Preplanning Integration

Preplanning Integration

Introduction

HP acquired Compaq in 2002. The company had employed substantial preplanning integration strategies and was successful in integrating the company and achieving cost reduction targets. HP and Compaq were in the same line of business so they had to reduce the common production lines and reduce the excess staff. They planned and over achieved their targets of integration in terms of human resource reduction and cost reduction. However the economic conditions of the industry declined which resulted the missing of company targets for 2005. Consequently the CEO of HP had to step down.

Thesis Statement

The preplanning merger strategy lacked cultural awareness and short comings of industry analysis which resulted in unfavorable outcome of financial results.

Purpose of the Paper

The purpose of this paper is to obtain an understanding of preplanning integration of merger and the challenges a company faces while going through merger. The cultural challenges, the human resource motivation and the overall company strategy are primary discussion objectives of this paper.

Overview of the Paper

We will be looking at the effectiveness of the preplanning integrations and its positive contribution to the merger. We will evaluate if it can be considered a post-merger. We will assess the result of reductions of job and product lines on the cultural integration. We will also assess whether the merger planning had any shortfalls and reconsider the opinion of the case concluding it a failure.

Discussion

Effect of Merger Preplanning

The merger preplanning helped in numerous ways for Hewlett Packard as they had learned from the previous example of Chevron and Gulf Oil that they need to strengthen their pre and post management of the company. It reduced the uncertainty surrounding the merger and quickly reorganized the new company (Whitaker, 2012). The company lacked to take a deep insight on the cultural and overall positioning of the ...