Saturday, November 21, 2009

The so-called ‘Letter of Intent’

Have you ever come across situations of sudden disbelief and hurt, when you are told about a verdict made by your loved one, through a third party? When I say loved one, I mean someone who could be your family, friend or for that matter the very company you work for. It's like this feeling that sets-in when a company suddenly makes an off-the-cuff announcement to its employees that its entire business unit is being sold off to a bigger and a better competitor. The sense of betrayal creeps in!

Organic growth Vs. Inorganic growth
Does your company show organic growth is the question the business world is asking. When they say organic growth, it means profits/ sales made by a company from its existing businesses, as opposed to growth that comes from buying other businesses. So, if your balance sheet shows a bursting organic growth, it means that you contribute to the GDP and this definitely is a bull run for you all the way.

But what if your company is not showing the expected organic growth results to survive? What does the company do then? As simple as it gets, the company then either thinks of striking a strategic partnership with another powerful entity through mergers & acquisitions or sells out all it owns to a more powerful listed competitor. The expansion made through this means, is what is called inorganic growth.

Being bought-out can be a nightmare
But has anyone really asked the employees what they really want. I know I am being socialistic here, but I believe, that there should be a balance of socialism and capitalism for a business to survive and to make its employees feel a sense of ownership.

Employees would certainly be in a state of shock, if they came to know that the company they work for and love so much does not owe them anymore and that, very soon someone else would take charge of what & how they would be doing things. Besides this, employees do not even know whether they would have a job or not in the first place. How disgruntled and betrayed can anyone feel?

What’s next?
When an announcement of this high decibel (of being bought out) is made, employees stop all their important jobs at hand to discuss their fate and organizational role. Although the company has promised that no employees would be affected, they begin to disbelieve the company they work for and start to ask each other questions (to which nobody has no answers) such as, will my job become redundant? would the company that has bought us - keep us?, do I need to start a job-hunt?, would we be working from the new office premises?, do I need to re-apply for my current position to the company that has bought us?, would there be a salary change?, to name a few.

Who’s going to answer all these questions…..which have no answers? It is blasphemous!!!!

This reminds me of that very famous quote by the veteran Mr. Narayana Murthy, when he said, "Love your job but never fall in love with your company, because you never know when it stops loving you"……simply so apt in today’s world.

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Before I sign out, as I always say take very good care of yourself and God Bless!

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