Acquisition is the act of acquiring or gaining possession. The Guardian Kraft bought Cadbury in 2010 2010 for 11. 9bn, concluding more than 150 years of independence for the Birmingham-based delicious chocolate maker. The primary aim of the acquisition was to increase income and global dominance, attaining additional shares in the market and easy infiltration to others would be of great help Kraft. To bolster its power in the growing market Kraft decided to buy Cadbury and expand its geographic restrictions. BBC (2010) Kraft said the deal would develop a "global confectionery leader" The acquisition may be referred to as "horizontal extension"; such expansions are common and efficient in the current post economic problems environment.
Businesstoday (2010) state governments that, One of the reasons for change was synergy such as complimentary global occurrence, knowledge writing and economies of scale and scope. Taking a decision to dominate Cadbury, Kraft at first targeted for a profitable expansion as part of its permanent strategy. This seemed really guaranteeing for Kraft as Cadbury possessed a strong market especially in India and Brazil. BBC (2010) "We consider the offer signifies value for Cadbury shareholders. . . and will now use the Kraft Foods' management to guarantee the continuing success and progress of the business, " said Cadbury's chairman Roger Carr.
However during this time period Cadbury lost its Summerdale stock near Bristol, as Kraft moved the production device to Poland. This business lead to fury and dissatisfaction amidst the employees at Cadbury. In addition, it created negativity in the offer and the acquisition fell to a lot of criticism. However Kraft treated the situation and extended with the acquisition. The paper will explain us
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Analyzing The Contextual Change :
The routine below clarifies the steps taken for Kraft to obtain Cadbury.
According to Carnall's (2003) Coping Cycle the following process will determine the steps of change. The circuit consists of five stages which are denial, defence, discarding, version and internationalisation.
Step one Denial- Where people in the company need to handle and allow change, the first reaction by people is to refuse there is a need for change. In the Cadbury Kraft deal we see that the change is not easily accepted among the business that is taken over as they may feel second-rate. This change may not easily enter into effect and it may take a while for all the employees to become accustomed to it. The Guardian (2012) following the acquisition six to seventeen older positions in Cadbury experienced left the company as they denied there was a dependence on change.
Step two defence- Once people realize that change is taking place and they can't stop it, they could feel turned down and depressed. This can turn into protective behaviour whereby people will protect their past routines and deny that the new ways are suitable to them and their job. BBC (2010) In the same way, in the case of Cadbury, it was used by cultural impact, as they have been operating in britain since over two hundreds of years. One of the primary philosophies of the company is that success will depend on the commitment and the output of individuals dealing with them. For Cadbury people will be the most essential in fulfilling its goals. The American means of working is usually different from the English ways because they are more result focused. Kraft managed to get clear it wants to lessen its expenses and had held many employees hanging on their job. They also plan to raise the working hours and decrease the pay. Therefore Kraft acquired a rigorous and bureaucratic working environment.
Step three discarding- When people realize that change will need place if they like it or not and it generally does not affect them plus they need to adjust to new situation, they start the procedure of discarding old behaviour and accepting what was well suited for them before is not appropriate any longer in today's. The Guardian (2012) Cadbury followed the contingency theory of proper human resource management also called best fit. This theory expresses that an organisation will come into effect if its tactics and strategies are alongside the human reference management activities, regulations and tactics of the human being resource team to the goals stated in the memorandum. Cadbury experienced integrated the human resource strategies combined with the business perspective to complete it targets. The managing for value program helped to enlighten the employees by describing the way the company will make more income and also explains teamwork and efficiency. Kraft on other hand as an American company is more competitive in nature and so their focuses on and goals keep increasing. In Cadbury not interacting with deadlines or certain goals was more lenient than Kraft. Kraft was more ambitious in their way of working and expected the people to deliver.
Step four adaptation - No suggested change is hundred percent suitable therefore for the change to reach your goals, the ones influenced need to adjust to the change, but the new ways also have to be adapted to squeeze in with the existing people and circumstances. Officers at Cadbury noticed their ego has been struck because they are now a subsidiary of Kraft. It was difficult in the beginning to change the frame of mind of the people but later they all came together to place forward the change. Kraft already appears to be benefitting from the acquisition with the a large number of new stores and selling tips doubling in many countries. The huge sizes of the firms are what would take it additional time to get included. It is estimated that Kraft is four times how big is Cadbury.
Step five internalisation - This is the level of coping pattern where change becomes completely functional, and new ways of working and behaving have been developed. People reach the stage where they start to see the changes much less new but normal. Cadbury representatives agree with the fact soon that Kraft got strategy and purpose in the deal and it was getting into effect. Both these companies now discuss each other's resources and experience and hence have a dazzling future ahead. The change has therefore been a success.
Reccomendations:
The above research study illustrates that during acquisitions and mergers it is very important to understand the type of change included and the several elements of the company such as resources, skills and what sort of change must be unveiled. Jhonson (1993, p. 64) recommended that the strategic management of change is actually a 'cultural and cognitive happening' somewhat than an analytical logical exercise. Clarke (1994) claims that the essence of lasting change is to understand the culture of the organisation that is usually to be changed. If proposed changes contradict cultural biases and customs, it is inevitable that they can be difficult to embed in the company. Kotter (1996) takes a similar view, arguing that for change to be successful it must be anchored in the organisation's culture. The analyst implies that Kraft needs to change the culture of Cadbury to use better control of the organisation and to fortify its brand. The individuals responsible for the change need to get the multiple ways of controlling change keeping the people's interest at heart.
For an effective change every organisation needs to keep in mind the following guidelines. They must create a vision and strategies, then make clear the eye-sight with proper wide-ranging based mostly action, create short-term goals and changes for the betterment and producing new techniques in the culture. These guidelines must be enforced in the mentality of individuals. As advised by Pettigrew (1997) organisational functions are embedded within an organisation's context, of which culture forms an important part. Pettigrew also points out that, due to this embeddedness, change can be gradual and it could be difficult to change a preexisting culture. In such instances it is necessary to challenge device that reinforces old or inappropriate
Behaviour, such as praise, recruitment and campaign structures. If it is successful it will create a climate where people are prepared to propose or embark on change.
Conclusion:
The primary driver for mergers and acquisitions is income gain; however, this approach rarely takes bill of ethnic difference which might inhibit successful version. Therefore the CEO and the People Learning resource team need to design team development workshops and programs for the workers to access know each other better. Regular communication and opinions is essential and should be preserved throughout the company would be advisable to execute a culture analysis of the company. Beer (1993) shows that the simplest way to promote change is not by immediately attempting to impact organisational behaviour or culture. Instead, they advocate restructuring organisations to be able to put people in a fresh organisational framework which increases new roles, connections and responsibilities after them. The situation illustrates that the acquisition was successful fiscally; however it involved a clash of two different cultures. Firstly Kraft must understand the working environment, strategies of Cadbury and then cultivate a cultural change. It cannot forcefully exert a fresh culture, it requires to grow as time passes.
