UGB371: In March 2020, Rapid Supply Electronics Components Ltd (RSEC) acquired Electronic BitsFast (EBF): managing and leading change Assignment, UOS, Malaysia

• Case study: Rapid Supply Electronics Components

  The scenario
  In March 2020, Rapid Supply Electronics Components Ltd (RSEC) acquired ElectronicBitsFast (EBF). Both companies operate across the UK, supplying electronic components to a wide range of customers. A number of factors had motivated the acquisition including EBF’s integrated approach to managing sales, logistics and customer service and the brand values and the customer service principles that had contributed to its rapid growth over the previous three years.

  RSEC is a decentralized organization with a small corporate head office located in London and a regional structure that includes six business units serving different parts of the UK. Each of these business units has considerable autonomy including full responsibility for its own sales force, distribution operation and customer service department. EBF, on the other hand, has a centralized structure and most functions, including sales, logistics and customer service, are located at its head office in Cambridge.

  Eleven months after the acquisition, the RSEC Board announced its intention to integrate all sales, logistics and customer service functions across the merged company and to manage these functions from what had been EBF’s head office in Cambridge. The Board had decided to make this change early in 2020, before the acquisition had been finalized. Integrating all sales, logistics and customer service functions had been identified as one of the ways of creating and capturing value from the merger. However, the plan had not been implemented immediately but put on hold until after new financial controls had been introduced.

The Board, with the help of the business systems manager from the original RSEC organization, developed a change plan. This focused on designing and implementing a new organizational structure for sales, logistics and customer service and project managing the physical move, introducing RSEC staff to the EBF SAP system, creating new phone and IT networks and constructing a new customer service facility to accommodate the enlarged customer service centre in Cambridge.

The business systems manager was appointed as the change manager because he was seen to have the technical expertise required to lead the change. He created a small project team to elaborate and implement the Board’s plan.

Board members put considerable pressure on the project team to complete the restructuring as quickly as possible because they felt a need to demonstrate to shareholders that the acquisition of EBF had been a good investment. This sense of urgency led to the business systems manager adopting a top-down directive approach. Consequently, little attention was given to the opinions of those who were affected by the change or to those who felt that they could offer constructive feedback on the change plan or the way it was being implemented.

The first that most employees, including managers and staff in the affected departments, knew of the plan was when it was announced in an email communication to all staff. The announcement was not well received. There were several reasons for this:

• All employees had recently experienced a worrying upheaval (the acquisition) and, after nearly a year, they were just settling down to a new sense of normality.
• Staff who had worked for RSEC before the acquisition had presumed that because RSEC had acquired EBF, their way of working was superior and would be rolled out across the new mergedcompany.
• They felt let down when they realised that this was not going to happen and wondered where it would all end.
• Staff working in the original RSEC sales, logistics and customer service departments failed to see any need for a centralised integrated function. From their perspective, their separate departments were performing well in every region.
• Employees in the affected departments recognized that many of them would be required to relocate. While some would not need to move (for example, most members of the sales teams and drivers responsible for making deliveries to customers), this was not made clear until some time after the initial announcement.
• Many of the managers working in the RSEC regional offices anticipated that they would be surplus to requirements after the reorganization.

Answer

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