There are two types of acquisitions - hostile takeovers and friendly acquisitions. If you were involved in a hostile takeover, how would you deal with the employees of the acquired firm? Explain with examples.

In case of a friendly takeover, the approval of both acquiring company and target company's board of directors is required. Shareholders and management of both parties mutually agree in such a deal.

In case of a hostile takeover, the situation is exactly the opposite. A strong company acquires a weak, loss making company. In such a case, it is acquisition by power and dominance and the agreement by board of directors of the target company is not essential.

Following could be the strategy in dealing with employees of the acquired firm:

Select: For example, top performing individuals are identified and are called for a meeting and individuals with proven leadership record and influence are selected to lead and thus, align the workforce with new policies and objectives.

Engage: It means to involve individuals in the policy making process. For example, before purchasing a new advanced machinery for production, the representatives of work force are called forth and their ideas and inputs are taken. This develops a sense of belongingness and creates a rapport.

Cater to the needs of employees: It is necessary to pay attention to the needs and to take care of the interests of the employees. To ensure this adequate compensation system should exist and employees need to be motivated enough via incentives.