City Toronto
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Compare the process used by the city of Toronto with the prescriptions for an effective merger as outlined in this chapter.
The Toronto we know today did not always exist. On January 1st, 1998, the new mega city was created. The decision of the provincial government to amalgamate seven municipalities was highly controversial and opposed by a large majority of residents. The Province of Ontario had several official reasons for amalgamating the seven municipalities to create a single city of 2.4 million people; to reduce the number of elected officials, to eliminate duplication, to reduce costs, to streamline and improve efficiency and to improve accountability. The city continues to deal with integration of its organization, services, operations, systems and policies.
The goal of the Toronto amalgamation was much like the goal of mergers within the corporate world. At their root corporate mergers are concerned with cost-savings. The same can be said for the Toronto merger of seven municipalities. Focused mainly on integrating “the policies, practices, and systems of municipalities as large as Toronto and as small as East York” the Toronto amalgamation attempted to realize cost savings by creating synergies between the different cities.
The initial stages of the seven city merger were consistent with the contingency plan as outlined in the text. By hiring Ms. Glover into the role of Executive Director, HR and Amalgamation and thus creating an HR transition team, the city of Toronto prepared appropriately in the initial stages of the amalgamation. As suggested in the contingency planning stage one of the first steps in a merger is to establish a “contact person and a merger coordinator” it is then suggested that the appointed employees should focus on developing a plan which would include “chain of command, methods of communication, procedures to follow during a takeover, and negotiation skills training and media response training ” Ms. Glovers focus on having the right people in the right places mirrors what is suggested here. In Toronto the plans for amalgamation started years before the actual change took place. A broad-based discussion with the community and City stakeholders resulted in the creation of the Toronto Transition Team, which comprised of six members led by the former Chairman of the Municipality of Metropolitan Toronto. The Transition Team was responsible for laying the ground work for the new City Council that would take over the reigns of government on January 2, 1998. The duties of the Transition Team were outlined in the City of Toronto Act 1997.
The due diligence process appears to have been conducted after the decision to amalgamate was made. It is probably safe to say that an intricate review took place before January 1, 1998, however this is not referred to in the text. That being said the transition team correctly focused their attention first on the employees. They worked through the new requirements of the mega Toronto, developed specific timelines and processes for posting, selecting and filing the jobs, and most importantly met their deadlines. The approach taken with the unions was focused on future collaboration and trust. The seven cities “were given time to work through their members to determine who would be the bargaining agent.” The city was motivated by doing what was best for their labour relationships in the long run and not simply on what was fastest. A detailed review of the seven compensation plans was conducted in order to align the serious disparities of these plans. The focus on choosing a middle of the road benefits plan was probably the safest bet given the goal of achieving cost savings without seriously jeopardizing the employee perception of the merger. Unsurprisingly the most difficult part of this merger was the fusion of the seven vastly different cultures. Often the fusion of cultures takes years, however it is important that steps are taken and a process of amalgamation is determined and followed as was done with the Toronto merger.
Because of the wide range in cultures, processes, unions, etc. it was necessary for the city of Toronto to create a transition team to work through the entire merger process. Mergers are urgent matters, a large range of changes take place over a condense time period. Without a well appointed transition team the merger risks “information gaps and creating employee stress.” By focusing on areas such as staffing, labour relations, compensation, benefits and payroll and culture the Toronto transition team accomplished their goal of “retaining talent, maintaining the productivity of employee performance, selecting individuals for the new organization, integrating HR programs and taking the first steps towards the integration of cultures.” Although extremely difficult and not without its problems (admittance that a compensation consultant should have been hired) overall it appears that the transition team concentrated on the correct areas of change, prepared appropriate, communicated effectively for the most part and were able to amalgamate the seven municipalities into one mega city, Toronto.
Question Two
What do you see as the differences?
The difference between the theory and the actual amalgamation is most apparent in the details and decisions Ms. Glover and the Transition Team made. The fact is “an amalgamation of this scale and level was unmatched in Canadian municipal history. At that time there were no ready-made solutions to be put into practice in order to help in the smooth changeover.” Theory is a great starting point but often in reality it is difficult to apply. For instance, a major difference is that Ms. Glover did not organize a proper job analysis immediately to identify duplicate positions and new work processes. This may have been due to time or resource constraint or was simply not deemed necessary at the time. But, if Ms. Glover would have completed this major step, they would like not have experienced significant integration problems, such as, “the case of two people who were doing the same job for which 1 employee was earning $20,000 more than the other.”
Additionally, the way the merger was announce to all staff involved. The transition team for the Toronto merger had a web site, brochures and hotlines to inform employees about emerging policies, however, the CEO should have made a formal announcement containing the following items of information; rationale of the merger, information about the structure and key management positions, plans for employee reductions, plans for recognizing and working with the union, and detailed information about changes and benefits, or the date of decisions about such changes. They also