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Recent Organizational Problem In The Banking Industry: Problems With Mergers And Acquisitions

1420 words - 6 pages

Problems with Mergers and Acquisitions"We launched our offer to give Wachovia shareholders a choice, and the shareholders overwhelmingly endorsed our deal," said Phil Humann, chairman, president and CEO of SunTrust Bank, "Basically the investment community in New York and Boston got cold feet, so we lost. But it was a perfect deal, and if the same circumstances occurred, we'd do it again." At SunTrust Bank and in the banking industry, in general, mergers and acquisitions are a work related problem all too often. This paper will describe the setting, frame the problem in two different ways, each reflecting specific forces of influence, examine other forces of influence, and provide an answer to the dilemma, "How are we able to accept mergers and acquisitions in the workplace and still are able to get anything done?" Let us now take a look at what current problems exist with mergers and acquisitions.The SettingIn a real sense, acquiring, merging, partnering, and venturing with third parties can begin with what looks like clear-cut organizing of strategic plans, priorities, people, and finance, but end in disaster. The majority of acquisitions are not truly successful within the target time frame especially when it involves international transactions. When one decides to go the merger and acquisitions (M&A) route, they must remember to seek advice often and always. Down the M&A route it is critical to maximize value, pick the most synergistic consolidations, and prepare a post-merger integration plan. Technologies, accounting systems, operations, human resources, and other issues all need to be integrated - and this is where a lot of merged companies fail. A successful post merger-integration plan is essential for the long term of any combined company.The Acquisition ProcessThe acquisition process starts with planning the process and ends with planning how to make the acquisition a success after the closing. This is a logical approach. Actually, planning acquisitions never should end. If an acquisition is not successful, it will haunt the acquiring company for many years. However, a good acquisition is certainly an avenue of growth and evolution. According to SCI Services (2000), the Acquisition Process is as follows:1. Assess Goals, Strengths, Weaknesses, and Marketplace· Define the specific objectives of acquisition (acquire a company in the same line of business, purchase a product line or lines to complement current lines, raise the barriers of market entry for other would be competitor, eliminate a competitor, obtain new markets and /or new customers, be a global supplier for your major customers, etc.)· Asses the company's strategic position: define the business strengths and weaknesses as they relate to a growth acquisition strategy; also any constraints to execution.· Define the management capabilities for acquisition strategy implementation and post-acquisition integration.· Define financing capabilities...

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