With the merger, the senior management staffs were sent on early retirement Clerkin, 2009.
These were the same people that hunt had given a role to inculcate the notion of Built-to-last in the organization. What this implies is that those left in the organization would not easily carry on the legacy since no one is present to enforce or oversee it.
Need for understanding mergers
As was earlier mention, the merger between Arvin industries and Meritor was based on the similarity of ideology. The business case was not considered and more so part of profitability and market capture. The need to access not just the reason behind the merger but also the possible impact of the merger was missed out. The two principles were overwhelmed by the desire to build entities that would last inconsiderate of short-term and long-term result.
Assessments and tests
For the success of a merger, solid and practical planning process prior to a merger is necessary. The case presented by Arvin and Meritor is hugely different since the planning stage though undertaken independently did not seem cohesive Kusewitt, 1985.
The case for Arvin going for the Built-to-last culture seemed to yielding result and was embraced across the board. Incorporating Meritor without sufficient assessment of their embrace on the matter inadequate.
A merger where the drive is a culture requires that both sides to have a complete embrace of the same culture. The assessment of the impact that the merger would have is also necessary since adjustment will need to be made Kusewitt, 1985.
Undertaking mergers is expected to distort running of things in an organization whose impact need to be evaluated. Taking a plan on how to undertake the merger guided by the likely effects expected will give the merger an opportunity to contribute to success rather that draw backs Lubatkin et al., 2001()
Self-interest
Demsetz (1983) brings in the aspect of self-interest arguing that manager actions are driven by their own concern. This argument also known as the agency theory Demsetz (1983) is to a large extent seen in the merger of the two companies. The Two CEOs are seen to have brought in their ideology with an understanding and conviction to build an organization that will last. However, disregard to the potential impact the culture would have on the organization is not given. The CEOs seem to be blind to the potential impact on market control and profitability of their organizations. Their perspectives on the issue seem to be the merging of ideas to a culture will lead to sustainable growth.
Recommendations
Mergers seem to be a one-time opportunity towards success or failure. Lack of proper planning and management will lead to losing out on an opportunity to embrace success. The case at for Arvin and Meritor exemplifies what lack of planning and misconceived ideas on mergers can lead to. Entering a merger is a continuous process one that requires an initiation process long before the deal is made. Drawing agreements on the terms of the merger is not enough; the assessments of each company and its potential are required. At the stage of assessment, the necessary measures that will see to the success of the merger need to be rolled out. The companies need to access the changes they will have to undergo and where necessary provide measure to counter negative impacts of the merger. Thorough check on the need for reorientation of the companies resources to accommodate the merger and pending changes is necessary Balmer et al., 1999()
Duties need to be assigned to independent managers who will oversee the merger and communicate every measure taken to the management of the two companies. This will avoid sidelining the obligation to run one side of the organization all because a priority is given to the merger. The appointed managers to the merger will have a distinct function that will not interfere with the smooth running of the existing firms. This ensures that once the firms are integrated...
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