XXYY Corporation acquired Red Slash, a family company that has existed for twenty years. Red slash will be one of the subsidiaries or associate companies for the XXYY Corporation with the Head office at Santa Clara and many offices all over the world. The new acquisition changes the management structure, with a focus on the combined entity’s human resources.
The holding company XXYY Corporation will have an extra, one hundred members of staff. These new human resources from Red Slash are unskilled and are just working for the family/ friend’s business. Human resources for the new combined XXYY Corporation need to be transformed by using strategic approaches. This transformation will be improving the intangible assets or resources, which make up the human capital for the company.
Transforming the human resources function using strategic approaches will involve a thorough research and development program, on the human resources department. The strengths and weakness of the members of staff in Red Slash need to be, determined and the main focus should be on the main weakness, which relates to the employment of unskilled family members and friends. Human capital need to have the necessary knowledge, skills, education and experience to provide entrepreneurial ability, that will coordinate all the other factors of production and improve the Profitability, Earnings per share, Market value and general returns to the XXYY holding company.
A plan to improve the human resources for the combined entity, especially the new employees from the Red slash subsidiary. Implementation of the plan should be within the first financial or economic year from the date of merging. The unskilled human capital need to be rejuvenated so that they can effectively coordinate with those in the Holding company XXYY corporation and with the, operational, middle management and Top management personnel.
Tom G (2003)
To transform the human resources of Red slash, I will explain the following strategic approaches:
Conducting organization analysis through human resource audits, job analysis and revamping the recruitment and selection process:
Revamping refers to the changing or arranging the human capital to achieve the company’s success. Human resources in Red slash were not acquired through just and equitable procedures. The acquisition Board of XXYY Corporation should officially examine the employees who are currently holding positions in Red Slash.
This kind of human capital does not posses the initial ability, knowledge and skill to work for the combined entity. Retaining this kind of workforce will be to the loss of the company, because revenues will be maximized at high costs; huge salaries and wages being paid to unproductive workforce or human resources. Family people and friends working for Red Slash should be replaced with new employees. Selection procedures should be fair and justifiable. The new workforce structure for XXYY Corporation should be composed of only those who have an ability to deliver. Revenues will therefore be maximized at a favorable cost for the new merger.