement between the higher degrees of faith that are recognized in and necessary to the in effect logic of several new organizational forms and the degrees of faith reproduced in the behaviour and psychological arrangement of employees.

The procedure for mergers between Barclays and Lehman Brothers has challenged the psychological agreement, with the lack of sympathy breaching earlier potential customer and norms. It really is proving hard for professionals to induce staff that they can be private to make decisions further than short-term expedients. The behaviour of communal teams and the respected divisions between them have been thrown into bewilderment. The brand new HRM idea of the Barclays and Lehman Brothers issues age-old and trusted separations between workplace and staff and between professionals and unions. The trust that employees located in the HRM paradigm and their belief that it would bring greater advantage than a reliance on employees' speech achieve through formal union-management partnership has been queried. The run after of suppleness has challenged the habits of employee behaviour that professionals expected characterized full-time personnel or part-time staff, elderly employees or youthful employees, women or men; and new communal groupings of "victims, " "accomplices, " or "conscious believers" are up-and-coming at occupation (Fineman, 2000).

A Strategic HRM Model for Barclays PLC & Lehman Brothers Merger

Review of the prevailing merger and restructuring books provides many potent principles suitable to the case of Barclays PLC & Lehman Brothers Merger in many facet of human source of information management. Because of market makes and strategy, the organisation clearly will, engage in merging and restructuring during the period of the next 10 years. The issue becomes, therefore, how it can learn from the experiences of other sectors and organizations.

A proposed proper HRM model for merger/ restructuring has been mentioned in many times. It is a primary derivative of the best case routines, in merger between two organisation (Wyatt 1991; Cameron, Freeman, and Mishra 1991), as well as systems pondering applied to strategic human learning resource management (Anthony, Perrewe, and Kacmar 1994; Butler, Ferris, and Napier 1991). As shown, there are three major components to the model, relating to pre-restructuring, restructuring, and post restructuring activities. If nursing homes and professional medical organizations take part in thoughtful strategies that require these three components, they could capture and apply those activities regarded as successful.

The suggested model implies that an environmental check out of Barclays PLC & Lehman Brothers Merger should be conducted prior to growing and employing restructuring activities. Given the hyper-turbulence of the organisation, collecting, categorizing, and interpreting environmental information are crucial. As noted by Ghosal and Kim (1986), building an efficient brains system for a competitive edge involves opponents, regulatory agencies, etc. Of particular relevance to the hospital industry is a SWOT research (talents, weaknesses, opportunities, and risks) (Carson, et. al. 1994). Evidently, if the organisation is to enhance itself effectively by restructuring, it must use long-term data-based strategies, instead of short-term cost containment. Duncan, Ginter, and Swayne (1995) have recently proposed specific advice for environmental scanning and tactical planning in the management of the human resource in different type of mergers and business ventures.

Part 2

Issues Related to Culture, Turmoil and Change Management

The human resources reason for Barclays performs a precious role in causal to the merger's fragmentary trade accomplishment, like the extremely winning gaining and integration of Barclays and Lehman Brothers. However, the Barclays PLC group documented that their HR team required to uphold, improve and produce their trustworthiness and power and for that reason they had a need to provide their HR experts to be "Business people first, HR people second". The Barclays PLC group is not unaccompanied - a study of main UK companies that had just gone through a main acquisition or merger proved that approximately half of the amount of money directors and a straight superior percentage of HR directors thought their in-house HR experts lacked enough business acumen to proficiently assist their commerce meet its goals. The Barclays PLC group thing was to assist their HR specialists augment their considerate of:

* The trade individuals and issues facing the system of government

* How the HR purpose could proactively add worthwhile to the business in addressing some of these challenges

The Challenges that Barclays Faced

When a Barclays PLC takes on the job of integrating with Lehman brother entity anticipated to merger or acquisitions, there are many choices that must definitely be made. Just how many call centres or data-processing sites if the novel bank keep? Which bank's loan dispensation or cashier system system is way better? Which organization gets the best recruitment model? Who gets the best skill system? Should the acquiring bank effort to house the functionality of the purchased bank's knowledge platform-saving, for example, a single characteristic that its own system lacks? Or should the acquirer simply move all the bought bank's customers to its various bank systems in an attempt to reduce the combined skill infrastructure as fast as possible and cut costs? What will be the culture of the new entity? How the conflicts and change will be fixed?

These are lots of of the common issues that contain to be talking with when getting into the planning period of the integration. Many integration tasks haul on as a result of poor planning, a short of planned aims and a method tainted by politics.

Communications Plan

When a merger taken place between Barclays and Lehman Brothers then there is good communication plan determined. Barclays PLC help with the structuring of the marketing communications plan that will proclaim the transaction and, as time passes, its change details to key stakeholders, including traders, customers, suppliers, employees, the media and industry analysts. We employ a recognised and effective communications method that may be tailored predicated on the details of the business enterprise.

Human Resources Plan

Barclays PLC assistance with planning the preservation and integration of human resources carrying out a merger or acquisition, like the board, senior corporation, middle management, technical, secretarial and front range employees spanning all useful areas. We labour intimately with management to spell it out the perfect managerial design based on revised commerce aims. We help make new company charts and decrease disparate headings, reimbursement programs, and recompense plans. When ideal, we assistance with "decrease in drive" proposal to attain cost savings motivated by post-transaction redundancies in recruiting.

Management Information Systems Integration Plan

Integrating two dissimilar industrial systems, while progressing to perform each organization can be a huge confront, It requires good planning phased change, huge groundwork, concentrated assessment and guidance plus more training. We work with other associates of the addition team to spell it out practical functioning plans as to what must be included, when it should occur, and exactly how it can be done productively.

Product and Service Integration Plan

We work to spell it out the go-forward product and service combination and ensure that product groups appreciate and endure the new plan. Barclays PLC helps put priority for new product progress and we express criticism device to trail development and obstructions. Barclays PLC recognize and follow product synergies.

Operations Integration Plan

Barclays PLC outfitted a thorough integration arrange for operations, including all functional areas, such as accounting, loan servicing, item dispensation, day 2 procedures, advertising, purchase, and branches. Barclays PLC recognized a comprehensive eye-sight of how things are going to effort in the chance and what steps require to be taken to make it happen. Barclays PLC developed a meeting for subject reputation and decree (e. g. a customer say it'll stop undertaking commerce around unless we perform to suffered hold up for a vintage product line).

New Mission, Culture, and Principles of the brand new Organisation

Reinforcing the new quest, culture, and beliefs of the restructured banking organization involves redefining beliefs, structures, and procedures (Scott and Jaffe 1991) in a obvious way. It is important that managers of a merged organisation recognize that organizations take part in habits of change that not immediately result in increased efficiency. As mentioned by Bridges (1991) and Woodward and Buckholz (1987), organizations making changes such as restructuring must recognize that reactions to improve may take the proper execution of disengagement, disorientation, and disenchantment. Providing assistance by means of change workshops, stress management, and job management programs, and a general awareness of the periods of change and the internal transition included are critical to successful version.

Also important in the post restructuring period are human resource activities for the survivors and others who may subsequently leave. To foster dedication and career progress, it is very important to recognize new career pathways, many of which might not exactly have been wide open prior to the restructuring. Similarly, the business must continue steadily to recruit for the new culture, which may require using different selection processes or different forms of decision making. Further, appropriate behavior and performance for the new culture must be visibly and tangibly rewarded. In some instances, survivors of the restructuring may leave the organization. Voluntary exit programs for those who wish to leave should be set up. Making clear the correct behaviours, philosophies, and goals, and easing the change of employees usually destined to willpower, termination, or career atrophy are honest and business imperatives.

Conclusion

In this contemporary situation where every company is searching for good assistance in order to maintain its survival so in this condition the perfect way is the merger between your organisations. It really helps the organisation to keep their sovereignty. It is the fact that the majority of the company prefers the merger as the best answer however in this solution almost all of enough time employees suffer from and human source management has to play very important role to safeguard the human rights and give them equal opportunity to perform and receive the reimbursement what they are worthy of. In organisational mergers if both organisations will not give appropriate attention to the human tool then it'll conclude with nothing and both organisations will set up with fireplace. In mergers employees' trust is the main thing that company must consider because it is the only thing that may become the pillar of long-term relationship between worker and company.

Analyses of studies of organizational mergers, at the same time of your veritable 'merger-mania' in both general public and private sectors could very well be homologous of management and organization studies as a self-control, for the focus is a great deal upon financial aspects, with the 'individual results' so little explored, that the long traditions of steering clear of acknowledgement that organizations are psychological places, located within an Enlightenment traditions which stresses rationality, logic and the suppression of thoughts, proceeds within research into mergers. In empirical studies however this absence, this concealed 'Other' of the mental life of organizations, reverses itself, so that rationality and reasoning slip away from view, even perhaps from presence, when the researcher permits it to, i. e. when the researcher designs a study that seeks to comprehend how organizational people constitute and reconstitute their identities which of the 'new' group. When we started out such a study we anticipated we would discover that the process evinced much pain, but the sheer power of the anguish that interviewees helped bring in to the office with them stunned us and made us irritated that organizations can do this to their staff (Lucero, & Allen, 2004, P: 425-446).

Anger is perhaps not an feelings that is openly portrayed in academia, except during the intense debates between those from contending theoretical perspectives, but here we desire to maintain that anger, to disperse it among our academic colleagues, to assert its legitimacy and rationality, for organizations, in inducing a lot pain in employees, are performing unethically. We, as academics, are implicated in their insufficient ethics if we supply it, stoke it, and provoke it, through paperwork which concentrate only upon the economic (Brady, 2000, P: 309-18).

How do we portray the reasons because of this anger in the merger framework of human resource management, so that we may convince fellow workers that our quarrels are rational, are reasonable, and aren't to be dismissed as unsuitable for the academic environment? Portraying pain in the coolness and remoteness of academic dialect is difficult, for the academics format is not well suited to this evocation (Korten, 2003). The medical community (that read academic community), as analysts write, 'is recognized most importantly by the actual fact that "it writes"; which it can so according to the visual canons of publications and publishing residences, and in the neutral and ascetic scientific-academic style dictated by the natural sciences and the rationalist and positivist paradigm' - not really a style conducive to our current process. However, the consider aesthetics within firm studies, and the new emphasis it brings of the sensory as a means of knowing, offers a legitimacy for how we will show 'our data', for it allows us to experiment with our dried out, dusty media and to draw after the genre of crisis so as to use words to mention emotions and then for feelings to be the bearers of logical arguments (Levine, 2005).

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