Fusion Tastic-Chameleon Costumery Acquisition: 4 Factors to Consider - Essay Sample

The move by Fusion Tastic to acquire Chameleon Costumery is a change process that will impact the human resource as well as the stakeholders. However, this is not the only concern that the management should observe since acquisitions come with multidimensional corporate shifts. The three additional facts that the management will have to deal with include the following.

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Incorporating Chameleon Costumery into the structure of the company through acquisition implies a change in the product specialization. Fusion Tastic’s identity of high-end quality clothing of the 70s, 80s, and 90s will be combined with the Halloween touch inherited from Chameleon Costumery.

Market targeting and segmentation will equally change. Apart from targeting millennials, Fusion Tastic will now be required to also target the Halloween niche, which is seasonal.

The management of Fusion Tastic will have to face the operational and structural changes that come with the acquisition, which is the third additional factor characterizing this transformation. Chameleon Costumery has 20 stores located on West Coast while Fusion Tastic operates stores located in college towns, chic boutiques, and an online platform.

Therefore, the future success of the firm will depend on the extent to which the three additional issues will be addressed in addition to the human resource consideration originating from the implication of psychological contract.

Josh Raymond and Griselda Lopez have worked for Fusion Tastic for the past 20 years. The psychological contract among employees such as Josh Raymond and Griselda Lopez start when they join the first. Josh Raymond and Griselda Lopez have created a psychological attachment to Fusion Tastic based on the brand image and company identity. Josh has played a key role by offering analytical and technical expertise while Griselda’s creativity and vision have been the driving force in the company. The psychological contract between the two employees and Fusion Tastic has been maintained by the Positive Affect that preserves the cycle between maintenance and renegotiation phases (Lambert, 2011). However, this acquisition disrupts the existing psychological contract by changing the Fusion Tastic’s brand image and identity as well as Griselda’s vision for the company. Additionally, a similar experience has already been identified among stakeholders.

The knowledge the looming acquisition has led to different reactions by Josh Raymond and Griselda Lopez. While stakeholders are concerned with the incorporation of the inexpensive and low-end line of products, Josh Raymond and Griselda Lopez's reaction is specific since Griselda is considering to quit while Josh is unhappy with the move. Since the two employees have been chosen to lead the change, there is an anticipated risk that they could fail to offer their leadership expertise in this acquisition process. The disruption of the psychological contract could create a Negative Affect leading to the possibility of a failed repair phase that culminates in an exit of the affected worker (Rousseau et al., 2016).

According to the anticipated implication of the acquisition of Fusion Tastic, both the workers and the stakeholders are going through the post-disruption phases of the psychological contract. Disruptions impact psychological contracts in different ways (Conway et al., 2012). On one hand, Josh Raymond and Griselda Lopez are facing the consequences of disruption that comes after a maintenance phase. Since the workers have already exhibited the Negative Affect that comes with disruptions, they will advance to a repair phase, whose success will lead back to the onset of a maintenance phase and failure will lead to an exit. On the other hand, the and stakeholders are contemplating the dynamics of the disruption and are yet to come to terms with the changes. In this case, the stakeholders could exhibit either a Positive or Negative Affect, which implies that they could go through a renegotiation phase of a repair phase.

Figure 1: Phases of Psychological Contract (Rousseau et al. 2016)

The two primary intervention and strategies that could be used to help Josh Raymond, Griselda Lopez, and stakeholders work their way through the different phases are renegotiation and repair. The use of renegotiation is meant to redefine the promise as a construct of the psychological contract (Rousseau et al., 2016). The board of management should reconsider changing and redefining its obligations to Josh Raymond, Griselda Lopez, and stakeholders. The use of repair intervention is meant to reestablish the expectations and vision of the company to ensure that a new path of psychological contract is set. In this case, Josh Raymond, Griselda Lopez, and stakeholders should be encouraged and convinced to appreciate the new face of Fusion Tactic.

Evidence from corporate research ascertains that change leaders could use or have used several strategies to help people to experience critical phases of the psychological contract. The recommended strategies include the following.

Change leaders have encouraged employees and stakeholders to base their psychological contracts on general expectations as opposed to promises when working through different phases (Rousseau et al., 2016).

Since psychological contracts could be abandoned, breached, or violated, change leaders have assisted employees to build new expectations that come with changes through repair and renegotiation (Rousseau et al., 2016).

Change leaders could also assist employees and stakeholders to appreciate the role of context in psychological contracts, which emphasizes the dynamic nature of the employee-employer relationship that could be associated with different variables at each period (Lambert, 2011).

References

Conway, N., & CoyleShapiro, J. A.M. (2012). The reciprocal relationship between psychological contract fulfillment and employee performance and the moderating role of perceived organizational support and tenure. Journal of Occupational and Organizational Psychology, 85, 277–299. https://doi.org/10.1111/j.2044-8325.2011.02033.x

Lambert, L. S. (2011). Promised and delivered inducements and contributions: An integrated view of psychological contract appraisal. Journal of Applied Psychology, 96, 695–712. https://doi.org/10.1037/a0021692

Rousseau, D. M., Hansen, S. D., & Tomprou, M. (2016). A dynamic phase model of psychological contract processes. Journal of Organizational Behavior, 1 – 18. https://doi.org/10.1002/job.2284