CHAPTER 12

Question 1

3 categories within mergers:

Answer 1

1. HORIZONTAL MERGER
2. VERTICAL MERGER
3. CONGLOMERATE MERGER

Question 2

Occurs when two or more companies join and form an entirely new company.

Answer 2

CONSOLIDATION

Question 3

One company acquiring another company.

Answer 3

TAKEOVER

Question 4

The cost reductions achieved by economies of scales produced by a merge or acquisition.

Answer 4

OPERATING SYNERGY

Question 5

The merger or acquisition of two organizations that have a buyer-seller relationship.

Answer 5

VERTICAL INTEGRATION

Question 6

It is the merging of two competitors, which combine to increase market power.

Answer 6

HORIZONTAL MERGER

Question 7

The merger of a buyer a seller or supplier.

Answer 7

VERTICAL MERGER

Question 8

The merger of two organizations competing in different markets.

Answer 8

CONGLOMERATE MERGER

Question 9

The merger or acquisition of rivals.

Answer 9

HORIZONTAL MERGER

Question 10

The set of important beliefs that members of an organization share.

Answer 10

CULTURE

Question 11

4 options for culture mergers:

Answer 11

1. CULTURAL PLURALISM
2. CULTURAL INTEGRATION
3. CULTURAL ASSIMILATION
4. CULTURAL TRANSFORMATION

Question 12

The partners co-exist.

Answer 12

CULTURAL PLURALISM

Question 13

The partner organization blend current cultures together.

Answer 13

CULTURAL INTEGRATION

Question 14

One company (usually the acquirer) absorbs the other.

Answer 14

CULTURAL ASSIMILATION

Question 15

The partner companies abandon key elements of their current cultures and adopt new norms.

Answer 15

CULTURAL TRANSFORMATION

Question 16

3 dimensions of HR planning in mergers and acquisitions:

Answer 16

1. THE CONTINGENCY PLAN
2. HR DUE DILIGENCE
3. TRANSITION TEAM

Question 17

Is a process through which a potential acquirer evaluates a target firm for acquisition.

Answer 17

DUE DILIGENCE

Question 18

3 needs for a transition team:

Answer 18

1. URGENCY
2. INFORMATION GAP
3. STRESS

Question 19

4 elements of a good merger management process:

Answer 19

1. FORMAL ANNOUNCEMENT
2. MERGER HOTLINE
3. MANAGERIAL TOOLKIT
4. NEWSLETTER OR WEB PAGE

Question 20

4 elements of a good merger management process:

Answer 20

1. URGENCY
2. INFORMATION GAP
3. STRESS

Question 21

3 types of situations when reviewing HR policies:

Answer 21

1. COMPLEMENTARY
2. DUPLICATED
3. CONTRADICTORY

Question 22

Where one company might focus on career development, while the other focuses on benefits.

Answer 22

COMPLEMENTARY

Question 23

Where both companies have identical human resources information systems (HRIS).

Answer 23

DUPLICATED

Question 24

Where one organization uses the performance management system for career development while the other uses its system to support incentive pay programs.

Answer 24

CONTRADICTORY

Question 25

4 classifications of employees in mergers and acquisitions:

Answer 25

1. TRANSITION
2. INTEGRATION KEYS
3. KEEPERS
4. LONG-TERM STARS

Question 26

Employees not needed in the new enterprise and requiring a plan to assist them in phasing out.

Answer 26

TRANSITION

Question 27

Employees who possess critical skills for the transition period, but not for the future of the company.

Answer 27

INTEGRATION KEYS

Question 28

High performers in needed roles.

Answer 28

KEEPERS

Question 29

Key talent needed for the business.

Answer 29

LONG-TERM STARS