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May 01, 2023
    1. Answer:


      A merger is an agreement between two firms or companies to combine their functions and create a singular legal entity. For example, if one corporation absorbs the second one by purchasing it, it is an acquisition. Generally, corporate mergers could be noticed when small businesses or large corporations merge to strengthen their position in new or multiple markets and enhance their efficiency in their operations (LIN et al., 2013).

      The Benefit Of Mergers: -

      The benefit of a merger is typically expected to include:

      • Reduced costs by removing duplication or gaining access to raw materials or processing capacity at a lower price.  
      • Higher salesforce/ delivery efficiency by increasing the utilization/ average sales of an employee
      • Increased sales by increasing sales routes or markets, where the product of company A can be sold via routes/ markets of B and vice versa.
      • It reduces funding costs where the business has cash balances or generates cash, and the other borrows or requires high working capital.
      • Sometimes it is done to allow company A to achieve a stock market listing at a lower cost than a complete listing.
      • Short-term share price gains (Banakas, 2018)

      The type of merger that took place was a Horizontal merger: for the kind of merger, the combination of two or more companies takes place, which is similar in production, distribution of the location of business where the main aim is to reduce the competition in the market in a larger scale, increasing market size, and taking benefit for economies of scale. The main objective of this type of merger is to reduce competition in the market by combining their products and services to form a new organization. This type of merger expands quickly compared to other mergers and acquisitions (Ibrahimi & Meghouar, 2019).

      Ans 2- The (HR) Department

      Plays an essential role in mergers between two companies. It is an integral part of the growth of the company. Cynthia acted as a trusted adviser for the people working in the organization. She also plays a leadership role in the merger and acquisition process. She alkalizes the organizational cultures of both companies because it’s her responsibility for a smooth transition by guiding employees about the new corporate culture (Rodríguez-Sánchez, 2018). The steps that Cynthia takes are: -

      • Management trend of both organizations.
      • The growth rate of the companies.
      • Selectively in the hiring process.
      • Perks and benefits that employees enjoy.
      • The attitude of staff to embrace the new corporate culture.

      Cynthia boosts the morale of anxious employees; it is essential because some employees face difficulties in adopting the new culture that’s why she acted as comporting factor among employees: -

      • She boosted the confidence of employees.
      • Keeps communicating with the team members and conveying their anxieties to the management.
      • They offered good training programs to managers to adapt themselves to the new organizational culture.
      • We are upgrading effectiveness by identifying leaders from organizations.
      • She enhances innovation by placing the right candidate in the right place.
      • They are reducing the fear of employees to continue productivity.
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