Merger Dilemma

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Merger Dilemma Paper
Mergers can be defined as business combination transactions involving the combination of two or more companies into a single entity. (http://www.sec.gov/answers/mergers.htm) There are three main types of mergers-horizontal, vertical and conglomerate. Horizontal merger is when a company acquires another in the same industry. Office Depot and Office Max merger is an example of this. It “takes out” another competitor. A vertical merger is when companies that are not in the same industry. In 1995, Time Warner Corporation and Turner Company merged to be one of the most powerful media companies. Time Warner is a cable company and Turner produced television channels. A conglomerate merger is when two companies that have nothing in common merge. Pepsi bought Pizza Hut in the late 1970s creating a huge food and drink company. Mergers can become necessary to keep a company alive but efficiency becomes a problem in a newly formed company and these things must be solved in order to have a successful company. Some mergers are not successful. The reason being is the approach and attitude between the management of the firms. As this becomes an organizational change for employees, they naturally resist it. When mergers are formed, the leadership is affected. Another reason why some mergers fail is cultural mismatch, this is due because it affects the performance, initiates departure of key executives and gives rise to time consuming conflicts in the business. As a consulting group, it is our job to discover solutions to the problems these two companies face. Communication could solve the problem. There needs to be an assessment of the two cultures to determine similarities and differences. Once complete, it will be easier...

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... and employees in order for them overcome and work together. Counseling can also be used as another way of mitigating conflicts. This method will allow management to understand employee concerns and assist them in overcoming them. Organization practice can also be an effective method to help mitigate employee stress. Leaders must act as role models for the employees to be a source of inspiration during these change times.
Company mergers can be a stressful situation for everyone, employees, managers, CEO’s and stakeholders. But with strong leaders and leadership, a merger can happen smoothly. Leaders and mangers provide various techniques and measures to alleviate potential stressors that may arise during a merger. This will demonstrate to the employees and stakeholders that leadership within each individual company and the new company that change is positive

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