Managing Risks during Organizational Changes

Various studies have shown that mergers have failure rates of more than 50 percent.
One recent study found 83 percent of all mergers fail to create value and half actually destroy value. This is an abysmal record.
What is particularly amazing is that in polling the boards of the companies involved in those same mergers, over 80 percent of the board members thought their acquisitions had created value.

DEFINITIONS:

Process Safety Management: A program or activity involving the aplication of management principles and analytical techniques to ensure the safety of process facilities.

Management of Change: A system to identify, review and aprove all modifications to equipment, procedures, rawmaterials, and processing conditions, other than â??replacementin kindâ?, prior to implementation.

Organizational Change: Any change in position or responsibility in an organization or any change to an organizational policy or procedure that affects process safety.

Organizational Change Management: A method of examining proposed changes in the structure or organization of a company(orunitthereof) to determine wheter the changes in troduce new hazards or increase the risk to employee health and safety, the environment, or the surrounding community.

MODIFICATION OF WORKING CONDITIONS (OCM)

Modification to working hours and shift schedules;
The opportunity or requirement to work overtime;
Relocation of personnel;
Changes to staffing arrangements in relation to:
â?¢Startups, Shutdowns, turnarounds, upsets;
â?¢Emergency conditions;
â?¢Severe weather events during which inadequate Manpower can have devastating consequences.

CASE STUDY: ESSO â??LONGFORD, VICTORIA, AUSTRALIA (1998)
Decision to transfer all engineers from the facility in Longford to a location in Melbourne as part of restructuring agenda. This relocation ocurred in 1992. The only engineer to remain at the facility was the plant manager. The others were available by telefone for inquires from the staff.

DOWNSIZING EXAMPLES(OCM)

Reasons for degrated safety performance:
ï?¼Early retirement of competente personnel;
ï?¼Major investments projects;
ï?¼Neglected maintenance;
ï?¼Loss of competente personnel to early retirement;
ï?¼Decreased maintenance;
ï?¼Others

CONCLUSION

The implementation of an organizational change management system, can be more complex than the implementation of a MOC system involving more technical issues such as design, facilities, etc...
WHY?
ï?§Many OC`s are related to business demands for cost and investments reduction;
ï?§headcount reduction;
ï?§Reduction of work processes;
ï?§Quickness in changes during integrations, acquisitions, demobilization etc.

WE RECCOMEND-SUPPORT THE ORGANIZATIONAL CHANGE AND MERGER & ACQUISITION PROCESS AND PROCEDURE TO AVOID ACCIDENTS AND INCIDENTS