Managing industrial relations in mergers and acquisitions: The case study of AngloGold Ashanti

Abstract

Mergers and acquisitions have become the dominant mode of growth for firms seeking competitive advantage in an increasingly complex and global business economy. Research indicates, however, that many mergers have not resulted in the expected benefits, in part because business organisations have neglected the human resource and or the industrial relations aspects of the change. The study which looked at the management of industrial relations in the merger between Ashanti Goldfields Company and Anglogold focused on the effective use of communication management, worker relations and worker’s integration into the merger. Workers’ benefits from the merger were also investigated. Shop floor workers, union executives and managers totaling 194 were randomly sampled to complete questionnaires to provide data for the study. The Statistical Product and Service Solutions software (SPSS) was used in the analysis. Some of the findings are that: the negotiation process sometimes took too long a time for people to reach consensus. Formal communication was absent or inadequate and a major incentive like training was immediately cut off after the merger. It was recommended that union and management should pursue interest based bargaining but not be seen as pulling apart. Also to undertake a merger in future, formal communication to majority of the workforce will be required. Thirdly, a major incentive like training should not be cut off immediately after merger since that could lead to de-motivation of the workforce and reduction in productivity.