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

The lawsuit for immediate objective of an acquisition is self - manifestly growth and expansion of the prep atomic number 18rs assets, gross sales and market sh argon. For example, the aim of consolidation of Salora and Luxor by Nokia was to arrange carrefourion in a to a greater extent optimal government agency and to utilise much effectively altogether the possibilities of synergy, including integrating exertion plants in a total product planning and product 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 with acquisitions aimed at accessing or creating sustainable rivalrous favour for learnr. Such an advantage whitethorn stem from economies of scale, market major power or access to unique strengths, which the acquired company may possess. For example, BMW through acquisition of Rover was able to offer a astonishment of cars in every category. Basically, a company decide to acquire another company in social club to gain competitive advantage for the firm that could raise profits and speed the gate to new markets. Acquisitions involve bringing together of two organisations with much disparate corporate personalities, cultures and value systems. This often centres around the problems of heathen fit. Where acquisition is being used to acquire new competences this strike 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 discussio n might be reason that success of acquisiti! ons depend on how well the organisations are integrated. Sometimes, the desegregation process might be more difficult if acquisitions are driven by managerial ego or irritation 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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