Below is the case analysis I did for Wellstone Consulting:

There are a number of key issues facing Wellstone Consulting with the impending merger.  The first and most important issue is time.  Oracle has just performed a hostile takeover on PeopleSoft.  In order to stay competitive in the market and ensure business continuation, Wellstone needs to adjust its strategy and tactics as quickly as possible. The most likely possibility is a merger with Keymark International, a consulting firm of similar size.  The key issues with the merger are the costs related to organizational restructuring, business relocation, and lost wages during this process.

Organizational Restructuring

With respect to organizational restructuring, Wellstone is currently divided into four business sectors, Commercial, Public, Education, and Higher Education, while Keymark is organized geographically.  When these two firms merge, a single headquarters needs to be established as well.  In terms of bureaucracy, it must be determined who will hold management positions at the newly combined firm and how that will affect decision-making power within the organization.

Culture Changes

The culture of each firm needs to be assessed as well.  Wellstone is currently structured in a very rigid manner, while Keymark has maintained an entrepreneurial feel.  Ironically, Keymark’s culture is very similar to the culture that Wellstone Consulting used to have.  Strategy will need to be considered as well.  It appears that the strategies of the two firms are very similar, but some adjustments may need to be made.  Finally, the members of the integration team need to be selected.  These individuals will play a crucial role in the change process and will therefore need to be selected very carefully.

Organizational Layout

In terms of the overall organizational layout post-merger, Keymark’s structure will be merged with Wellstone and flattened in order to be leaner.  The Board of Directors will preside over the company, with the CEO reporting to it.  Under the CEO will be the VP of Sales, CFO, and Principal/Delivery Director.  The VP of Sales will be chosen from among Wellstone multiple VPs of Sales and Keymark’s VP of Sales; the most qualified applicant will take the position.  Internal interviews will be used and performance appraisals will be reviewed in order to determine who is most qualified for the position.

Reporting to the VP of Sales will be general managers of Higher Education, the Public Sector and the Commercial Sector; each respective sector will have its own sales representatives just as before.  The Finance, Marketing and Legal departments will report to the CFO; the HR department of Wellstone will be added to the organizational structure and merged with the Managed Services department from Keymark.  Finally, under the Principal/Delivery Director will be the Keymark consultants from the past.

The Wellstone executives will be moved to the Atlanta, Georgia headquarters of Keymark.  All other Wellstone employees that have not been laid off will be required to travel and work remotely following the “virtual office” concept of Keymark.  The Wellstone location in Houston, Texas will still be leased, and it will be downsized both in size and number of back office staff. We plan to keep this location so that any employees nearby can use it as a central meeting location.  The necessity of this space and any back office staff located there will be reassessed one year after the merger.

In order for the change to be successful, we have mapped out a strategy pre- and post-merger to raise awareness of the change and its necessity, implement the new organizational structure and strategy, combat resistance and obtain feedback from all levels of the organization, and reassess the change at key milestones to determine any necessary modifications.  Pre-merger a newsletter will go out to all the Wellstone Consulting and Keymark employees providing initial awareness and education about the two companies, the current business climate, and the benefits of the merger.  Within a week, the head of each company will address their entire employee base separately addressing the information in the newsletter, expanding on the implementation and necessity, and addressing any initial concerns.

Pre-Post Merger Planning

At this time the employees will also be introduced to a “merger portal” on the company intranet that will be updated with information on the changes taking place.  This will provide accessible information to the employee base and combat rumors.  The integration and implementation teams will then be created.  The integration team will be comprised of the VP of Sales, the COO, and the CFO and they will report directly to the CEO.  The implementation team will be comprised of the managers from the tier below the implementation team from each segment.

Integration Team Responsibilities

The integration team in conjunction with the CEO will develop the restructuring and change strategies, present them to the integration team, and receive feedback from that team and change the strategy accordingly. The implementation team will then own the task of putting the changes into place within their own unit, assessing the effectiveness of the change, and working to resolve any resistance.  While undergoing these tasks, the implementation team can also use the integration team as a resource for any issues.  The restructuring will then take place, including layoffs, scaling down of the Houston office, relocation of the executives and other employees, and the implementation of the new compensation and benefits structure which will include two compensation options (100% hourly or 100% salary) and two benefit package options (the same as Keymark had in place previously).

Compensation & Benefits Structure

The compensation and benefit structure will be introduced to the employees during the change process, but their current compensation and benefits will remain the same until year end and they will then undergo an annual enrollment period yearly where they can change their elections.

Once the merger has fully taken place, we want the retained employees from both companies to become acclimated with one another in order to create a unified workforce.  The best way to create this cohesion is to fly all of them to the “new” headquarters in Atlanta.  Although this may seem like a significant expense, we feel it is necessary to identify and deal with resistance and help all of the employees to understand their importance to the company.

Role of the CEO

Once all employees have gathered, the CEO will welcome everyone and fully explain the changes that have taken place.  This includes the decision that the company has made in regard to their compensation and benefits plans and when they will roll out.  They will explain how this will help them remain competitive in their industry and how the changes will benefit them.  The CEO’s speech will be a time to energize the employees and reassure them that all the changes and are complete.  They will celebrate the success of the merger.

After the CEO addresses the company, the employees and managers will break off into smaller sections for town hall style meetings according to their new organizational structure to help them understand how their department works and who they will work with.  This will strengthen the bonds of the employees with each other, as well as show each employee their importance within the organization.  Introducing themselves will help to support the bonds within the company, allowing them to realize that they are more than just a number.  This would also be an ideal time to open the floor for all employees to speak about what is on their minds and voice any concerns that they may have.  This is an opportunity for the management to explain their reasons for any strategies implemented, and learn of any resistance that they may need to solve.

Timeline for the Merger

The timeline for the merger is 22 months from the beginning of the implementation through the follow up assessments one year post organizational structure change.  Present: We begin by telling the employees of the oncoming merger and the reasoning behind it.  This will create a sense of urgency and allow them to prepare for the next steps.  A week later the CEO of each company has a meeting with the employees to explain in detail the coming timeline and what to expect in the future.  This will allow for a level of transparency, and answer any questions so that fear and rumors do not run rampant.  Two months after the official announcement and meeting, the executives and managers will be chosen for their roles within the organization.  At this time, those that are chosen for the management positions will join either the integration team or the implementation team, according to their job.  Six months into the merger, the teams will have their vision, strategy and tactics decided and begin implementing them.  This includes internal interviews, lay-offs, downsizing of the Houston office, and relocations.

By ten months, all strategies should be fully implemented.  The merger is complete.  All layoffs, promotions, relocations will have taken place.  The Houston office will have downsized to a smaller location, and all visions and tactics within each department will have been shared and implemented.  At sixteen months, six months after the merger has taken place, a newsletter with the success will be sent out.  This will be a time to celebrate with the employee all the new changes that have taken place.  They will share stories of employees who were change leaders, and continue to support enthusiasm for the company.

Twenty-two months, a full year after the merger, will be a time for reassessment.  A survey will be sent out to all employees to feel the pulse of the general feelings toward the company.  They will look at turn-over rates, the rate at which work gets done, and decide whether they need more or less employees to make the company run at its more efficient.  Finances will also be reviewed, to make sure that the organization is running smoothly and profitably.  This follow up phase will be essential to gauge the success and sustainability of the new organizational structure and management.


As you can see, we planned out many details for Wellstone.  We discussed every possible scenario to ensure that their team would be in great hands with the project leads once we started it.

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