CHAPTER 12 Flashcards
3 categories within mergers:
- HORIZONTAL MERGER
- VERTICAL MERGER
- CONGLOMERATE MERGER
Occurs when two or more companies join and form an entirely new company.
CONSOLIDATION
One company acquiring another company.
TAKEOVER
The cost reductions achieved by economies of scales produced by a merge or acquisition.
OPERATING SYNERGY
The merger or acquisition of two organizations that have a buyer-seller relationship.
VERTICAL INTEGRATION
It is the merging of two competitors, which combine to increase market power.
HORIZONTAL MERGER
The merger of a buyer a seller or supplier.
VERTICAL MERGER
The merger of two organizations competing in different markets.
CONGLOMERATE MERGER
The merger or acquisition of rivals.
HORIZONTAL MERGER
The set of important beliefs that members of an organization share.
CULTURE
4 options for culture mergers:
- CULTURAL PLURALISM
- CULTURAL INTEGRATION
- CULTURAL ASSIMILATION
- CULTURAL TRANSFORMATION
The partners co-exist.
CULTURAL PLURALISM
The partner organization blend current cultures together.
CULTURAL INTEGRATION
One company (usually the acquirer) absorbs the other.
CULTURAL ASSIMILATION
The partner companies abandon key elements of their current cultures and adopt new norms.
CULTURAL TRANSFORMATION
3 dimensions of HR planning in mergers and acquisitions:
- THE CONTINGENCY PLAN
- HR DUE DILIGENCE
- TRANSITION TEAM
Is a process through which a potential acquirer evaluates a target firm for acquisition.
DUE DILIGENCE
3 needs for a transition team:
- URGENCY
- INFORMATION GAP
- STRESS
4 elements of a good merger management process:
- FORMAL ANNOUNCEMENT
- MERGER HOTLINE
- MANAGERIAL TOOLKIT
- NEWSLETTER OR WEB PAGE
4 elements of a good merger management process:
- URGENCY
- INFORMATION GAP
- STRESS
3 types of situations when reviewing HR policies:
- COMPLEMENTARY
- DUPLICATED
- CONTRADICTORY
Where one company might focus on career development, while the other focuses on benefits.
COMPLEMENTARY
Where both companies have identical human resources information systems (HRIS).
DUPLICATED
Where one organization uses the performance management system for career development while the other uses its system to support incentive pay programs.
CONTRADICTORY
4 classifications of employees in mergers and acquisitions:
- TRANSITION
- INTEGRATION KEYS
- KEEPERS
- LONG-TERM STARS
Employees not needed in the new enterprise and requiring a plan to assist them in phasing out.
TRANSITION
Employees who possess critical skills for the transition period, but not for the future of the company.
INTEGRATION KEYS
High performers in needed roles.
KEEPERS
Key talent needed for the business.
LONG-TERM STARS
