Category: Mergers business organizations system pdf

It's hard to keep track of all the big companies that have recently decided to join forces or changed their names. Here's a guide. Your neighborhood Whole Foods is still called Whole Foods. But Amazon has already changed the store by lowering prices and selling tech gadgets there, among other things. The companies announced the decision in January.

Hershey HSY acquired jerky maker Krave in Related: As Whole Foods merges with Amazon, local suppliers watch and worry. If the deal goes through, it would drastically remap the health care industry. The companies announced the plan in December.

The deal was finalized last year. Comcast has also put in a bid for part of Fox's assets. The privately held grocery store company, which owns Safeway and Vons, among other brands, has agreed to buy Rite Aid. In the fall, Coach changed its name to Tapestrythough the store name and all the accessories it makes will still be labeled Coach. Bonobos clothing will only be available on Jet. But if the acquisition goes through, it would be the second-biggest deal in American corporate history.

CVS-Aetna merger could transform health care industry. Personal Finance. CNNMoney Sponsors. SmartAsset Paid Partner. These are your 3 financial advisors near you This site finds and compares 3 financial advisors in your area Check this off your list before retirement: talk to an advisor Answer these questions to find the right financial advisor for you Find CFPs in your area in 5 minutes.

Amazon and Whole Foods. CVS and Aetna. A scorecard of the biggest deals

NextAdvisor Paid Partner.JavaScript is disabled for your browser. Some features of this site may not work without it. Toggle navigation. Massachusetts Institute of Technology. Download Full printable version 4. Advisor George Westerman. Terms of use M.

They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission. Metadata Show full item record. Mergers and acquisitions may disrupt the operations of the organizations involved.

Major issues include the need to integrate personnel, business processes, information systems, and diverse information technologies across the merging organizations. Executives who underestimate or disregard the costs and time associated with merging computer applications, infrastructure or IT organizations will face unpleasant surprises.

Description Thesis S. Date issued Department System Design and Management Program. Publisher Massachusetts Institute of Technology. Keywords System Design and Management Program. Search DSpace. This Collection.The study is a modest attempt to integrate all possible financial and non-financial performance parameters systematically as a mergers and acquisition performance system. In present framework, dual perspective of the mergers and acquisitions performance is attempted, in form of enterprise as well as the customers factors.

The Disadvantages of Merging Companies

The system represents situation-actors-process and performance S-A-P-P framework, where S-A-P signifies critical success factors or lead factors for last P that symbolizes lag performance or key results areas profitability, liquidity, solvency and growth-rate.

The proposed system is likely to be an important contribution to the performance literature. It is useful in providing a more precise insight of mergers and acquisitions performance. Insight of actual or lead performance along with the causes responsible or lead performance parameters could facilitate further decision-making.

Knowledge of weak as well as strong parameters of performance could be helpful in the formulation and execution of the requisite strategy for the continuous monitoring and betterment of the performance. The application of the system for the continuous monitoring of performance through formulating requisite strategy is proposed using flexible strategy game-card.

This is a preview of subscription content, log in to check access. Rent this article via DeepDyve. Amiot, C. A longitudinal investigation of coping processes during a merger: Implications for job satisfaction and organizational identification.

Journal of Management, 32 4— Ananad, M. Balance scorecard in Indian companies. Vikalpa, 30 211— Anderson, E.

mergers business organizations system pdf

The antecedents and consequences of customer satisfaction. Marketing Science, 12— Atkinson, A. A stakeholder approach to strategic performance measurement. Sloan Management Review, 38 325— Baldwin, C. Capabilities and capital investment: New perspectives on capital budgeting. Journal of Applied Corporate Finance, 5 267— Barney, J. Firm resources and sustained competitive advantage. Journal of Management, 17 199— Basu, S. Has the importance of intangibles really grown? And if so, why?

Accounting and Business Research, 38 3— Bowen, D. The empowerment of service workers: What, why, how and when. Sloan Management Review, 33 331— Brancato C. New corporate performance measures. New York : Conference Board. Brealey, R. Excess comovement in international equity markets: Evidence from cross-border mergers.Merging two companies can provide the firms with synergies and economies of scale that can lead to greater efficiency and profitability, but it is important to note that mergers can have a downside too.

It may be harder for the combined organization to cooperate and communicate, and there's a risk that companies with a too-large market share will eliminate the competition and raise prices for consumers. When two firms merge, it is more than a coming together of two names or brands — it is a real merger of people who bring along a specific corporate culture.

If two firms have very different corporate cultures, conflicts can arise. For example, if an innovative, entrepreneurial company with a flat hierarchy were to merge with a highly hierarchical, conservative and traditional organization, the employees in the new organization would be likely to have difficulties working together. When businesses merge, it is often to achieve economies of scale.

Larger organizations are typically able to produce goods and services more efficiently and at a lower per-unit cost than smaller businesses because fixed costs are spread out over a larger number of units.

This is not always the case, however.

mergers business organizations system pdf

Sometimes when two firms merge, being larger will actually create dis-economies of scale, where per unit production costs increase because of increased coordination costs. When two companies merge, they need to consider how consumers view the two firms and whether or not they view them in a compatible way.

mergers business organizations system pdf

For example, if an environmentally friendly soap company were to merge with an industrial detergent manufacturer with a poor environmental track record, it may alienate the customers of the environmentally friendly soap company who don't want to support a company that is not environmentally responsible.

Merging two businesses is often a good method for reducing the labor force of the two organizations. For instance, a company may combine its two offices into one and reduce the number of staff performing the same duties. While this can provide cost savings for the company, it can also have a negative effect on employees. Employees may become fearful of losing their job and may lose their trust in the organization.

This can decrease employee motivation and reduce productivity.

mergers business organizations system pdf

Price competition reflects competition in most cases. Monopolies are one big potential issue with company mergers. Even without monopoly creation within an industry, less competition often leads to increased pricing to consumers. While some increases reflect the increased costs involved in dis-economies, the ultimate result yields dissatisfaction to the buyers of goods and services.

Business mergers often have to balance increased pricing with potential layoffs to prevent high consumer costs. Wendel Clark began writing inwith work published in academic journals such as "Babel" and "The Podium. Share It. About the Author.There are five commonly-referred to types of business combinations known as mergers: conglomerate merger, horizontal merger, market extension merger, vertical merger and product extension merger. The term chosen to describe the merger depends on the economic function, purpose of the business transaction and relationship between the merging companies.

A merger between firms that are involved in totally unrelated business activities. There are two types of conglomerate mergers: pure and mixed. Pure conglomerate mergers involve firms with nothing in common, while mixed conglomerate mergers involve firms that are looking for product extensions or market extensions.

A leading manufacturer of athletic shoes, merges with a soft drink firm. The resulting company is faced with the same competition in each of its two markets after the merger as the individual firms were before the merger. One example of a conglomerate merger was the merger between the Walt Disney Company and the American Broadcasting Company. Benefits of a Merger or Acquisition.

A merger occurring between companies in the same industry.

Success Factors for Integrating IT Systems After a Merger

Horizontal merger is a business consolidation that occurs between firms who operate in the same space, often as competitors offering the same good or service. Horizontal mergers are common in industries with fewer firms, as competition tends to be higher and the synergies and potential gains in market share are much greater for merging firms in such an industry.

A merger between Coca-Cola and the Pepsi beverage division, for example, would be horizontal in nature. The goal of a horizontal merger is to create a new, larger organization with more market share. Because the merging companies' business operations may be very similar, there may be opportunities to join certain operations, such as manufacturing, and reduce costs. A market extension merger takes place between two companies that deal in the same products but in separate markets.

The main purpose of the market extension merger is to make sure that the merging companies can get access to a bigger market and that ensures a bigger client base. Eagle Bancshares is headquartered at Atlanta, Georgia and has workers.

Eagle Bancshares also holds the Tucker Federal Bank, which is one of the ten biggest banks in the metropolitan Atlanta region as far as deposit market share is concerned. One of the major benefits of this acquisition is that this acquisition enables the RBC to go ahead with its growth operations in the North American market.

With the help of this acquisition RBC has got a chance to deal in the financial market of Atlantawhich is among the leading upcoming financial markets in the USA. This move would allow RBC to diversify its base of operations. A product extension merger takes place between two business organizations that deal in products that are related to each other and operate in the same market.

The product extension merger allows the merging companies to group together their products and get access to a bigger set of consumers. This ensures that they earn higher profits. The acquisition of Mobilink Telecom Inc. Broadcom deals in the manufacturing Bluetooth personal area network hardware systems and chips for IEEE Mobilink Telecom Inc.

It is also in the process of being certified to produce wireless networking chips that have high speed and General Packet Radio Service technology. It is expected that the products of Mobilink Telecom Inc. A merger between two companies producing different goods or services for one specific finished product. A vertical merger occurs when two or more firms, operating at different levels within an industry's supply chain, merge operations.

Most often the logic behind the merger is to increase synergies created by merging firms that would be more efficient operating as one. A vertical merger joins two companies that may not compete with each other, but exist in the same supply chain. An automobile company joining with a parts supplier would be an example of a vertical merger.If an integration project of the sort discussed in the rest of the CIO issue is the IT equivalent of surfing?

Too often, companies engaging in mergers or acquisitions ignore the IT scalability of their new business partner or their own systems. A slow or poorly handled IT integration between merging companies can jeopardize the business goals.

Stephen N. Once that kind of planning is complete, the actual hands-on work should be just like any other IT project? Even before a merger or acquisition candidate is chosen, the CIO needs to have explicit knowledge of his own architecture and what the most important systems are, says David. Good, scalable architecture makes integrating two companies possible. Neither company had a scalable IT architecture? Insays Thomas L. In earlyWaste Management, a CIO honoree, put in place a new architecture and for the first time developed an acquisition strategy that matched its capabilities.

The company began an acquisition spree that averaged one small company per business day and stuck religiously to the absorption strategy.

Conversely, the CIO of the acquiring company can also be looking for positive reinforcement: systems or processes from the other company that remind everyone why the merger or acquisition seemed like a good idea in the first place. An examination of the cultural differences between the two companies planning to blend must be part of the diligence phase. Owen Flynn, senior vice president, corporate vice president and CTO of Atlanta-based credit reporter Equifax, another CIO honoree, warns that when it comes to systems integration, cultural differences can be a ticking bomb.

One example is when a process-oriented company tries to merge with a creative and fluid company. If there is no documentation, you will have a hard time leveraging the best practices. The classic absorption model? During his due diligence studies, Lippert has turned up many technologies that RBC has adopted, including a wireless application from a company in Houston that allows appraisers to file status reports for construction projects from onsite. Internet banking is another example. Once the diligence phase is complete and the two sides agree to go ahead with the merger, the planning begins.

The goal of the planning phase is to break the seemingly daunting task of integrating two companies into a series of smaller IT projects. It is crucial that one of the two partners emerge as the driving force behind the integration. London-based oil giant BP, a CIO honoree, learned firsthand that the planning will go nowhere until a dominant side emerges. At the time it was the largest industrial merger ever and the inspiration for similar undertakings by competitors Exxon Mobil and ChevronTexaco.

Although British Petroleum was slightly larger than its American counterpart, both companies agreed that they were partners and that neither company entered the merger with the upper hand. Looking back, Phiroz P. British Petroleum outsourced everything from application development to telecom and the help desk, and had an Oracle ERP system. Today the SAP platform is the only remaining Amoco system. Once the plan is complete, the integration work can begin in earnest. Just as there needs to be a dominant side in the planning phase, the integration work itself has to have a single person who is ultimately accountable.

Morgan and Chase Manhattan merger, the responsibility fell on Richard J. Morgan Chase, who was a veteran of previous Chase mergers. Thompson says that having one person in charge makes it clear to everyone who should be giving the commands and who has the ultimate authority. CRM was an easy decision. Chase was pretty far along on a Siebel implementation while J.

Morgan was just looking into it.Mergers come into play in the world of business for two very different reasons. The first is when you've decided it makes sense to join forces with another company to reap the rewards that come from your combined strengths. A smart business merger can help you enter a new market, reach more customers, freeze out a competitor or fill a gap in your company's abilities.

Mergers can get you on the fast track to become more competitive. With a complementary partner, your business can acquire products, distribution channels, technical knowledge, infrastructure or cash to propel you to a new level of success. The flexibility and power boost they provide can be a key strategic tool for today's entrepreneurs. And the best part is that they can go wherever your ideas take them.

For those business owners who dream of building an even more successful company, merging with another company can present terrific opportunities. The key is doing your homework, knowing what the other business is worth, finding the right company to acquire company, and working with competent professionals lawyer, accountant, business broker. Ask tough questions and get to know the other company on all levels. The second reason you'd plan for a merger is when you've decided you want to sell your company and another, existing business decides it would be in its best interest to acquire your firm.

As a rule, businesses have deeper pockets and borrowing power than individuals, and they may be willing to pay more than individuals. Businesses also tend to be more savvy buyers than individuals, increasing the chances your business will survive, albeit perhaps as a division or subsidiary of another company. However, businesses can't move as fast as individuals.

It may take you a year or more to get your company ready to be merged or acquired. You'll need to:. The best candidate for a merger is a company that sees yours as a strategic fit with their own firm. If you have something they want and can't find elsewhere, such as a unique product or distribution channel, they may be willing to pay a premium price. A competitor who only wants to put you out of business is usually a poor merger prospect, however.

Top 10 Business Mergers and Acquisitions of All Time

This buyer is motivated only by price and probably isn't interested in preserving the business. Entrepreneur Media, Inc. In order to understand how people use our site generally, and to create more valuable experiences for you, we may collect data about your use of this site both directly and through our partners.

By continuing to use this site, you are agreeing to the use of that data. For more information on our data policies, please visit our Privacy Policy. Podcasts Books Entrepreneur Insurance. Back to Encyclopedia Mergers Definition: The combination of one or more corporations, LLCs, or other business entities into a single business entity; the joining of two or more companies to achieve greater efficiencies of scale and productivity.

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