Managing Strategic Change: A Case Study of Projacs International and Projacs Kuwait

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Managing Strategic Change: A Case Study of Projacs International and
Projacs Kuwait
Executive Summary
Mergers are just one of the many causes of strategic changes that organisations go through.
To be able to effectively manage this type of change, it is only wise that the management
considers all the areas in the organisation that are going to be affected. Projacs International
is what resulted after the merger between Projacs and Projacs International. The merger gave
the companies a chance to pool their resources together to better manage their expenses and
their clients. The new company could now attract fewer taxes, and their corporate bond
helped them to deliver project management undertakings even better. As would be expected,
mergers just like other forms of strategic changes within the organisation are likely to highly
impact on the employees due to the need to adjust to the new culture. Employees from
Projacs Kuwait were especially affected since they had to move offices. Some were laid off,
and it was especially hard for some previous heads of department to be put under new
departments when they were used to being the heads. Projacs International had to deal with
the differences in culture, which, if left unattended, would have a negative impact on the
company.
Integration of the employees served a central role in reconciling the two companies. This
could be a lesson to many companies planning to enter into a merger in the future. There are
measures that companies should put into consideration to ensure a successful transition as
this paper will reveal. 
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Introduction
The effective management of mergers and acquisitions is an undertaking that could
prove challenging to most managers as the companies undergo strategic change. Reports
show that merger failure rates range between 35 per cent and 60 per cent (Pautler, 2003,
p.13). This is the result of the demanding nature of mergers and the inability of managers and
employees to adjust to the change. Mergers require the re-alignment of procedures, distortion
of the hierarchical structures within the company, and at certain times the movement to
another office—all of which are bound to cause a considerable effect on the employees and
the organisation as a whole. Managing this strategic change requires that managers address
all aspects of the organisation that have been affected. The Projacs International and Projacs
Kuwait merger is a good illustration of the effect of mergers to the organisation, their
benefits, and the possibility of going through the transition period effectively. The effect on
the employees due to changes in the organisation and the differences in corporate culture
came as a barrier to change during this merger, and the company had to do everything
possible to make the merger a success. This paper addresses the merger to give a practical
view on management of strategic change.
Findings
Projacs International
Projacs International has been in existence since 1984 and has become one of the
leading project management companies in the Middle East as well as in other parts of the
world. Projacs International consists of well-trained staffs that have been the cornerstone of
its success. The company that has achieved a growth rate of 36 per cent per year since 1998
has completed over 250 major projects. Projacs International operates in Bahrain
(headquarters), Saudi Arabia, Kuwait, Qatar, Bulgaria, Jordan, Syria, and Morocco among
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others, having a total of 23 branches. Projacs International specialises in project management
for professional bodies and companies, and undertakes, among others, construction
management, value engineering, design management, training, and technology transfer.
Projacs Kuwait
Projacs' main area of operation was project management just like Projacs
International. The only difference now is that the company operates at a lower scale, mostly
serving clients from Kuwait and the neighbouring countries. As a company, Projacs had
established an organisational structure consisting of heads of departments—all of which had
subordinates reporting to them. As a small firm, the company faced stiff competition from the
giant Projacs International such that the move to form a merger was a welcome idea after
lengthy discussions with the board members.
The Merger (Key Drivers)
When Projacs International planned a merger with Projacs Kuwait, this was a move
that the two companies had agreed would be a profitable undertaking by combining both their
resources and human capital for sustainable development (Connor, 2003, p.219). The move
came as a result of the realisation that the two companies were operating in the same field,
yet they could do even better if they operated under the same umbrella. For this reason, a
merger appeared to be a wise step into making the two companies more successful and in
pooling of resources. Again, while the companies could pay le