BACKGROUND

Yummy Company is producer and marketer of fruit juices, packaged dried

fruit and canned jams made from all natural exotic tropical fruit.
Established since 1960 and primary plant is located in Tagaytay City,
Cavite.
It distributes locally and exports dried fruits and jams to Japan.
In 1990, Yummy bought 2 small canning companies in Southern Luzon.
This acquisition resulted to problems on lack of performance management
system, formal pay scale, hiring practices that allowed members of the
family, absence of training facilities, inconsistent enforcement of employee
discipline procedure and high incident of theft.

YUMMY COMPANY GOES TO DAVAO

 VIEW POINT:
TIME CONTEXT:
CEO Nicholas Santiago &
2000
VP-HR Mrs. Dela Cruz

YUMMY COMPANY GOES TO DAVAO

 CENTRAL PROBLEM
Managing people related issue result by company
expansion.

STATEMENT OF OBJECTIVE

MUST: Smooth company expansion.

WANT: Want fast and smooth transition.

YUMMY COMPANY GOES TO DAVAO

 AREAS OF CONSIDERATION
Labor unrest. Domestic and Negative Existing plant and

WEAKNESSES

STRENGTH
OPPORTUNITIES
THREATS

Cultural diversity. International implication of the facilities.

Market network. merger. Manpower and
Productivity and technology.
efficiency in Experience in
operations. people related
issue on
merger/expansion.

YUMMY COMPANY GOES TO DAVAO

 ALTERNATIVE COURSE OF ACTIONS
1. Proceed with the expansion to both Davao & Japan.

1. Diverse market network. 1. Cultural difference.

POSITIVE

NEGATIVE
2. Improved productivity and 2. No guarantee transition will
efficiency in canning be smooth.
productions. 3. May result to labor unrest.
3. Governing rules and
company policy for control.
4. Formal pay scale which will
benefit the employees

YUMMY COMPANY GOES TO DAVAO

 ALTERNATIVE COURSE OF ACTIONS
2. Not to proceed with expansion.

1. No people 1. No growth in market.

POSITIVE

NEGATIVE
management issue to 2. No improvement in
resolved. production and
2. Save on possible efficiency in
lost. operations.
3. No profit increase.

YUMMY COMPANY GOES TO DAVAO

 ALTERNATIVE COURSE OF ACTIONS
3. Expand business in Japan only.

1. May diverse market 1. Cultural differences.

POSITIVE

NEGATIVE
reach in Japan. 2. Legal requirements.
2. Increase market share in 3. Increase in demands may
Japan. not be accommodate by
existing operations.
3. Possible increase in
profit. 4. No assurance it will be
successful.

YUMMY COMPANY GOES TO DAVAO

RECOMMENDATION

Proceed with acquisition

ACA 1

YUMMY COMPANY GOES TO DAVAO

 ACTION PLAN
Person Activities Time
Responsible Frame
CEO & VP HR Strategic Planning: 7 Days
•Degree of involvement of HR (directors) of acquired company in negotiation
process.
•Cultural Differences
•Conflict of Management styles
•Diversity in Managing Human Resource, HR policies, procedures, and Hiring
process
•Failure to manage change resulting to loss of employee morale and productivity
and key employees
•Diversity of performance management systems
•Downsizing of workforce

VP HR Pre-acquisition: 30 Days
1.HR should be involved in the negotiation process in order to understand and
map out the culture of both companies and if necessary, develop a culture that
fits the merged entity.
2.HR will develop a new Organization Chart and detailed evaluations of the
competencies of employees to link their roles and responsibilities to the new
organization chart.

VP HR I. Cultural Integration: 30 Days

Ask for guidance on cultural issues. Understand that cultural differences can
exist within the same country
Have a strategy for overcoming cultural conflicts. Remain alert to the symptoms
of the post-deal cultural clash
Steps:
1. Determine degree of organizational integration
2. Assess organizational behavior
3. Develop change hypothesis
4. Determine drivers of behavioral change
5. Implement change
6. Measure and reinforce change outcomes

YUMMY COMPANY GOES TO DAVAO

 ACTION PLAN
Person Activities Time
Responsible Frame
VP HR II. Integration of Management styles.
Existing Management style of Yummy Corporation will be applied to the newly
acquired company in Davao and in Japan. The regional plant in Davao would still
be headed by the existing leader. However, he should learn a participative type
of management where subordinates are included in discussions. Greater results
will be achieved if more people will contribute ideas to the success of the
company.

VP HR III. Integration of Human Resource policies and procedures.

Since the Davao branch doesn’t have a clear and formal HR policies and
procedures, Yummy Corporation should adopt its existing policies. An HR staff
should be placed in each regional area in order to give venue for resolution of HR
issues. HR should also go online in order to deliver fast response/actions to any
of its regional areas.

VP HR IV. Change management.

Change management can be avoided by solving them as early as before the
acquisition is finalized. Reduction of workforce due to the acquisition of new
equipment in Davao and other HR related issues can be insisted by Yummy
Corporation that they be settled as a pre-requisite to close the deal. Yummy
should involve the management of the acquired company since they knew their
people more. Bringing another leader to the acquired company might create
resentment.

The following should be done by Yummy Corporation:

•Communicate with employees on the necessity of acquisition
•Explain how it will benefit them
•Establish a clear and visible tie between change and business improvement.
 ACTION PLAN
Person Activities Time
Responsible Frame
VP HR V. Downsizing of workforce.
Since the acquisition of equipment would reduce number of persons in the
company, it would be best to inform them of such downsizing ahead of time.
Selection procedures of employees to be retained should be communicated so
that the employees would be aware of where they stand. The HR should draft
retrenchment packages of those who will be eliminated. Probationary period of 6
months whether or not the equipment is operational would give employees the
chance to improve themselves.

VP HR VI. Communication
1.There should be a focal person of the acquired company of whom employees
could talk and seek clarifications, and answer their queries. This person should
have easy access to the Senior Management team to get their views clarified.
2. A strong communication system should be put in place. Plan of actions should
be communicated to be clear.
3.If needed, external person or team could be used to act as neutral entity.

VP HR & FINANCE VII. PAYSCALE

1.Organizational capability- whether or not the company has capacity to pay.
2.Work – intellectual, working condition, decision-making, problem solving, skills
3.Employee – education, experience, skills
4.Legal implications – Labor Code in the Philippines, PD 4425.Market and
country difference