Smart’s Absorption of Piltel Employees: A Historical Narrative from Key Changemakers

Abstract

Mergers and acquisitions are often regarded by organizations as possible coping mechanisms in a dynamic environment. Most existing books and studies rarely focus on the human side of mergers and acquisitions. This sought to be a historical study of the absorption of Piltel personnel by Smart during their integration, as narrated by the key changemakers in the event. The research made use of the qualitative design and was descriptive in nature. The historical research method was used. The secondary sources of information were documents from the company, as well as newspaper clippings about the event. The primary sources of information were the key changemakers in the event, as defined by Kanter, Stein, and Jicks based on Lewin’s Three-Step model of organizational change. The change strategists were the Group Heads of Smart’s Legal, Human Resource (HR), Finance and Public Affairs departments. The change implementors were one HR manager from Piltel and the HR Group Head of Smart. The last group, or the change recipients, consisted of four former Piltel personnel and four Smart employees who witnessed the event. The informants were questioned in a semi-structured manner, using a three-set interview schedule. Transcription was done and the summarized answers were organized on a master data sheet. This served as the basis for the tables presented and the discussion of the gathered data in Chapter IV. The events and activities were also narrated in a chronological manner. In addition, the communication activities were isolated and tabulated to illustrate the communication component of the integration. At the time of the integration, the Philippine telecommunications industry was experiencing a boom due to the popularity of text messaging; competition was intense. Smart and Piltel were both subsidiaries of PLDT. Smart was in an expansion mode and shifted to a new technology. Piltel was experiencing heavy losses then and was going through debt restructuring and organizational streamlining. PLDT aimed to consolidate all of its wireless services, thus Smart and Piltel integrated in the year 2000. One aspect of the integration was the absorption of the Piltel personnel by Smart. The direction and planning aspect for the absorption took place from May to August 2000. It was announced in August 8, 2000, which also signaled the start of the implementation stage led by the HR team. Within the week, 800 Piltel employees were given termination letters and job offers. Those who accepted were hired, effective September 16, 2000 for the supervisors and managers and non-union employees and October 16, 2000 for the rank and file and union members. Communication occurred in all Stages of the integration and absorption. The CEO, HR team and key managers informed the Piltel and Smart employees about the various aspects of the integration. HR help desks were available for inquiries and feedback. The majority of communication activities were interpersonal and done face to face. It was considered a very smooth transition; the Piltel employees were successfully absorbed by Smart. Reasons for this included good planning, fair evaluation, personal distribution of the pink slips and job offers, face to face sessions, and the direct support of the CEO of Smart and Piltel, Mr. Napoleon Nazareno. The following implications came up in the research. First, the external and internal circumstances of the two organizations in 2000 were relevant to the integration. Potential challenges were resolved through a meticulous planning process and effective communication strategies. Unlike in a typical merger where the acquiring company would dominate proceedings, the implementors of the absorption came from both Smart and Piltel. Communication, particularly interpersonal, was seen as pervasive. The timing and pacing of the absorption also helped. Lastly, the interviews showed that the leadership of Mr. Napoleon Nazareno was instrumental to the success of the transition. The following are suggested to those who wish to do further research about the mergers in general and the Smart — Piltel integration in particular. First, research could be done from the point of view of Piltel, or the acquired company in another merger situation. A quantitative or qualitative study on the impact of the merger on the organization can be carried out. A study of mergers in the Philippines in order to determine success factors can also be conducted. Lastly, one can research about the relationship of the integration’s success with the leadership style of the CEO.