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

The cause for immediate objective of an acquisition is self - obviously growth and expansion of the prep atomic number 18rs assets, gross sales and market sh be. For example, the aim of integration of Salora and Luxor by Nokia was to arrange carrefourion in a to a greater extent optimal guidance and to utilise more(prenominal) effectively altogether the possibilities of synergy, including integrating drudgery plants in a total product planning and turnout system BMW thought about acquiring bird of act as it was to small to survive on its own. However, a more fundamental objective whitethorn be the enhancement of shareholders wealth with acquisitions aimed at accessing or creating sustainable combative pick for hearr. Such an advantage whitethorn stem from economies of scale, market powerfulness or access to unique strengths, which the acquired company may possess. For example, BMW through acquisition of Rover was able to offer a bewilderment of cars in ev ery category. Basically, a company decide to acquire another company in launch to gain competitive advantage for the firm that could raise profits and speed the inlet to new markets. Acquisitions involve bringing together of two organisations with oftentimes disparate corporate personalities, cultures and value systems. This often centres around the problems of heathenish fit. Where acquisition is being used to acquire new competences this collide 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 discussion might be reason that success of acquisitions depend on how well the organisations are integrated. Sometimes, the desegregation process might be more difficult if acquisitions are driven by managerial ego or furor for power. Acquisitions driven by managerial self - interest may fail and cause wealth losses for shareholders. Successful acquisi! tions are wondrous from failed ones... If you want to get a full essay, order it on our website: OrderEssay.net

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