Mergers and Acquisitions



Mergers and Acquisitions

The majority of mergers and acquisitions (M&A) of companies fail. If this is so why do boards of directors stull continue to take over other firms? Give examples of successful as well as unsuccessful M&A, giving reasons for failure.

The fact is the majority of mergers and acquisitions (M&A) of companies fail. Still boards of directors continue to take over other firms as they want to get the required benefit that looks good on paper. On paper the scale shows a good graph of profits if the companies go for M&A but just opposite their desires a large number of companies that go for M&A had to face the failure. When they do their work prior to M&A the sum of two plus two becomes five. But on the other hand when they do the same thing practically the sum rather than resulting in five results in three. This has been discussed in many studies addressing several companies that go for M&A. But the question arises if the companies that merge had to face the failure then why do boards of directors stull continue to take over other firms?

The answer to this question is very simple. Most of the directors keep in mind the profit prospect in mind while going for or doing any business. Even when they think about taking a step for their business they first see the profit scale. In this way by focusing their all attention on the gaining profit they become successful in combining the companies or businesses but they do not give any consideration to their work force. After all these are all humans on whose efforts their businesses run. The directors going for M&A do not make any efforts for their integration of their employees or work force. As these administrators are keen to get the increase in profits that were expected, they take the acquisition as reports based on the gain of finances rather than a successful and energetic establishment whose core force is based upon human beings.

As the organization forget that their power lays in their employees or workforce whose efforts is necessary in making their organizations a success and the steps they should take in making their people comfortable while combining two establishments. They directors keep their attention on the plan, the market and on the finances as they are going for M&A. a very clear image of their acquisition is there in their minds and on papers as well. They also know when they form a new company after they merge two companies then how the new company would give the productivity. But as they are busy in their paper work and planning the requirements and needs of people are given less rather no importance.

Also, the employees or the work force as they are unaware of the objectives of the directors feel insecure about the merge of their company. They look at this alteration as a threat. They also do not have any say ...