Diversification, Mergers and A cquisitions

12 Pages 2919 Words

prognosticated value fails to appear in many cases is that people fail to pay enough attention to cultural factor. Acquisitions flounder because of the people side, the soft side. That is the reason for failure in three out of five cases.

Therefore, it is essential corporations take into consideration the general factors in acquiring company such as, the target company’s market position; its products or services; the degree of customer satisfaction with these products/services; the uniqueness of the product/service line; and potential threats to or weaknesses in the product/service line. In short, look at how viable the company is. Since the goal is also to integrate the acquired company into, a lot of time should be devoted to examining how to ensure a smooth integration of cultures. This means paying close attention to people issues. If people are not united around a common vision, and they don’t understand their individual roles, responsibilities, measurement systems and reward systems, the confusion that results can be both demorali...