A-summary of the case Deficit in water supply in USA and Canada USA facing drought conditions in 2003 Environmental authorities concern over Water Conservation Proposed “pricing” as a means to stimulate conservation Estimated Price elasticity of demand for water : Households: -0.2 to -0.4 Business Users: -0.5 to -0.8 B-Justification of the problem 1-one critical reason for failure in mergers and acquisitions is poor planning and manage integration. Further underestimating the challenges involved in blending corporate cultures 2-Bringing more bureaucracy and decision making at the top was harmful for the success of the business This causes the employees to lose enthusiasm about their work and their organization, and a drop in morale and organizational pride follows the merger. Countless hours are spent feeding the rumor mill, and large numbers of people adopt a wait-and-see attitude. Results usually suffer and customers are lost 3- Fear of the unknown The employees of both companies are not aware of the changes at the beginning. They can feel threatened by the combination. They do not have the feeling the opportunity of growth and development is threatened. The employees prefer to have a secure future and any changes within their workplace are desired to be known beforehand. Psychologically it is quite difficult to accept even minor changes, mergers and acquisitions are almost often treated as “hard times”, and, of course, the secrecy has caused negative effect in the acceptance of the deal among the employees The consequences of not dealing effectively with cultural integration issues can be devastating. 4-Key human problem areas **Loss of key people If not handled right, the wrong people will leave and the venture can be jeopardized. **Judgment versus respect for differences There is a tendency for each group to be judgmental about the way things are handled by the other. Rather than respecting and building on differences, people frequently enter into right and wrong judgments. C-List of alternatives 1- Developing a precise transition plan Educating the companies on the modern concepts of strategic planning in the Mergers and Acquisition process. 2- Retain key leaders. It's essential to identify those people critical to continued success and initiate a plan to ensure that these key people stay and remain engaged and aligned. 3-It might be beneficial to leave the merged company’s culture and way of doing business “as is” for a certain time. If the changes are to take place, the employees of both companies should feel they are one team and they both should learn new rules of behavior and gain common experience in the corporate culture D-Evaluation of alternatives 1- Developing a precise transition plan **A) Create an integration plan. Do due diligence on the cultures both before and after as systematically as you do on the numbers, and create a specific cultural integration plan led by the CEO and senior team, not just delegated to an HR team. **B) Communicate the vision. The process of creating a vision, mission, and shared values creates excitement, inspiration and commitment with all people working for a new future goal as opposed to living in the past **C) Address the new organizational structure as early as possible. **D) Be clear about the nature of the union and be willing to talk about. Treating the employees as valuable corporate capital instead of just incidental appendages to a business deal. Accepting and appreciating employee abilities and their cultural values of is very necessary to gain their trust and commitment. Also keeping the employees informed about the changes that are going to happen will build their confidence towards the company. 2-Retain key leaders Make sure the company’s leaders communicates in person as much as possible Successful mergers only happen when senior managers make themselves visible and accessible to all employees affected by the merger and promote the benefits at all levels. Employees at all levels need to experi- ence the buy-in and support of their leaders for the merger or acquisition When merging, it is very important to make sure employees know their job is secure, and they will not suffer. It is often better to emphasize nothing will change or that the changes will be minor, and will not worsen the course of business life. *Recommendations I believe that alternative no 1 and 2 must be done together to create ***a new combined entity, and ensures inspiration and alignment of people around vision, mission, and shared values ***a sense of community is created sooner since shared vision and values link individuals to the organization and bind people together.