Human resource integration in subsidiary mergers and acquisitions

Abstract

PurposeThe purpose of this paper is to shed light on challenges faced in human resource (HR) integration in subsidiary mergers of western corporations in Poland. The paper seeks to investigate the central themes in HR integration in terms of the role of the HR function and the implications for the local workforce.Design/methodology/approachA qualitative method research design was adopted with semi‐structured formal and informal interviews, participant observation, and secondary/primary data analysis.FindingsFindings provide insights into the challenges of integrating the subsidiaries of western corporations based in transition economies and why problems might emerge from the collaboration between local and foreign managers. Specifically, the analysis suggests that a success of the HR integration might be particularly at stake in circumstances of a low HR power in a subsidiary and a low multiculturalism of the foreign investor.Research limitations/implicationsThe main study limitation concerns the fact that investigations concerned perspectives of local managers. It would be interesting in future research to observe the HR processes as perceived by both local executives and foreign parent decision‐makers.Practical implicationsThe paper's findings may help managers and change agents to understand the specific challenges to HR integration of subsidiary mergers.Originality/valueThe results shed light on HR integration in subsidiaries of corporations from western economies based in emerging or developing regions. Specifically, in circumstances of a low HR power in a subsidiary and a low multiculturalism of the foreign investor, officially proclaimed friendly mergers may turn to hostile takeovers and drastic changes risk implemention without a clear understanding of the local context. Then, HR integration risks having a dysfunctional impact on the workforce and consequently, failing to deliver expected synergies and, in the long‐term, cause M&As failure.