Merger and Acquisition-Duke Energy and Progress Energy

1403 words 6 pages
Duke Energy and Progress Energy to Merge



Change is necessary if organizations are to survive and thrive, and the sharp downturn in the economy is forcing leaders in all industries to take a fresh look at how they do business. Recently, most companies in the financial services industry faced with a need for dramatic change after mortgage crisis and the Wall Street meltdown. (Daft, 2011, p. 460)
Change is an ongoing and never-ending process of organizational life. The intensity of organizational change can range from the nominal to the radical. As Clark, Gioia, Ketchen, and Thomas (2010) mentioned, three degrees of change intensity are distinguished according to the amount of
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* Anxiety: Possible negative impact of M&A and uncertainty may increase employee anxiety, which in turn, reduce productivity and cause various psychological and physical illnesses. Unfortunately, merging companies (Duke Energy and Progress Energy) have confirmed the potential layoff may occur after merger, but they did not give any detail about it. Instead, they should explicitly explain their plan regarding layoff and replacements to reduce uncertainty and increase morale of employees. * Social Identity & Acculturation: M&A requires new identity and unique culture that may not be exactly inherited from both companies. It may different than previous ones. In our case, I would be careful about employees of Progress Energy. Because after merger, they will become Duke Energy employees and most probably confused about their identity and culture. * Role Conflict& Job Characteristic Change: M&A significantly affects roles, job characteristics, career path, status differences, geographic transfer, etc. These changes and ambiguities may lead lower motivation, commitment and job satisfaction of employees. In our real case, there are two CEO and one of them will keep its position. According to press releases, While Rogers will become consultant and board member, Johnson will keep his position. * Organizational Justice: Employees’ perception is one of the most important key factors for success of M&A. If they