The smallercompany appears to be a liability in that it has financial struggles.In fact, the insurance firm had made some bad investments that led toconsiderable losses. The entity had also paid out several claims inthe aftermath of a recent storm. Given these circumstances, it iscritical to develop and adopt a plan that would ensure a smoothmerger. The proposal includes recommendations in each segment oforganizational behavior as follows:

  • The company needs to organize several luncheons to allow employees from both firms to develop acquaintances. Hosting private events also helps to modify the negative perceptions of the smaller enterprise (McShane &amp Von Glinow, 2013). As discussed, the deplorable financial state of the smaller firm may cause employees from the larger company to attribute such upheavals to mismanagement. It is also expected that some level of hostility would permeate the initial interactions. In this regard, the management should prepare and distribute factual material about the smaller company. Such a step would help to minimize propaganda and eliminate bias (McShane &amp Von Glinow, 2013).

  • The management needs to organize for outdoor events and team-building retreats. Such events would not only deepen existing friendships but also reduce work-related stress (Taylor, 2015). Merging the operations of two companies places an additional strain on all workers as they try to make adjustments. During corporate meetings, excellent employees can be honored with promotions or financial rewards. Recognizing the diligence and reliability of some staff members would serve as employee motivation (Conrad, Ghosh, &amp Isaacson, 2015). Other members of the labor force would be encouraged to work harder within the framework of the merger rather than insist on previous routines.

  • The organization needs to adopt policies that encourage team processes without understating the rational choice paradigm. Granted, each employee from both companies would customarily make decisions that maximize their self-interest (McShane &amp Von Glinow, 2013). Nevertheless, such an allowance needs to be checked to ensure that it does not superimpose the merger’s interests. Consequently, mixed departments should be formed to inculcate company policies and procedures into new employees. Close interaction with other staff members would help the new workers to learn team processes (McShane &amp Von Glinow, 2013). Inevitably, the strengths and weaknesses of individual employees determine their precise groupings into various departments.

  • The company must enhance its channels of communication to accommodate a higher level of correspondence and collaboration (McShane &amp Von Glinow, 2013). Managers need to adopt appropriate means of communication to relay instructions to their subordinates. Likewise, regular workers need to have unlimited avenues to communicate to their departmental heads and provide feedback. Notably, the merger would have experienced leaders from both firms. Therefore, the power structure and organizational culture should perpetrate the original company’s practices (Kargas &amp Varoutas, 2015).

  • Integrating the smaller company into the current organizational model presents particular risks especially since the comprehensive reasons for its underperformance are not immediately discernible. Consequently, maintaining the current corporate culture is important to ensure stability and mitigate risks (Kargas &amp Varoutas, 2015). Although some minor adjustments may be needed, it is essential to maintain the general organizational structure (Kargas &amp Varoutas, 2015). Therefore, the larger company should have more managers and Board members than the smaller firm.

  • The merger should be implemented with strict adherence to ethical issues. The liabilities and assets of the smaller company would be attributed to the current entity. In this regard, sly practices could be used to overstate the assets while minimizing the liabilities to enhance the firm’s profile (McShane &amp Von Glinow, 2013). Such tactics betray the clients’ trust by portraying a false image of the enterprise. Furthermore, creative accounting techniques may be utilized to reduce the organization’s tax obligations (McShane &amp Von Glinow, 2013). Therefore, conforming to ethical guidelines prevents probable reputational damage that could compromise marketability and profitability.


Conrad, D., Ghosh, A., &amp Isaacson, M. (2015). Employee motivationfactors. International Journal of Public Leadership, 11(2),92-106. doi: 10.1108/IJPL-01-2015-0005

Kargas, A. D., &amp Varoutas, D. (2015). On the relation betweenorganizational culture and leadership: An empirical analysis. CogentBusiness &amp Management, 2(1), 1055953. doi:10.1080/23311975.2015.1055953

McShane, S. L., &amp Von Glinow, M. A. (2013). Organizationalbehavior: Emerging knowledge, global reality (6th ed.).New York, NY: McGraw-Hill/Irwin.

Taylor, B. M. (2015). The integrated dynamics of motivation andperformance in the workplace. Performance Improvement, 54(5),28-37. doi: 10.1002/pfi.21481