Organisational culture and operational challenges of the merger of Alarmcom with Siemens HVAC Products

Siemens Limited Australia (SIL) purchased Alarmcom in 2001. Alarmcom is a medium sized Australian company that sells fire and safety products, security and intrusion products and closed-circuit television (CCTV) equipment. Following the acquisition by SIL, Alarmcom continued to run autonomously until 2005, when the decision was made to integrate Alarmcom into the only other product sales business unit within Siemens – i.e. Siemens HVAC Products. This project is a case study of the integration of Alarmcom into Siemens HVAC Products. Through consideration of this case study, it is aimed to ascertain and describe the challenges involved when two companies merge, to delineate the change management and operational processes involved in the integration of two companies, determine how successful the merger was based on the extent to which the specific aims and objectives of the merger were realised and to provide recommendations for future mergers and acquisitions. Data gathered to achieve the specific aims and objectives of the case study was gained by distributing a questionnaire to the employees of Siemens BT Products. It was found that the organisational culture-related challenges of mergers and acquisitions are different for the members of the acquiring company and those of the acquired company. However, the operational challenges were similar for the employees of both companies. The key organisational culture-related challenges were to do with becoming familiar with a new work environment, whereas the operational challenges related to learning to use new systems and new processes. There was significant difference in opinion between various groups of employees of the merged entity, Siemens BT Products concerning what processes were involved in the integration, so no conclusive processes could be determined with the exception of developing and reviewing an integration plan. Also, when judged against what the intentions and objectives of the merger were, it was found that the integration of Alarmcom into Siemens HVAC Products was not successful as the employees of Siemens BT Products felt that the intended outcomes had not been realised. Many different recommendations found in current business literature were presented to the employees of Siemens BT Products who were asked to denote whether they agreed with each of the proposed recommendations. The employees agreed with all sixty-four recommendations listed pertaining to change management and operational processes which could be taken during a merger or the integration of an acquisition. They most strongly agreed with recommendations regarding having effective two-way communication between employees and managers of the integration, regularly reviewing the progress of the integration and maintaining a sense of order and focus on retaining talented individuals, particularly from the acquired company.