Question

A publicly owned company has acquired a small privately owned company. The small company had grown too big for the former owners to manage. Prior to the acquisition, the owners were both heavily involved in the day-to-day decision making of the company, but they are not adept in effective management practices. Both former owners have signed contracts to remain with the company for two years post-acquisition to be a resource as the integration is completed.

Policies and controls in the small company were nonexistent. The treatment of employees was not consistent, and employee morale is low, primarily due to the uncertainty in the acquisition and the fear of favoritism.
The HR manager assigned to perform due diligence on merging the small company has found additional issues. There is a substantiated allegation that one of the owners of the small company was involved in a romantic affair with a female subordinate, and the HR/finance clerk was demoted for inappropriately allocating funds from the company to his personal bank account. Both of these issues were addressed and the matters closed without any further disciplinary action being taken with either of the individuals.
The CEO of the acquiring company asks the HR manager to make the needed changes to ensure compliance with laws and policies, as soon as possible, without upsetting the former owners.
What is the best first step the HR manager should take to create a positive working relationship with the former owners?

A. Involve the former owners along with representatives of the acquiring company in developing a plan for implementing policy changes.
B. Implement all needed changes immediately using the CEO's directive to address any employee or former owner reluctance to change.
C. Make any changes slowly so as not to upset the workforce; then share them with all stakeholders after the fact.
D. Share the policy changes and a time line as to when they will be changed with the former owners.

Answer 1

The best first step the HR manager should take to create a positive working relationship with the former owners is to involve them along with representatives of the acquiring company in developing a plan for implementing policy changes. Thus the correct option is A.

Step-by-step explanation:

Option A stands out as the most constructive approach in initiating positive engagement with the former owners. Engaging both former owners and representatives of the acquiring company in developing a plan for policy changes ensures transparency, collaboration, and acknowledgment of their expertise in the company's operations.

This approach acknowledges their experience while aligning with the CEO's directive to enforce compliance without alienating or disregarding the former owners' input. Moreover, involving them in the planning process fosters a sense of inclusion and respect, mitigating potential resistance to changes that might arise if implemented abruptly without their involvement.

This method establishes a collaborative environment, allowing the former owners to contribute their insights while ensuring that the necessary changes are made in compliance with laws and policies. It also assists in building a positive rapport between the merging entities, setting the foundation for a smoother integration process.

The step promotes a balanced approach that respects the former owners' knowledge while addressing the imperative need for policy compliance in the newly acquired company.

Therefore, the correct option is A.