Mergers and Acquisitions and Common Unwritten Rules Essay Example

and management is primarily interested in profitability despite claiming that the customer is king.

Despite the introduction and orientation programs, the origins of these unspoken regulations are often unidentified, but new recruits promptly embrace them. The way workers interact with management, customers, and each other subtly mirrors the organization's culture. Understanding the culture is also influenced by inconsistencies between words, decisions, promises, and actual actions. New employees acquire knowledge of which ideas and opinions are valued and when it's preferable to remain quiet. They also discover which tasks and aspects of their job will be evaluated and which goals and instructions can be ignored. Work culture is equally effective in enforcing unspoken rules as physical punishment - this remains true even during mergers and acquisitions.

Mergers and acquisitions (MAA) refer to the process through which companies achieve synergy and accelerate growth. This is done by acquiring resources or market share at a faster rate than internal development allows. While the terms "merger" and "acquisition" are often used interchangeably, they have distinct meanings. A true merger involves merging the operations and assets of two equal partners who agree to merge on fair terms. They give up their respective shares, issue new ones, and establish a new company. Examples like ExxonMobil or (AOL) Time Warner illustrate this concept. On the other hand, an acquisition or takeover takes place when one company aims to gain control over another by obtaining a majority of its shares or assets.

Two types of takeovers, a friendly takeover and a hostile takeover, are distinguished by the price per share offered. A friendly takeover occurs when a bid is

accepted by the target company, while a hostile takeover happens when the bid is rejected. Many companies choose mergers and acquisitions (M;A) to foster growth and achieve synergy. Synergy arises when the value of the newly formed entity exceeds that of its individual components combined. This can be achieved in several ways while keeping costs in check. Firstly, duplicate functions can be eliminated, often resulting in staff reductions. Secondly, merging or taking over another company allows for asset consolidation and generates economies of scale. By becoming larger, better terms and conditions can be negotiated with suppliers. Lastly, combining expertise enables companies to create innovative products or services like Disney's collaboration with Pixar to produce groundbreaking computer-animated films such as Toy Story.

Initially, Disney and Pixar had a cooperative relationship. However, in 2006, Disney acquired Pixar from its owner Steve Jobs. Although partnerships may appear ideal in theory, mergers and acquisitions (M&A) typically entail substantial organizational and structural changes and may not consistently meet investor expectations. There are numerous instances of unsuccessful M&A deals such as the DaimlerChrysler merger. Nevertheless, many company leaders continue to seek favorable opportunities. QUIZ: Is it a balanced merger?