Organizational Issues of Mergers and Acquisitions

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When merging, organizations must bring together their technologies.

Not all businesses use the same software (and hardware) to make sure everything is running smoothly. However, if they wish to merge, they will need to decide on one common line of software to use through the entire new organization. This will ensure that communication between the businesses is not hindered.

The simplest route for this is to choose the best tech platform among the ones already used, and migrate all merging companies to it. Picking out the best software isn’t just about which one is technologically superior, but also choosing the organizational benefit of one over the other. For example, one company might be using 500 computers, and the other has slightly better software installed on 200 computers. They must decide which is more feasible and beneficial, installing new (better) software on 500 computers or 200. Some types of software are also easier to install, so there are many factors to consider.

Being Prepared For Procedural Changes 

the marketing mix is the set of choices the firm offers to its targeted markets.

We already know of the 4Ps of the marketing mix (product, place, promotion, price). Some experts go on to add more: process and individuals (people). Even if the functions of the business are entirely internal, there is a clear benefit of applying marketing principles here. This is because the different departments within an enterprise can be considered very similar to potential customers when two or more companies need to integrate for a merger.

Integrating functionalities between businesses is crucial for a merger to be successful because it will create a new, standardized normal for the new organization and help run things smoothly.

Tech Problems That Mergers May Face

Many technological issues need to be dealt with when integrating systems or migrating business functions to an entirely new platform. These are only a few questions that would need answering:

  • Can the communications protocols work with each other?
  • Does existing hardware support the new software?
  • Can the databases be integrated without adding the tedium of manual entry?

The biggest mistake the business make when intending on a merger is making the assumption that all they need is to connect via network interfaces. If they truly want to become one enterprise, the processes, functions and protocols of the entire organization must be standardized into one form. There is absolutely no room for variation within the new organization.

Management needs to take into account as many of the possible obstacles they may face. Once they are identified, they can be dealt with ahead of time. Budgeting should also include some leeway for any unforeseen problems that may arise. Within reason, management can ensure that integrations multiple business systems together can run smoothly and with the least problems.

Communication Is An Integral Part Of Merging

Nothing in this world is perfect. If a merge is implemented perfectly, there would have been platform analyses, in-depth research that involves users, manufacturers, vendors, suppliers and everyone else that deals with a business. However, like we said – this isn’t a perfect world. Integrating technologies between two or more companies is usually only taking into account the economic aspects, and rarely is the ideal choice made. The new environment is certainly far from perfect.

Transitioning to a new system requires change management to ensure that the transition is smooth. This usually involves notification of changes well before they are implemented, and collecting feedback from users. The feedback can offer insights on how the transition can best be implement and even provide suggestions as to the best time for transitioning.

Procedural Justice and Communication

After new procedures and protocols are implemented, it is important to ask how fair the new system is in the eyes of both the people who implemented changed and those impacted by them. This concept is known as judging the extend of procedural justice.

One thing that must be kept in mind, is that all different departments within an organization can affect each other when changes are made within them. For example, if a new system is being using by the accounting team, the finance department may be affected even if they do not make any major changes in their procedures due to the merger. When implementing a new system it is of utmost importance to take all effects into consideration, and communicate the anticipated changes to the relevant functional group within the business. This way, procedural justice may be ensured.

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