Merge the acquired company into your company. The result of this strategy will be one company containing the elements of both companies. What are the pros and cons of this implementation strategy? How will you know if the strategy is working?
The risks and downsides of mergers are well-known -- it is often said that mergers make it easy to predict the future, because they almost invariably fail. In fact, two-thirds of all mergers fail, a staggering statistic (McClure 2012). The theory behind mergers is that they generate potent cost synergies, improve profitability, and trim costs of production when the strengths and capacities of the two companies are merged together. The basic idea of a merger is that the best of both companies can be fused. However, mergers often result in the clash of organizational cultures. Inharmonious corporate cultures can lead to confusion and organizational disarray -- ultimately costing the company money, rather than generating savings. Cultural differences, such as a very competitive and cutthroat culture vs. A laid-back culture, or a culture with a great deal of worker autonomy vs. A fairly authoritarian managerial structure, may be overlooked. (McClure 2012).
Whether a merger has 'worked' can be partially determined if the proposed synergies and cost savings are generated, while the companies still retain their core consumer bases. Also, to justify to shareholders the merger and to 'prove' that the merger was justified, companies will often resort to extreme cost-cutting measures that ultimately alienate customers (McClure 2012). There are exceptions, of course, like the Disney-Pixar merger, which has been judged a success, however this merger was completed with Pixar was a fairly young company and easily malleable in the hands of the mighty Disney empire (Amidi 2008).
B. Operate the acquired company as a separate business entity. The result of this strategy will be two separate companies under one senior management umbrella (the senior management team that is responsible for running both companies). What are the pros and cons…
Sample Source(s) Used
References
Allen, Scott. (2012). Joint venturing 101. Retrieved:
http://entrepreneurs.about.com/od/beyondstartup/a/jointventures_3.htm
Amidi, A. (2008). The Disney-Pixar merger two years later. Cartoon Brew. Retrieved:
http://www.cartoonbrew.com/disney/disney-pixar-mergertwo-years-later.html
Related Documents
Study Document
Merging Two Companies Into One
Merger & Acquisition The author of this report has been asked to do an assessment that involves the author's company acquiring a major competitor. The person piloting the acquisition has just asked the author to do a few things. Those things include an overview of the issues that would exist in merging the two organizational structures, the compensation systems for the two companies and so forth. The author is asked to
Study Document
Merging 401 K. Plan
Merging 401(k) Plan The issue of vested and unvested employees is rather complicated. We need to analyze the facts and create several other groups, according to the 'vesting' intervals they find themselves in. We need to address the issue of the vested employees at Claricom who have finished their 4-year period of vesting with Claricom, because, if the Staples schedule is adopted, we will need to consider what will happen with the
Study Document
Mergers in 1998, Citicorp Acquired Traveler's Group
Mergers In 1998, Citicorp acquired Traveler's Group in a merger of financial services giants. The combination created the world's largest financial services company at the time, combining banking, investments and insurance (Martin, 1998). Under terms of the deal, it was a stock swap, with Traveler's paying $70 billion for Citicorp's shares, though the deal was sold as a $140 billion deal (Ibid). The deal paved the way for expectations that future
Study Document
Leading Mergers and Acquisitions of Hospitals Merging
Leading Mergers and Acquisitions of Hospitals Merging and Acquisition When the size of an organization continuously increases in size, management problems arise. Such large organizations operate through bureaucratic structures. The main factors that make bureaucracy work are standardization, co-ordination and specialization. Bureaucratic structure is very efficient in achieving economies of scale and avoiding duplications. The bureaucratic structure works best when there are clear rules of coordination and a clear chain of command
Study Document
Motivation Case Study Kraft Heinz Company
Kraft Heinz Company Motivation Case StudyOrganization's SummaryThe Kraft Heinz Company, popularly known as Kraft Heinz, is a globally trusted producer of high-quality and nutritious foods such as pickles, ketchup, and vinegar. The company was formed in 2015 by a merger between Kraft Foods and Heinz (Kraft Heinz, 2022). As a result, it is co-headquartered in Pittsburgh and Chicago. The merger has made the company the fifth-largest food and beverage company
Study Document
Berkshire Hathaway Company
Berkshire Hathaway is one of the most interesting cases of successful investments. Under the inspirational leadership of Warren Buffett, the company's evolution is a great object of study for both scholars and investors. This paper aims at pointing out the key points in Berkshire's history, Buffett's influence, how the company's structure was built, what is its current financial status and whether an investor should consider buying its stock. In a 1999