Why are acquisitions such a popular method of strategic development despite the evidence that they are often unsuccessful?

The reason out for immediate objective of an acquisition is self - plain growth and expansion of the prep atomic number 18rs assets, gross sales and market sh be. For example, the aim of integrating of Salora and Luxor by Nokia was to arrange carrefourion in a to a greater extent optimal port and to utilise more than effectively altogether the possibilities of synergy, including integrating outturn plants in a total product planning and w are system BMW thought about acquiring bird of race as it was to small to survive on its own. However, a more fundamental objective whitethorn be the enhancement of shareholders wealthiness finished acquisitions aimed at accessing or creating sustainable free-enterprise(a) opt for letr. Such an advantage may stem from economies of scale, market index or access to unique strengths, which the acquired company may possess. For example, BMW through acquisition of Rover was able to offer a amazement of cars in every category . Basically, a company decide to acquire another company in found to gain competitive advantage for the firm that could raise profits and speed the opening to new markets. Acquisitions involve bringing together of two organisations with frequently disparate corporate personalities, cultures and value systems. This often centres around the problems of pagan fit. Where acquisition is being used to acquire new competences this meeting of cultures may arise because the organisational routines are so different in each organisation.

Cultural differences reflected the way that the decisions were made in the acquirer and target companies. From the above discussion might be reason that success of acquisitions depend on how well t! he organisations are integrated. Sometimes, the desegregation process might be more difficult if acquisitions are driven by managerial ego or offense for power. Acquisitions driven by managerial self - interest may fail and cause wealth losses for shareholders. Successful acquisitions are wondrous from failed ones... If you want to get a full essay, order it on our website: OrderEssay.net

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