Book the Titans of Takeover

¶ … Robert Slater

This report is based upon the book Titans of Takeover by Robert Slater. This book was originally published in 1987 by Englewood Cliffs, and then re-published and copyrighted in 1999 by Beard Books.

Introduction of the Author

The book Titans of Takeover was authored by Robert Slater, who is famous for his strong stand against President Ronald Reagan's attempts to make the U.S. marketplace a free economy by doing away with the Sherman and Clayton Antitrust Laws. He proved to America that although such a move would appear to yield immediate benefits by putting the nation's economy on the map against the vibrant economies that gave no room to antitrust laws, it would, to an equally large extent, produce devastating outcomes on the economy in the long run. Slater has authored a couple of other bestselling business books and authored several articles on the Wall Street Journal, in addition to being a Newsweek Magazine, UPI, and Time Magazine journalist.

Body of the Review

This is one of the most well-written, and clearly-thought out books I have come across. People would probably think that the book's intent was to make a fast-buck out of the corporate raiders, but I beg to strongly disagree with this thought. The author clearly stipulates that the welfare of the American public is his only interest. His core intention, he posits, is to counter the selective positive arguments that the advocates of mergers used in order to mislead the American public, which was caught between a pool of influential businessmen controlling the entire market and fully driven by the profit motive, and a Reagan administration that had thrown its full weight behind the merger mania, just so to make the American economy more vibrant and recognizable.

The author at one point makes reference to a public speech, neatly summed-up and attractively-packaged by Bruce Wasserstein - an investor banker and merger mania supporter, expressing that mergers do nothing but yield a streak of economic benefits, including scale economies, reduced administration overhead costs, lower chances of corporate failure as a result of freshly-induced leadership, and so on. The speech intentionally evades a mention of the negative effects that were likely to accrue from the same. With this, Wasserstein would amass lots of public support and earn himself, as well as his inner circle, the reputation of a friendly buyer.

The author, representing the naysayers, puts forth a strong argument against the pro-takeover argument that mergers are a vibrant contributor to job creation. He expresses that as a corporation got larger and larger due to acquisitions, the levels of inherent bureaucracy and, consequently, sluggishness increased. Large corporations, he expresses, would naturally have lower incentives to push hard and compete, a trend that would slow down the level of economic growth.

The author employs factual representation to reinforce his pro-merger point-of-view, expressing that the smallest firms in New York at the time, including New York Air, Genentech and Apple Computer had been found to be more innovative and creative than their larger counterparts. He suggests that American companies put their millions in plant and equipment modernization and in research, rather than spend their time thinking of how to devour one another; because unlike merger promotion, such a move would increase economic profits and not imposing any adverse effects on the public.

Job loss arises as another significant concern associated with the merger mania. Once the effects of sluggishness and bureaucracy, which would naturally slow down the profit accrual rate, begin to be realized, the large profit-motivated organization would have no choice but to engage in cost-cutting measures. To this end, the author posits that retrenchments and unsubstantiated firing decisions would be inevitable. He makes reference to a 1985 survey carried out on a number of senior executives of newly-merged companies, in which case more than half of those polled had opted to abandon their well-paying positions for lower ones. Here, the author demonstrates that large organizations are not only difficult to manage, but that their formation affects society's high and mighty, in terms of job security, in the very same way it does the simple, lowly-graded employee.