To merge or not to merge, that is the question. Whether it is nobler Essay

To merge or not to merge, that is the question. Whether it is nobler in the mind to suffer the pains of negotiation & integratio - Essay Example A.T. Kearney noted that, despite the fact that mergers and acquisitions (M&A) activities having been associated with industrialized nations, the paradigm shift is taking effect (Kearney 2008, p.1). In this regard, Bruner (2004, p.21) reveals that as from 2002, merger deals between developed and third world countries have grown by 19 percent annually, which is far in excess of industrial average. This rate is also a clear indication that mergers are no longer a globalization strategy for developed countries only rather for developing countries, as well. The research found out that companies from third world countries such as China, India, Russia, Malaysia, South Africa, and the United Arab Emirates are seeking mergers with well-established companies in developed nations at an alarming rate. Kearney (2008, p.1) reveals that of the 2,168 mergers and acquisitions that were registered in 2007, 421-which accounts for about 20% were driven by firms from third world countries. The research a lso found that the trend is growing at the rate of 26 percent per annum. Research by Kearney (2008) found out that India is leading in cross-border mergers and acquisitions followed closely by Malaysia. This is attributed to the fact that the government of these two countries provides substantial tax incentives to companies to engage in high-tech business deals and enhance export. In contrast, Chinese companies have shied off M&A deals because of political interferences according to Wolff (2008, p.91). However, since China is developing very first, many companies from developed countries are seeking mergers with its domestic companies, with findings showing that at least one of every four cross-border transaction involves merger according to Harrington (2004, p.21). Nevertheless, research indicates that the U.S. companies lead in the acquisition and acquired. This dramatic increase in merger between companies as a globalization strategy has taken many people by surprising leaving ma ny companies, which have not made such a move wondering whether to merge or not to merge (Hoover 2000). This is because pundits have given varied opinions regarding mergers as a market penetration strategy. For instance, AT Kearney argues that global level mega-mergers are inevitable as part of the cycle of consolidation and concentration in globalising industries where firms seek to gain leverage and accelerate their presence. Ghemawat & Ghadar (2000, p.65), on the other hand, had a different view claiming that business leaders need to look away from mergers and be more innovative in their approach to international business. This paper will evaluate the arguments of the pro-merger and anti-merger school of thoughts. It will conclude with my personal position regarding whether mega-merger is a good or bad policy to pursue in international practice. Pro-merger school of thought To begin with, the business environment has become very competitive, and many companies today seek to globa lize their processes in order to beat the competition. In fact, many big corporations today have a global presence with those that have not gone global planning to do so as noted by McGarvey (1997). However, as earlier indicated, mergers have been on the rise over the last few year as the most preferred internationalization strategy. A.T Kearney (2008, p.1) in his school of thought argued that mega-mergers is inevitable as firms seek to leverage and become competitive. This

Report Essay Example | Topics and Well Written Essays - 2500 words - 16

Report - Essay Example Given that human labor is the main driving force towards attaining the core objectives of an institution, it is mandatory to ensure that they are acquainted with the skills and expertise needed to deliver quality services that meet the divergent needs of the international market. Recent research as documented by theorist Bassnet (2010) in his book: Statistical Data Analysis has sufficiently demonstrated that only about 25% of corporate business organization undertake regular capacity building through on-job training, workshops, international conferences and seminars that are geared towards instilling new insight and relevant skills within the labor force (Bassnet, 2010). The HR Director has been on the run to diagnose the cause of underperformance among a section of its employees and it has become eminent that the majority of them lack the required skills to match the current needs of consumers and meet the internationally set standards in the industry, demonstrating the scope of the study. The best practice relating to employee performance lies in the ability of the human resource department to diagnose the problem and identify the specific areas that are lacking; and require reinforcement and empowerment to meet the needs of the organization. This ensures that there is a holistic growth in the organization and that all departments work cohesively together to realize high productivity and remain competitive in the industry. When one department lags behind, the whole system’s performance is essentially affected hence the need to ensure that all the sectors work optimally without one derailing the activities of the other due to incompetence and lack of capacity to deliver. According to McGeorge (2010, p. 121), capacity building fundamentally entails equipping the labor force with the technical know-how in as far as their duties and responsibilities