Advocacy Group Children's Defense Fund Research Paper

Excerpt from Research Paper :

Mergers and acquisitions also offer the potential for expansion into a new regional market if the old one is super-saturated, if one of the merging or acquired entities is located in a different area of the world.

On paper, it would seem that mergers and acquisitions can often convey value to a company, but two-thirds of most large mergers fail (Mergers and acquisitions: Why they can fail, 2010, Investopedia). One critical question to ask when evaluating if a merger or acquisition is likely to be successful is if the merging organizations have a similar enough corporate culture and standard operating procedures to truly generate such mutual synergy. Worker motivation may decrease if the corporate cultures are inharmonious. When straight-laced Disney acquired the more freewheeling Pixar studios in a friendly takeover, creating a common culture still proved to be a challenge, despite the fact that both entities were animation studios (What is the difference between a merger and a takeover, 2010, Investopedia).

Larger organizations can also become more cumbersome and bureaucratic, rather than more efficient, and actually generate higher operating costs. If one entity dominates the other in terms of the new attitude and operations, and if people are laid off as a result of the merger or takeover, morale may plummet. Additionally, some managers who remember the old organizational structure may favor certain aspects of the business over others, or they may spread themselves so thin the formerly high-quality products or service are compromised. A business may lose its 'true north' in terms of what it did well previously as the result of a merger or acquisition.

References

Growing a business. (2010). Tutor2U. Retrieved October 15, 2010 at http://tutor2u.net/business/gcse/organisation_growing_a_business.htm

Mergers and acquisitions: Why they can fail. (2010). Investopedia. Retrieved October

15, 2010 at http://www.investopedia.com/university/mergers/mergers5.asp

What is the difference between a merger and a takeover? (2010). Investopedia. Retrieved October 15, 2010 at http://www.investopedia.com/ask/answers/05/mergervstakeover.asp

Sources Used in Document:

References

Growing a business. (2010). Tutor2U. Retrieved October 15, 2010 at http://tutor2u.net/business/gcse/organisation_growing_a_business.htm

Mergers and acquisitions: Why they can fail. (2010). Investopedia. Retrieved October

15, 2010 at http://www.investopedia.com/university/mergers/mergers5.asp

What is the difference between a merger and a takeover? (2010). Investopedia. Retrieved October 15, 2010 at http://www.investopedia.com/ask/answers/05/mergervstakeover.asp

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