Mergers and acquisitions are really common in now days, many companies want to make a strategic union looking for betters incomes and more recognition in the market place. This is a hard and long process where the whole organization is involved because in some of those mergers and acquisitions people can be fired. When talking about Mergers and Acquisitions Scholars such as Salama and Vinten, say that this process empowers firms and leads them to transformations. Firms, can have new corporate stuff, and can take advantage of the company the union is taking place with.
When talking about opportunities and challenges in M&A we can see the followings:
Challenges:
Integration process
It is hard in mergers and acquisitions the integration process in different companies, since both have different behaviors and believe, and when the moment to make the union happen it can bring several disputes. For that reason is very important to face those situations. As we saw in the cases most of the companies work out well with the integration process managing cultural differences doing the respective research before de acquisition.
Implementing strategies
When the strategies are not well developed and implemented can cause negative impacts in the organizational effectiveness. Everything has to be made step by step and one without the other doesn’t work, for that reason without a well implemented plan, integration process will not be successful. As an explication of this is the case of British Petroleum and Amoco who handle with a integrating systems and build a new corporate culture for the future organization, what works very well for them.
Acculturative process
“The ways in which two groups adapt to each other and resolve emergent conflict” (Nohavandi and Malekzadeh, 1988). In Volvo and Ford case they where several cultural differences, for that reason employees of each company were into a process of learning about each other`s values and beliefs. And without this acculturative process of merging never had been possible.
Opportunities:
The creation of value
Is an important part of the acquisition process “ integration process is the real source of value creations and acquisitions” ( Haspenslagh and Jemison,1991,p.167) In order to create value it is important that the companies involved in the acquisition process collaborate to the get the expected benefits. If both companies work together they are going to have better results and to increase the value in terms of capital, human resources and capabilities and therefore to be more productive.
Transfer of capability and skills
Since different companies are involve in the merger and acquisitions process they need to share capabilities and skills. In this sense if a company is strong in some point this strength is going to be transfer to the other company and they will start a complementation process.
Impact in the outcomes
If a merger and acquisitions process is successful both companies will have good impact in the outcomes as is the case of the integrating process of Deutschk bank and Banker trust, the integration of British petroleum and Amoco and the integration of Volvo and Ford. When all necessary aspects are taken into account in an integration process the outcomes will be positive otherwise will be negative and this opportunity could become a threat
SOURCE:
Alzira Salama, Wayne Holland, Gerald Vinten, (2003) "Challenges and opportunities in mergers and acquisitions: three international case studies – Deutsche Bank-Bankers Trust; British Petroleum-Amoco; Ford-Volvo", Journal of European Industrial Training, Vol. 27 Iss: 6, pp.313 - 321
