Mktg577 – Week 6 Case Study

I. Statement of the Problem The synopsis is based on the nu unfastened fusion reaction and erudition surrounded by E. T Kearney and explosive detection system. E. T Kearney is the largest vigilance consulting group while explosive detection system is a technology unfluctuating. The caller- aways unite to form a sore shaping entity that could combine the synergies of both degenerates in the involve for alterd efficiency. The conjugation raised a heathenish box which created problems that atomic number 18 associated with presidential termal finish win over . In this paper, we analyze the conflater and achievement as thoroughly up as the recommendations for better performance of the bare-assly created entity. II. synopsis of the FactsThe attainment of the centering consulting pixilated A. T Kearney by an information technology firm EDS marked a substantive move by such(prenominal) a technology firm in acquiring unmatchable of the best management firms in the corporeal world. EDS bought A. T Kearney for a total of $300 billion in liquid cash and contingency payments as hearty as a crinkle incentive provision of seven million sh ares. The total amount was more than $600 million. The nuclear fusion reaction between the dickens firms was good as a result of the synergetic as healthy as complimentary industry, geographical as salubrious as morphological strength. The skill of A.T Kearney by EDS was ace of EDS grand vision of become a Defining Entity. III. Analysis An compendium of the case reveals that the merger and eruditeness greatly impacts governingal performance and organisational glossiness. Our digest covers the inwardnesss of mergers and encyclopedism on an organisational performance, success factors in M&038A as rise up as organizational elaboration smorgasbord and resistance that cut place in a merger and acquisition. The strategies of a successful M&038 A For A. T Kearney by EDS to merge suc cessfully, at that place is a need for the dish to be conducted smoothly. From the A. T Kearney by EDS case, we ealized that the integrating of the firms that has been acquired should be carried disclose as an ongoing functioning that moldiness be initiated prior to the closing of the gage. During this period of acquisition negotiation as thoroughly as its subjection to regulatory review, the management of the companies that are take up in the merger essential live on together in plan up a clear and becoming integration strategy. Ravenscraft and Scherer (1987) indicated that even if a sodding(a) investigation is carried out before the merger, nearly of the problems might never reveal themselves until at such a cadence that the deal has al lay out been done.The integration management of the new entity must be appropriately recognize as a very pellucid business function having an experienced double-decker who is especi whollyy appointed to oversee the integration w ait on. Should uncomfortable changes such as restructuring and layoff be necessary, it is crucial that the management of the newly organize entity to announce as well as implement these as soon as possible. This is necessary in rule to eliminate resistance to organizational change. The aim of such swiftness is to avoid the various uncertainties as well as anxieties that whitethorn desecrate the companys workforce in the newly formed entity.An some other important lesson that we flush toilet learn from this case is that it is important to flux both the practical as well as business of the companys workforce as well as their cultures. An optimal strategy is the one that involves the stagecoach to which the cultural battle butt end know between the various organizations can view as their own culture as well as identity as indicated by Appelbaum et al (2000). The merger between the deuce companies created synergies as well as in alone new services like CoSourcing.Cultural shock is famous in the study to be one of the main challenges that could have resulted as a result of the acquisition. A. T Kearney feared that thither would be a mass hegira of most of its excellent and professional staff. The say-so loss of clients was also envisioned. Organization culture is a term that is used to boot to the collection of values, policies ,beliefs and attitudes is an important as well as critical element of all organizations (Mullins,2010). Armstrong (2009) indicated that change is the only thing which is incessant in any organization.The work of Kotter (1990) even so noted that organizations are in a state of regular flux. The fact that organizational change is inevitable is a constant element of all organizations that seek to adapt to new challenges as well as approaches (Mullins,2010). The significance of organizational change is captured by Sloan (1967) when he indicated that market situations like the energising nature of the product and services united with the dynamic nature of the market itself can bring down a wedded business entity if the devoted entity is not ready for the culture change.The work of Kanter (1992) defined organizational change as the behavior of the organization to a certain degree or another(prenominal). organizational change has strategic and structural consequences at heart a given organization. This is be arrive at it involves the bear on of dismantling as well a restructuring of the various structures at bottom a given organization. Several problems can arise ascribable to organizational change (Czerniawska,2005). organizational change is a very critical and besides very inevitable process ofan organizations structure. It can create a lot of pressure from the workers as well as management as a result of fear of the unknown.Senior and Fleming (2006 ) noted that organizational change may affect the commonplace operations of the company as well as business functions. The forces that result in organizational change The work of Mullins (2010) indicated that on that point are several factors that can innovation organizational change. Thy may include irresolution in the corporate economics, competition as well as globalization. The work of Kanter (1999) identify certain factors that may trigger organizational change. They include information technology, globalization as well as consolidation all of which are relevant in this case.One of the study arguments for mergers and acquisitions is the notion that synergies do exist, allowing the two firms to work more effectively as one than they would when separate. Such synergies enables the firms to fully exploit economies of scale, approach pattern out the duplication of activities, share managerial expertise, and raise larger revenues (Ravenscraft and Scherer 1987). Unfortunately, research depicts that the foreseen gains lots fail to materialise after a merger (Hughes 1989). Horizontal mergers (between organizations oper ating at the resembling level, in the same industry) can be motivated by the quest of dominating their industry.In theory, bodies like Britains Competition Commission should not allow any tie-up that may bring about monopoly capable of misusing its powers. However, the determination to prevent such acquisitions and mergers are unceasingly controversial and politicized. Different authors have claimed that mergers are unlikely to effect monopolies even in the absence of such rules and laws, as there is lack of attestment that mergers have led to increase concentration of market power (George, 1989), though there can be exceptions within certain industries (Ravenscraft and Scherer, 1987).In given instances, companies have derived revenue enhancementation advantages from mergers and acquisitions. This has however beendisputed by Auerbauch and Reishus, (1988), who argued that tax considerations do not play an energetic role in encouraging companies to merge. Corporations on the oth er hand pursue mergers and acquisitions as a means of diversification, allowing them to explore new markets and distribute their risks. A firm may also seek to acquire another in belief that its target is undervalued, and thence abargain good becoming to generate high returns for the acquiring firms shareholders.These acquisitions are encouraged by desires to build empires parent firmss managers (Ravenscraft and Scherer, 1987). Most of the clock , acquisitions fail to generate returns for the acquiring company due to the fact that they bought it at a price higher than its value. Having been over-enthusiastic while buying, the purchaser may later discover that the bounteousness compensable duringthe acquisition for the shares (winners curse) eliminates all advantages do from the acquisition (Henry, 2002).However, it must be noted that even a deal that is pecuniaryly sound may turn out to be disastrous, if it is implemented in a means that does not take into scotch the organiz ations staff and the difference in corporate civilizations. Extreme contrasts may exist in the attitudes and values of the two firms, specifically if the emerging partnership is international. A merger or acquisition becomes a stressful process for the people involved retrenchments, reorganization, and the imposition of a new corporate culture and identity brings about uncertainty, fretfulness and hatred amongst a companys staff (Appelbaum et al,2000).Research has prove that a firms productivity may neglect by 25 to 50 per centumduring a large-scale change demoralization of the firms workers is the main fence for this (Tetenbaum, 1999). The companies attention are often paid to short term legal and financial goals rather than the implication of such mergers and acquisitions on corporate identity and communication, factors that may ultimately prove to be important in the long run due to their effect on the workforces morale and productivity (Balmer and Dinnie,1999)Huczynski an d Buchanan (2001) indicated that organizational change can greatly affect organizational performance. It might however be necessary to change the culture of agiven firm in order to enhance its performance. It is thus necessary for the process of organizational change to be managed well as well as controlled so as to suck in the results that are desired (Hayes,2007). The reality of an organizational change is noted by Calvello &038 Seamon (1995) to be very painful since might cause resistance and lower the morale of the employees. IV. RecommendationsIn order for the change process to be seamlessly smooth, EDS must involve itself in ever-changing the culture of the organization in a continuous and yet overlapping fashion. The resiliency of the employees must be fostered. The company must therefore concentrate its efforts in the the man and fostering of resilience of the employees. It should therefore create acultural neutral zone. This is to say that some time must be set by to allow the workers to effectively focus their synergies so that they may effectively cope with the organizational changes as well as uncertainties.The other alternative is change leadership. The newly created entity within EDS must embrace the process of change leadership and acknowledge it as a important element of organizational success. The most crucial element that an organizational leader can supplement in ana changing organization are conviction, authority and passion as noted by Kanter (2009). The change process must be incremental. Strategies for a successful merger and acquisition Tetenbaum (1999 presented seven strategies that can be industrious for a successful merger and acquisition to be realized.They included a soused involvement of the human resource managers in the process of acquisition. The building of an oreganizational capacity finished the paying of close attention to the process of employee retention as well as recruitment, ensuring that the process of integr ation is comelyly rivet on the effect that is desired, careful management of the cultural integration, quick completion of the acquisition process, effective communication as well as the development of a clear and yet standardized plan of integration. V. ConclusionThe merger between A. T Kearney and EDS is a clear example of the importance of proper management of organizational culture change. It is therefore crucial for merger and acquisitions to be carried out with a consideration of the possible culture shock that may affect the level of organizational performance. References Appelbaum, Steven H. , Gandell, Joy, Jobin, Francois, Proper, Shay, and Yortis, Harry (2000), Anatomy of a merger behavior of organizational factors and processes throughout the pre- during- post-stages,Management Decision, Vol. 8, Numbers 9 and 10 Balmer, John M. T. , and Dinnie, Keith (1999), Corporate identity and corporate communications the antidote to merger alienation,Corporate Communications An In ternational Journal, Vol. 4 Number 4 1999. Calvello, Mike and Seamon, Dan. (1995). reassign Management Through Transition Teams The Carolina magnate &038 Light Solution. Performance Improvement, v34 n4 pp 16-19. Czerniawska, F. (2005). From bottlenecks to blackberries How the relationship between organisations and individual is changing. Managing consultancies organisation. , 8-16. George, Kenneth (1989), Do we need a merger policy? . In spinal fusions and Merger Policy Henry, David (2002), Mergers Why Most freehand Deals Dont Pay Off,Business Week, October 14, 2002. Huczynski, A. and Buchanan, D. (2001) Organizational Behaviour. 4th ed. England scholar Hall. Kanter, R. M. (2009). Supercorp How Vanguard Companies give rise Innovation, Profits, Growth, and Social Good. New York Crown Business. Kanter, R. M. , Stein, B. A. and Jick, T. D. (1992). The altercate of Organizational Change. New York Free pressing Mullins, L. J. 2010) Management &038 Organizational Behavior 9th Ed. U. S. A. Pearson Prentice Hall Ravenscraft, David J. &038 Scherer, F. M. (1987),Mergers, Sell-offs and Economic Efficiency. Washington, DC The Brookings Institution. Senior, B. and Fleming, J. (2006) Organizational Change (3rd edn), Essex, Pearson Sloan,AP. (1967). My years in ecumenic Motors Taylor Cos, Jr. (1994) Cultural Diversity in Organizations U. S. A. Berrett- Koehler Publishers, Inc. Tetenbaum, Tony J. (1999), Beating the odds of merger and acquisition failure seven key practices that improve the chance for expected