The paper 'Mergers and Acquisitions Are the Key to an Organisations Strategic Development of Knowledge' is a great example of a Management Assignment. DePamphilis, (2009) defines a merger as the occurrence where two legal firms come together, in a bid to increase profits, combine to form a new legal entity. This way, the two old ones become one. The author describes the acquisition as the process where a firm/company dissolves into another one. In this process, the target company disappears, leading to the formation of a new, stronger company with more shares.
Fowler and Schnierderjans, (1989) say that though, the difference between the two terms has gradually become less relevant. Further on, it is apparent that most decisions in business organizations are relatively straightforward to make. The most complex involves acquisitions and mergers. Knowledge acquisition is simply the gathering of facts and logistics involved in the whole process to get ideas on how to go about the process. It is also known as due diligence that requires research or investigation of potential investments. It entails the caution a reasonable management team should use before entering into binding agreements about such sensitive issues as M& A. As such, it is important to be knowledgeable and employ expertise in carrying out these important functions of management.
The Merger and Acquisition (M & A) concept has become a household one. Many entrepreneurs use this strategy as a means to value creation through the combining of energies (synergy). Due to the compound nature of the processes involved in the M& A concept, it is, therefore, important that the parties involved acquaint themselves with the types of mergers and acquisitions, the implications of the steps taken, and the possible long-term effects to the running of the business.
Being a rigorous legal process, it is of the utmost value to take the time to gain knowledge about it. This essay looks into the logistics, the efficacy, the value creation, and the prestige derived from the process. It will delve further into finding answers for questions such as why mergers? Why acquisitions? What are the implications of the bold steps taken by the management? Why take the risk when there are many options to value creation?
Do Mergers and Acquisitions always succeed? What are some of the situations that lead to either the success or the failure of M& As? Ultimately, the essay will focus on the knowledge that needs to be acquired to get viable results from mergers and acquisitions. It is imperative to comprehend the types of alliances and the risks involved in each in to understand the concept better. There are vertical mergers that involve the combining of two firms that are in the same line of production.
These are along the chain of value. For instance, a supplier can decide to merge with the producer/manufacturer so as to create a competitive advantage over other similar manufacturers. For example, X, a manufacturer, may choose to combine with Y, a supplier of their goods, to compete with efficacy. Firms that merge to engage the market with the same products are called Horizontal mergers. Mobil, an oil supply company may merge with Universal, a supplier of gas products, to offer related products and increase their market share. Conglomerates involve the merging of two different markets.
They are meant to chart a way forward for business growth due to the wide fluctuations in the market. For instance, a publishing house merges with a digital marketing company to explore new ways of doing business with efficacy.
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