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MLA
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Business & Marketing
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Why is It so Difficult to Integrate Firms Together After an Acquisition

Essay Instructions:

Read the case below and answer the below question in a Discussion Board post.
Why is it so difficult to integrate firms together after an acquisition?
Procter and Gambles Struggles with and Learns from Acquisitions
When A.G. Lafley was the CEO of Procter and Gamble, he commissioned a study to assess the level of success and failure the firm had experienced with its acquisitions. He was shocked to find that, when they looked at the acquisitions P&G had undertaken from 1970–2000, less than 30 percent of them met the investment objectives of the acquisition and were deemed successful. They further found that failures typically resulted from one or more of the following five factors: (1) absence of a winning strategy for the combination, (2) not integrating the acquired unit well or quickly enough, (3) expected synergies didn't materialize, (4) cultures weren't compatible, and (5) leadership couldn't play well together. Thus, one of the root causes related to a lack of strategic logic. The other four revolved around the inability to make a potentially valuable acquisition work, often because of personal or cultural differences.
However, Lafley didn't stop there. He was determined to have P&G learn from its mistakes. He and his team took the results of this assessment and changed their acquisition integration processes. They saw their success rate with acquisitions rose from 30 percent to 60 percent over the 2001–2010 time period, partly as a result of this exercise.

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Business Strategy Discussion
If the acquiring company doesn't have a clear plan for how the two companies will work together, it will be challenging to integrate them effectively. In the case of Procter and Gamble, the lack of a winning strategy for the combination of the two companies was one of the critical factors that led to unsuccessful acquisitions. This suggests that the integration process can be complicated without a clear strategic vision for how the two companies will work together.
Acquiring another company means developing its culture as well. If the two organizations have very different values, norms, and ways of doing things, it can be challenging to mesh them together. The Procter and Gamble case exhibits cultural differences as one of the critical factors that contributed to unsuccessful acquisitions. When two companies come together, they often have different ways of doing things: different values, different management ...
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