Mergers and Acquisitions
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When it comes to your workforce, mistakes can be costly. A simple org chart provides a visual hierarchy for your reference. It can help companies understand the future entity and to anticipate workforce changes in order to make crucial decisions. Even though the market is often unpredictable, organizational charts will make the process of [[Workforce Planning|workforce planning]] easier and quicker. | When it comes to your workforce, mistakes can be costly. A simple org chart provides a visual hierarchy for your reference. It can help companies understand the future entity and to anticipate workforce changes in order to make crucial decisions. Even though the market is often unpredictable, organizational charts will make the process of [[Workforce Planning|workforce planning]] easier and quicker. | ||
| - | '''Once a merger or acquisition has been finalized, how does management successfully combine the companies of, say, | + | '''Once a merger or acquisition has been finalized, how does management successfully combine the companies of, say, 5000 employees with another company of 2,000 employees?''' This task can be daunting for upper management because of the difficulty to visualize and manage thousands of employees. Setting new budgets, pay scales, updating personnel information, and organizing the new structure can take considerable time and require expertise to keep employee data in order. [[M&A Tools|Org charting becomes essential]] and the most efficient way to tackle this seemingly overwhelming task. |
The M&A task becomes much easier to execute when companies are able to centralize all the data and personnel profiles, which in turn helps management and HR professionals to: | The M&A task becomes much easier to execute when companies are able to centralize all the data and personnel profiles, which in turn helps management and HR professionals to: | ||
Current revision as of 15:43, 8 June 2010
Contents |
Mergers and Acquisitions
Mergers and acquisitions (M&A) is a business term referring to the management and strategy involved with buying, selling or combining companies. A merger is the combination of two companies into one, and an acquisition is when one company purchases another and becomes its new owner. In either circumstance, time is critical. With every week in the planning process, costs increase, key talent flees, and the combined organizations’ ability to meet business goals is in greater jeopardy.
M&A decisions can be simplified with the use of org chart software. Acquisitions teams can build a picture of each organization, complete with costs, reporting relationships and other key data. In addition, they can create multiple ‘what if’ scenarios with metrics that reflect financial implications of each. Teams can easily identify duplicate or missing roles and align resources to fix the problem. Each scenario also will show how close their plan is to meeting headcount and budget objectives.
There are several types of mergers including:
- Vertical merger consists of the combination of two or more companies that are at different levels of the supply chain for one specific product or service (also known as a conglomerate merger)
- Horizontal merger occurs when two or more businesses that produce the same or similar products or services combine under one name
- Extensional merger occurs when similar businesses combine to enter a new product market separate from what they already specialize in
An acquisition occurs when one firm absorbs another, either on friendly or unfriendly terms, giving up all ownership rights of the acquired corporation:
- Friendly acquisition occurs when the target firm agrees to give up ownership due to certain circumstances, such as a looming bankruptcy
- Hostile takeover occurs when the target firm is simply taken over and ownership is lost. The larger, more profitable company generally takes over the smaller, target company without its consent.
- The Clayton Antitrust Act of 1914 and the Sherman Antitrust Act of 1890 aim to prevent against monopolies being created through hostile takeovers by setting specifications about the percentage of market share growth that can follow an M&A
Mergers and Acquisitions in the Current Economy
With market fluctuations, businesses often decide to merge with or acquire less profitable or smaller companies to gain financial resources and market share. This event involves buying, selling or combining company resources of two or more organizations to enter new markets, increase the overall company price tag or gain market share. This event involves buying, selling or combining company resources of two or more organizations to enter new markets, increase the overall company price tag or gain market share. A main component of M&A is the combination of each company's most important asset - the workforce.
When it comes to your workforce, mistakes can be costly. A simple org chart provides a visual hierarchy for your reference. It can help companies understand the future entity and to anticipate workforce changes in order to make crucial decisions. Even though the market is often unpredictable, organizational charts will make the process of workforce planning easier and quicker.
Once a merger or acquisition has been finalized, how does management successfully combine the companies of, say, 5000 employees with another company of 2,000 employees? This task can be daunting for upper management because of the difficulty to visualize and manage thousands of employees. Setting new budgets, pay scales, updating personnel information, and organizing the new structure can take considerable time and require expertise to keep employee data in order. Org charting becomes essential and the most efficient way to tackle this seemingly overwhelming task.
The M&A task becomes much easier to execute when companies are able to centralize all the data and personnel profiles, which in turn helps management and HR professionals to:
- Make appropriate budgetary decisions and allocate resources accordingly
- Customize personnel profiles to include tenure, salary, age, position, etc.
- Perform "what if" analysis prior to, during and post merger/acquisition stages
- Quickly combine the multiple entities in one central location
- Map out the future company layout
- Visualize and analyze the company logistics
- Make important decisions about employee reductions or promotions
See Also
