INTRODUCTION

6.1 The old clich , the only constant in organisations is change is as true today as it has ever been. Although the volume of mergers and acquisitions has decreased somewhat in the early part of the twenty-first century compared with the late 1990s, business reorganisations, outsourcing and downsizing have continued to occupy many strategic Human Resources professionals. The signs are in 2004 that merger and acquisition activity is now on the increase again. Both types of activity require a high level of risk-awareness and risk management capability on the part of Human Resources professionals to navigate them successfully. A number of studies have indicated that about 70% to 80% of mergers actually destroy value when the new organisation is compared to the constituent organisations; that in 50% of mergers there is a drop in productivity during the first year following the merger; and that less than 25% of acquisitions earn their cost of capital. British businesses undertake major reorganisation on average once every three years. A recent report from the Chartered Institute of Personnel and Development, Reorgan-ising for Success , (CIPD, 2003), indicates that around half of reorganisations fail to achieve their objectives, take longer to implement than planned and cost more than budgeted. In some cases, reorganisations have no positive impact, or even make matters worse.

6.2 It would appear, therefore, that some people in these organisations are not identifying and evaluating the risks appropriately, or, if they are, their implementation capabilities are less than required. This...