Mergers and Acquisitions Organizational Culture Term Paper

Excerpt from Term Paper :

Similarly, the simple fact is that with a merger nothing remains static forever -- growth cannot occur unless flexibility occurs.

Some flexibility is required here, and there may be times when transfers will need to be solidified.

Technology

In most cases, systems and technology will improve based on greater efficiencies. However, it is also likely that basic input and programs will require change and flexibility as well -- what two companies use exactly the same system in exactly the same manner?

This issue may interfere with the efficiency of individual department for the short-term. However, the phase period of merging should allow for adequate time to learn about their new positions, technical needs, etc.

Quality

Both organizations are committed to the highest quality possible; it is in their respective strategic plans. It is important to focus on ways to improve quality, not interagency competitiveness.

The bottom line needs to be quality of goods and/or services -- culture aside.

Innovation/Systems

There may be new forms, new business systems, and certainly new policies and procedures. Again, this is part of any transition and is the result of employees pulling together for the common good.

Larger organizations take more time to implement decisions and new processes; Evergreen employees will need to realize that and become more amiable to the situation; and to remain positive about it.

(Stotler, 2010; Carr, 2006))

In summary, there are really ten categories in which M&a can be effectively used as a growth strategy, provided due diligence occurs not just on the financial side, but on the qualitative, human side as well:

To acquire customers -- almost always a factor in mergers, and one of the simplest way to glean a new batch of clients/customers. Market presence, brand awareness, and market momentum are all integrated with the swipe of a pen -- now the challenge is to keep those new customers happy.

To capitalize on company strength -- use M&a to increase benefits of market expertise, management depth and skill, and the psychological factor that allows one to redevelop distribution channels and brand recognition to create a more robust organization.

To cover an organizational weakness -- honest leaders understand that there are some issues in which can only be "fixed" by merging with a company that isn't broken in the same way. This tends to use education to improve a weakness, lack of expertise, or particularly low performing department or group.

To buy a low cost supplier -- as an integration strategy, this is typically aimed at improving profit margins rather than growing revenues; and depending on the niche, sometimes a way to prepare for a sale of one's own company.

To acquire technology -- since it is so egregiously expensive to redevelop technology, often it is less expensive to purchase that which already exists, tweak it a bit, and then utilize its positive in your own manner. Building from the ground up might seem more efficient, but still requires R&D, testing, and a longer process of implementing. Why reinvent if not necessary.

To use M&a as a way to provide scale and access to capital and capitalized markets -- this is usually done as a strategy for large companies who want to be larger and have very deep pockets; some companies use this in order to get large enough to attract more capital from an IPO or equity group. Usually more about stakeholders and money.

To protect a customer base from excessive competition -- studies often show that the more product or service a customer uses, the less likely they are to defect to another competitor. To merge then, with a company that allows for more services or products only increases the chance to keep customers longer.

To Protect and expand mature product lines -- at times new technology can boost an existing mature line in a way that allows it a greater life cycle.

Improving a line -- in the same way, a merger or acquisition may dramatically improve a product line without having to do lengthy (and costly) re-innovation. Sometimes this strategy gives the sales force more to sell, excites the team, and allows for even greater penetration.

Finally, M&a can remove barriers to entry -- relationships may already be solidified with governmental agencies or companies that will allow an established presence and then a merger of capabilities to move forward in a new, more powerful direction (Kauppi, 2006; Bruner, 2004).

Whatever the case, using Mergers and Acquisitions as a strong tool for organizational growth is powerful, far easier than reinventing the wheel, and will likely continue to be a viable business strategy for numerous organizations of many sizes.

REFERENCES

Angrisani, D., & Goldman, R. (1997). Predicting Successful Mergers and Acquisitions. Binghamton, NY: Haworth Press.

Bruner, R.F. (2004). Applied Mergers and Acquisitions. New York: John Wiley.

Carr, P. (2006). Implementing Culture Change. Alexandria, VA: Oakmount Press.

Farb, D. (2004). Reorganizing for Customer and Patient Care. Los Angeles: University Press.

Friedman, L. (2002). Go to Market Strategy: Advanced Techniques and Tools for Selling. New York: Butterworth.

Hennepopf, D. (2009, March). Merger's and Acquisitions Explained. Retrieved February 2011, from MandAexplained.com: http://www.m-and-a-explained.com/

Horibe, F. (2001). Creating the Innovation Culture. New York: John Wiley & Sons.

Kauppi, D. (2006, April). Merger and Acquisition - a Strategy for Corporate Growth. Retrieved January 2011, from Ezine: http://ezinearticles.com/?Merger-and-Acquisition-a-Strategy-for-Corporate-Growth&id=175510

McCarthy, J., & Perrault, W. (2008). Basic Marketing, 10th ed. Homewood, IL: Irwin.

Sherman, a. (2010). Mergers and Acquisitions from a to Z. New York: AMACOM.

Stotler, R. (2010). Culture Change: The Magnet Model. Saarbrucken, Germany: LAP Lambert Academic Publishing.

Vachon, D. (2007). Mergers and Acquisitions. Chicago: Riverhead Press.

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