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Case Study of Emerging Issues in HRM

Asian Paints acquired Singapore company Berger International in 2002. While it retained some subsidiaries, it sold others that were not generating sufficient cash flows or in stagnating markets. Asian Paints learned that cultural integration and developing local talent were essential for success overseas. It addressed cultural issues by collaborating closely with employees. After acquisitions, Asian Paints prioritized rapid integration, sharing best practices across units through technology, people assignments, and new initiatives to boost efficiency and add value to acquired operations. Communication helped reduce apprehensions about the acquisitions.

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Karan Pratap Singh
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147 views

Case Study of Emerging Issues in HRM

Asian Paints acquired Singapore company Berger International in 2002. While it retained some subsidiaries, it sold others that were not generating sufficient cash flows or in stagnating markets. Asian Paints learned that cultural integration and developing local talent were essential for success overseas. It addressed cultural issues by collaborating closely with employees. After acquisitions, Asian Paints prioritized rapid integration, sharing best practices across units through technology, people assignments, and new initiatives to boost efficiency and add value to acquired operations. Communication helped reduce apprehensions about the acquisitions.

Uploaded by

Karan Pratap Singh
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Case Study

On
“Emerging issues in HRM”
In

Asian Paints

Submitted in the Partial fulfilment of

Master of Business Administration


In

Human Resource Development

SESSION 2019 – 20

Under the Supervision of Submitted By

MR. ABHINAV SRIVASTAVA KARAN PRATAP SINGH

DEPT. OF HRD 1815007

V.B.S. PURVANCHAL UNIVERSITY M.B.A. IVth Semester

JAUNPUR (U.P.) 222003 DEPT. OF HRD

1
CASE STUDY of Asian Paint

In the case of Asian paints, with 51% acquisition of Singapore Company Berger International in
2002, Vice-chairman and MD Dani says he was clear that his company will be choosy in its
operation and not necessarily operate all the ten subsidiaries of Berger. In four year since the
acquisition, Asian paints have sold three subsidiaries (in Malta, Phillpines and Myanmar), Dani’s
motive is clear: to present only in emerging markets and in market that generate cash flows.
“Surely cultural issues play an important role in an acquisition. To handle this carefully, we
spend time with the employees and worked as a team to thrash out the synergies such that the
acquisition generates value.” says Dani.

Critical size helps to spread your fixed cost. At the same time one must always be prepared for
making course correction on the way. We exited out of our ventures in Martius and Malta
because after operating for a while, we found out that the growth of the paint market as well as
the economy was stagnating. So, we took our call and I feel companies should always be
prepared to make such decisions: but what counts in today’s age is the speed of Integration,
opines Dani.

One of the most essential learning from the acquisition was realizing the importance of local
knowledge. When the companies went abroad they realized that it was a whole new ball game:
the market dynamics were all together different. They have to align their products and customer
offerings to cater to each individual market. Along with local understanding, comes the core
issue of localization of latent and the need to develop strong local cadre. A local workforce
brings with it a better understanding of the market, operating environment and customer
preferences. The greatest challenge for an Indian MNCs lies in the area of attracting and
acquiring the local talent for their overseas ventures. As Indian companies globalize they have to
acquire size and market share to stay afloat.

2
The process of Integration Follows an acquisition, but what counts in today’s age is the speed of
Integration and how fast you are able to share organizational best practices within different units.
Along with technology and intellectual integration, emotional integration is also critical, because
in the end, one need to realize that while there are brands, there are also customers and there are
employees.

Take for examples Asian Paints, for its international operations, Asian Paints accomplished the
process of clearing apprehensions about acquisition through its various connect initiatives where
communication plays a key role, followed by effective action. It is now implementing systems
and processes to make these operating as efficient as any world class entity. Asian Paints has
implemented ERP across units to make transaction process more robust. It has flown in people
on special assignments where ever any units had any concern area be it pertaining to supply
chain, marketing or any other function. It has recently rolled out a mega operational efficiency
initiative which focuses on issues like productivity, safety, environment, reducing factory level
losses, planning and control systems, thus adding value to its acquired operations.

3
Q.1 How did Asian Paints handle the cultural issues in the acquired
companies? What is its essential learning’s from the acquisitions?

Answer: - “Surely cultural issues play an important role in an acquisition. To handle this
carefully, we spend time with the employees and worked as a team to thrash out the synergies
such that the acquisition generates value.”

One of the most essential learning from the acquisition was realizing the importance of
knowledge. When the companies went abroad they realized that it was a whole new ball game:
the market dynamics were all together different. They have to align their products and customer
offerings to cater to each individual market.

Along with local understanding, comes the core issue of localization of latent and the need to
develop strong local cadre. A local workforce brings with it a better understanding of the market,
operating environment and customer preferences.

Q.2 What steps did Asian Paints take in the process of integration following
the acquisition?

Answer: - The process of Integration Follows an acquisition, but what counts in today’s age is
the speed of Integration and how fast you are able to share organizational best practices within
different units. Along with technology and intellectual integration, emotional integration is also
critical, because in the end, one need to realize that while there are brands, there are also
customers and there are employees.

Q.3 How did Asian Paints accomplish the process of clearing apprehension
about its acquisitions?

Answer: - Asian Paints accomplished the process of clearing apprehensions about acquisition
through its various connect initiatives where communication plays a key role, followed by
effective action. It is now implementing systems and processes to make these operating as
efficient as any world class entity. It has flown in people on special assignments where ever any
units had any concern area be it pertaining to supply chain, marketing or any other function.

4
It has recently rolled out a mega operational efficiency initiative which focuses on issues like
productivity, safety, environment, reducing factory level losses, planning and control systems,
thus adding value to its acquired operations.

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