The Scranton and Stamford branches prepare for the upcoming merger. Pam professes excitement over the merger, including the return of Jim (throughout the episode they interact in a friendly but awkward manner). Andy proclaims he'll be the No. 2 man in Scranton in six weeks time through "name repetition, personality mirroring and never breaking off a handshake."
A rivalry between Dwight and Andy begins over the number two position in the office. At the welcoming party, Michael plays a videotape he has created called "Lazy Scranton", which features him and Dwight rhyming over the music of Saturday Night Live's "Lazy Sunday".
Phyllis helps Karen investigate the source of a terrible smell, and they realize that Karen smelled Phyllis' perfume. Phyllis states that it was a present from Bob Vance, and is offended when his name means nothing to Karen, and says "You have a lot to learn about this town, sweetie". Karen later makes amends (thanks to Jim's assistance) by asking Phyllis if Bob Vance owns Vance Refrigeration.
Michael embarrasses hefty new employee Tony by attempting to push him onto a table with the rest of the new employees; this causes Tony to quit. However, an angered Michael fires him instead, unintentionally entitling him to severance pay. Michael learns that Jim is the number two in the office, which prompts Andy and Dwight to argue over who is number three.
After a plan to unite the employees goes awry, they find that they have a common interest: their contempt of Michael. Jim tells Pam that he is seeing someone. Dwight and Andy trade barbs on the way to the office the next day.