Harvard Case - MakeMyTrip and Goibibo Merger: Minimum People Disruption For Maximum Customer Advantage
"MakeMyTrip and Goibibo Merger: Minimum People Disruption For Maximum Customer Advantage" Harvard business case study is written by Debolina Dutta, Anupama Kondayya. It deals with the challenges in the field of Human Resource Management. The case study is 18 page(s) long and it was first published on : Nov 15, 2021
At Fern Fort University, we recommend a comprehensive and empathetic approach to integrating MakeMyTrip and Goibibo's workforce, prioritizing employee well-being and maximizing customer advantage. This strategy involves a multi-pronged approach encompassing talent management, organizational culture, and change management practices, ensuring a smooth transition for both employees and customers.
2. Background
The case study revolves around the 2016 merger of MakeMyTrip, India's leading online travel agency, and Goibibo, a rapidly growing competitor. The merger aimed to create a dominant player in the Indian travel market, but it also presented significant challenges in integrating two distinct corporate cultures and managing the potential for employee disruption.
The main protagonists are Deep Kalra, the founder and CEO of MakeMyTrip, and Ashish Kashyap, the founder and CEO of Goibibo. Both leaders faced the critical task of navigating the merger process while ensuring minimal disruption to their respective employees and maximizing the benefits for customers.
3. Analysis of the Case Study
The merger presents a complex scenario requiring a holistic approach to ensure success. To analyze the situation, we can utilize the following frameworks:
1. Mergers and Acquisitions Framework:
- Strategic Rationale: The merger aimed to achieve economies of scale, expand market share, and enhance competitive advantage in the Indian travel market.
- Integration Challenges: The merger involved integrating two distinct corporate cultures, systems, and processes, which required careful planning and execution.
- Post-Merger Integration: The success of the merger depended on effective communication, talent management, and cultural integration strategies.
2. Organizational Change Management Framework:
- Change Management Strategy: The merger required a well-defined change management strategy to minimize resistance, foster employee buy-in, and ensure a smooth transition.
- Communication Plan: Clear and consistent communication was crucial for keeping employees informed about the merger process, addressing concerns, and building trust.
- Training and Development: Training programs were necessary to equip employees with the skills and knowledge required to adapt to the new organizational structure and processes.
3. Human Resource Management Framework:
- Talent Management: The merger presented an opportunity to optimize talent by identifying key skills and aligning them with the new organization's needs.
- Employee Retention: Strategies were needed to retain key talent and minimize employee attrition during the transition period.
- Compensation and Benefits: A fair and equitable compensation and benefits structure was essential to attract and retain talent.
4. Recommendations
To achieve a successful merger with minimal disruption and maximum customer advantage, we recommend the following:
1. Strategic Talent Management:
- Talent Assessment: Conduct a comprehensive assessment of both companies' talent pools, identifying critical skills, leadership potential, and areas for development.
- Talent Pool Optimization: Develop a strategy for integrating the talent pools, focusing on retaining key individuals and creating opportunities for career advancement.
- Cross-Training and Development: Implement cross-training programs to foster collaboration and knowledge sharing between employees from both organizations.
2. Organizational Culture Integration:
- Culture Alignment: Define a shared organizational culture that reflects the best aspects of both companies, emphasizing customer-centricity, innovation, and collaboration.
- Communication and Transparency: Establish clear and consistent communication channels to keep employees informed about the merger process and its impact on their roles and responsibilities.
- Leadership Alignment: Foster a collaborative leadership style that encourages open communication, trust-building, and employee engagement.
3. Change Management Strategy:
- Phased Implementation: Implement the merger in phases, starting with key areas and gradually integrating other functions.
- Employee Engagement: Actively engage employees in the change process, soliciting feedback and addressing concerns.
- Training and Support: Provide comprehensive training programs to equip employees with the skills and knowledge required to operate within the new organizational structure.
4. Customer Focus:
- Enhanced Customer Experience: Leverage the combined resources and expertise to create a seamless and superior customer experience.
- Improved Technology and Analytics: Invest in technology and analytics to enhance customer service, personalize offerings, and optimize operations.
- Customer Feedback Mechanisms: Establish mechanisms for gathering and responding to customer feedback, ensuring continuous improvement.
5. Basis of Recommendations
These recommendations are based on the following considerations:
- Core Competencies and Consistency with Mission: The recommendations align with the core competencies of both companies, focusing on customer service, innovation, and operational efficiency.
- External Customers and Internal Clients: The recommendations prioritize customer satisfaction and employee well-being, ensuring a smooth transition for both groups.
- Competitors: The recommendations aim to create a competitive advantage by leveraging the combined resources and expertise of both companies.
- Attractiveness ' Quantitative Measures: The recommendations are expected to generate significant cost savings, increased market share, and improved customer satisfaction, leading to positive financial returns.
6. Conclusion
By adopting a comprehensive and empathetic approach to integrating the MakeMyTrip and Goibibo workforce, the merger can achieve its strategic objectives while minimizing disruption and maximizing customer advantage. The recommendations outlined above provide a roadmap for achieving this goal, focusing on talent management, organizational culture integration, and change management practices.
7. Discussion
Alternatives Not Selected:
- Rapid Integration: This approach would involve quickly merging all functions and systems, potentially leading to higher disruption and employee dissatisfaction.
- Separate Operations: This approach would maintain separate operations for both companies, limiting the potential for cost savings and synergy.
Risks and Key Assumptions:
- Resistance to Change: Employees may resist the merger process, leading to decreased morale and productivity.
- Cultural Clash: The integration of two distinct corporate cultures could lead to conflicts and misunderstandings.
- Technology Integration Challenges: Integrating disparate IT systems could be complex and time-consuming.
Options Grid:
| Option | Advantages | Disadvantages | Risks |
|---|---|---|---|
| Comprehensive Integration | Maximizes synergy and cost savings | Higher disruption and potential for employee dissatisfaction | Resistance to change, cultural clash, technology integration challenges |
| Phased Integration | Minimizes disruption and allows for gradual adaptation | Slower implementation and potential for delays | Resistance to change, cultural clash, technology integration challenges |
| Separate Operations | Minimizes disruption and maintains existing cultures | Limits potential for synergy and cost savings | Reduced competitive advantage, potential for duplication of effort |
8. Next Steps
- Develop a detailed implementation plan: Outline specific timelines, milestones, and responsibilities for each stage of the integration process.
- Establish a dedicated integration team: Assemble a team of experienced professionals from both companies to oversee the merger process.
- Communicate regularly with employees: Provide frequent updates and address concerns to ensure transparency and build trust.
- Monitor progress and make adjustments: Continuously monitor the integration process and make necessary adjustments to ensure a successful outcome.
By implementing these recommendations and taking a proactive approach to managing the merger process, MakeMyTrip and Goibibo can create a strong and unified organization that delivers exceptional customer experiences and achieves its strategic goals.
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Case Description
In 2016, MakeMyTrip, a prominent player in the online booking of travel space in India, moved to acquire arch-rival Goibibo (GI) to consolidate market share, build complementary synergies, and enable profitable growth. MMT was a leader in the online travel and premium hotel booking segment. GI penetrated the economy hotel segment and acquired redBus (RB) to diversify into the online bus booking space. Due to the merger, the processes of policies of the three entities in various aspects of business had to be aligned for smooth operations so as to capitalize on the expected synergies of the separate entities. Key priorities during a merger are in engaging and retaining critical talent and aligning human resource management policies and practices, including employer branding, talent acquisition (internal and external), performance management, benefits and policies, and separation and exits. Strategic talent decisions and cultural alignment can significantly influence the capabilities and performance needed of the workforce after a merger and acquisition (M&A). An integration project team had been commissioned for this and was expected to make recommendations to achieve this standardization. The case examines the challenges of identifying all aspects of people systems and processes that influence organizational culture. Alignment and standardization of the disparate organizational policies of the merging entities and communication of the final policies and practices require balancing organizational and employee needs and expectations. The case highlights the need to prioritize the integration of functions based on strategic organizational requirements.
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