Kelon did a poor job at managing the acquisition integration process throughout the merging of the two companies. Since there was no formal plan for keeping the best employees of Huabao, people quickly left for better opportunities. In order to improve the performance of the combined companies for the rest of the year Mr. Wang needs to first restructure management immediately and move on; address corporate culture differences in a way that gets new coworkers collaborating together; and hold a planning session with members of the retained Huabao management to create a quarterly strategy timeline.

Restructure
Many high-level Huabao executives and middle management have departed from the company. When companies are purchased there is a feeling that the acquiring company will put its own managers in charge and begin to layoff the rest. There has yet to be any formal announcement about restructuring and this kind of uncertainty could become debilitating to employee performance.

When making the restructuring announcement the message needs to be clear and done so with care towards the employees who are being laid off. Kelon needs to show that the news they are communicating is unfavorable but essential. Delivering a respectful message will improve Kelon’s reputation to the Huabao employees who do not lose their jobs. Most importantly, make the necessary moves to remove redundancy and then move on with the new team of employees who are committed to the success of the merged company.

Strategy Timeline
In order to feel like a united merged company, Kelon and Huabao management need opportunities to socialize and collaborate together. Part of Chinese culture is guanxi, however without knowing your fellow employee’s history and background it is difficult to build trust and work together. Mangers should meet to discuss the merged company’s strengths and weaknesses