7-1 Case Analysis
MBA 699
Victoria LaPean
Overview
Organizational change management involves several important components. Considering,
for example, how different choices could impact the change's overall long-term impacts. Most
businesses will use case studies to analyze the possible outcomes. This is thought of as an
estimation of the outcomes that will deal with real-world business issues and provide crucial
information that businesses may use to reach their own decisions. Our life sciences company is
now undergoing a change management process, and using case studies can greatly help us
navigate it.
Case Study Analysis
The case study article Bumpy Road Ahead: The Automotive Interiors Merger That Wasn’t
describes a merger between American Automotive, Inc. and Barcelona Brand Auto, Inc. The
Barcelona Brand, Inc. (BBA) was established in 1995 by Luis Barros. BBA was established in
order to provide the first integrated cupholder for automobiles. In addition to being its initial two
investors, Mercedes and Jaguar were two of their early target clients. Between 1995 and 2005,
BBA began to grow quickly. The company hired the top engineers and designers and saw
double-digit growth. In 2006, Barros wanted to expand the company, but he insisted on having
control over every aspect of it. Ultimately, he was looking for someone to fund the expansion in
line with his goals, inclinations, and vision.
The American Automotive Inc. was founded in 1955 by Alan A. Smith in Michigan. In
the fourth position in the industry, Smith was producing interior parts such floor consoles,
overhead components, lighting, instrument panels and cockpits, and seats. Being a publicly listed
company, Smith made sure all of its employees looked amazing.
In February 2007, an agreement to merge was struck between the two companies. The
Smiths paid $160 million to buy BBA. This arrangement had been in the works for almost a year
before the promise was made. Even if there were some similarities, there would still have been a
lot of differences between the two. All companies served the same customer base and were
involved in the development of car upholstery (Jaguar and Mercedes). They expected BBA to
supply the extravagance and Smiths to supply the necessities for the interior. But there were also
differences in the products and services. BBA only catered to a niche market; it did not serve a
mass-producing market. Smiths manufactured their products in vast quantities with little room
for customization.
Key Issues
This did not transpire, despite expectations that the combination of Smiths and BBA
would rank among the automotive industry's most prosperous unions. There were several issues
between the two companies after the merger. Although Smiths first thought that BBA would
become part of their corporate structure, both companies meant to keep their unique identities.
Barros was determined to keep control of BBA and uphold the reputation of the business. BBA's
bespoke goods did not follow the Smiths' one-size-fits-all policy, even though it was meant to be
extended to the sales team as well. Smiths recognized that marketing to high-end customers
required a different approach than selling to bulk producers. Although they thought the products
would complement each other nicely on paper, the truth was quite different.
Post-Merger Integration
The post-merger integration and change management strategies that were suggested were
completely ineffective. Both companies refused to abide by the guidelines and suggested
practices of the other. Customers of Smiths' own departed because they perceived the merger as a
threat. Smiths needed to perform a SWOT analysis and a detailed investigation of BBA. This
will disclose every one of their benefits, drawbacks, chances, and risks in relation to the market.
Smiths might have avoided this purchase if they had conducted adequate research. Rather, the
merger resulted in cost-cutting steps including layoffs, which started with BBA employees.
Additionally, the BBA goods had more time for research and development, which resulted in the
Smiths product not meeting industry standards. The employees at Smiths lacked a strong sense of
drive and purpose. If the executives of both companies had supported change management
among their employees, there could have been a greater chance that the merger would have been
successful. Setting a great example, leading by example, and creating change training would be
necessary to fully integrate both organizations into a unified hierarchy. However, the expected
perfect merger collapsed after just 13 months due to the lack of change management training.
Recommendations
The life science firm in the course scenario could have to deal with a variety of post-
acquisition risks and issues. The three most common risks and issues are unexpected results,
inadequate planning, and people and cultural differences. These three risks and issues need to be
addressed and managed using best practices for change management.
Clear goal-setting, honesty, reassuring and teaching teams, encouraging communication,
listening, utilizing leaders, employee empowerment, and recognizing and rewarding the team are
some examples of these best practices. Following these best practices will entail addressing and
resolving any potential risks and challenges related to an acquisition. The largest obstacle is
usually discovering unexpected results once that merger or acquisition is finalized. Every step of
the due diligence process needs to be finished completely, both before and during the transaction.
The role that both companies will employ the most will be middle management. These
supervisors know a number of processes and shoulder a great deal of responsibility. We have a
chance to make the post-acquisition effective if we can convince middle management from both
companies to work together, resolve conflicts, and adapt to change.
