Chapter 4 Flashcards
International M&A
One firm in one country acquires a firm in another country
Int. JV
Two or more companies in two or more countries create a company
Alliance
Two companies come together on a mutually rewarding agreement
What is an equity based international combination
A merger and acquisition or joint venture
What is a non-equity international combination
Two companies that come together and share profits responsibilities and resources based on a contractual relationship. Each operate as a separate legal entity. Examples would be the energy sector, And R&D.
Our international combinations successful
It’s reported that 50% of all international combinations fail within the first few years.
Reasons for acquisition or alliance
Industry consolidation Geography expansion New markets New technology Economies of scale
Name the 3 stages of combination
Pre combination
Combination planning and signing of agreement
Post combination and implementation
What is one of HRs primary roles during the implementation stage of a merger
Communication
Why do mergers and acquisitions fail
Incompatibility of people, culture and HR systems.
What is a common integration problem with M&As
Resistance to change
What is acculturation
Employees and organizations adapting and reacting to one another’s culture
With respect to acculturation what is a portfolio result
Both comps maintain separate identities
What is blending
The best of both cultures coming together to form a better culture
New creation
Develop a new culture that fits the new organization
Assimilation
Choose one culture and force onto another
What is the most difficult aspect to manage with a M&A
Cultural integration
What is divestiture (dissolution, demerging, spinning off or selling off parts)
Separation process when a firm is bought
Four stages of IJVs
Formation of partnership
Development of the ijv
Implementation
Advancement
Operator model
Where there is one dominant partner
Shared model
Where the org draws on culture and practices from both partners
The autonomous model
New org culture is purposefully developed
