Mergers and acquisitions represent ways for companies to grow, develop strategic positioning, acquire technologies and talents and develop synergies. However, more than 80% of the mergers and acquisitions done failed to produce any benefits while half of them led to a reduction of the value of the companies. This figure is really surprising when we consider the number of mergers and acquisitions occurring in a year. Nevertheless, a merger or an acquisition can also represent an opportunity. Indeed, one case out of eight represents a successful merger (or acquisition) where both companies come out stronger (such as the merger of Glaxo Wellcome and SmithKline in 2000). According to the specificities of both companies, of the industry, the success factor may vary from one situation to another. Whatever the reason why an organization is going to a merger or an acquisition, the good management of the Human resources during this process Continue reading
Strategic Management
Strategic management is the art and science of formulating, implementing and evaluating cross-functional decisions that will enable an organization to achieve its objectives. It involves the systematic identification of specifying the firm’s objectives, nurturing policies and strategies to achieve these objectives, and acquiring and making available these resources to implement the policies and strategies to achieve the firm’s objectives. Strategic management, therefore, integrates the activities of the various functional sectors of a business, such as marketing, sales, production etc. , to achieve organizational goals. It is generally the highest level of managerial activity, usually initiate by the board of directors and executed by the firm’s Chief Executive Officer (CEO) and executive team.
Strategic Thinking Dichotomies: Logical Thinking vs. Creative Thinking
It is mutually agreed that the converses of intuition and analysis generate tension during the strategic thinking process. Researchers and contributors to strategic management making the case for logic argue that for strategy to be effective, the strategic thinking process must involve extensive formal analyses and objective collection and processing of data both from within and without the corporation. Rational reasoning enables managers gain an accurate perspective on the different options available before identifying the strategic option that best serves the organization’s cause: achieving its goals and objectives. Logical analysis encompasses assessing internal and external risks, strengths and weaknesses, market need and so on; so that strategy can be thought out to fit each of the above factors. In contrast to logical thinking, creative thinking involves taking a “leap of imagination” without any logically defined reason for taking such a leap. Creative thinking is a divergence from the rules governing Continue reading
What is First Mover Advantage? Definition & Examples
In the business world that is characterized by cutthroat competition, businesses do whatever is in their capacity to gain a competitive advantage. One of the common desires for any business is to dominate an industry or a region by being the first to enter into the specific business area. As a business concept, first mover advantage is a highly preferred concept where businesses seek to dominate given business areas by being the pioneers. Although many examples show first mover advantage is not always the best, there are equally many success stories of being the pioneers in a given business area. Firstly, from a management viewpoint, any business that acquires customers in an area where other companies have not been established ends up being the market leader as the pioneer in the given business area. Such an organization has the technological leadership of the products it creates. The process of developing Continue reading
Application of Complexity Theory in Organizational Change
The organizational change is an integral part of every company nowadays. All organizations should be able to adapt to the rapidly changing environment. Globalization, technologies, pluralism, and multiculturalism are factors that predetermine the need to adapt to alternations to remain competitive in the sphere constantly. Managers may utilize a complexity theory to implement organizational change. According to this theory, the organizations are characterized by non-linear relationships and lack of order. Managers should identify the connection between variables to conduct an efficient change. Still, many employees resist to changes. Scientists and researchers have made many attempts to comprehend the way organizations function and develop. Various approaches to their understanding have been used. For instance, the organization was often compared to the machine. However, this seeing of organization is no longer relevant due to the development of other theories. The complexity theory presupposes that organizations function based on instability, entropy, nonlinearity, and Continue reading
The Role of Strategic Leadership in Change Management
Strategic Leadership The term ‘strategy’ is very common in the business world today. However, the word ‘strategy’ has been broadly used that it has lost clear meaning. Despite the significance of strategy, there is astoundingly little consensus on what it means. Nonetheless, the fact is that behind every success, there must be a strategy. A strategy is an ambiguous term normally linked to long-term planning, prearranged goals, and a preferred system of creating a balance between the organizational resources and externalities. The contemporary schools of thought in strategic management strongly suggest that strategy should be comprehended as the creation of the organization’s goals, which is realized through joint effort, regarded as a constant process, and distinctive strategic vision and core values are terms that are often used in strategic management. Strategic vision refers to the executive views on the long-term direction. On the other hand, core values are the principles and Continue reading
3 Important Models of Organisational Growth
An organization is a group of people who work together with coordinated efforts to achieve certain objectives or goals. Organisations are established by individuals or groups of individuals. During their formation, there is usually very little to talk about by the owner(s) and too much for them to do. Just like human beings, organisations need to grow so as to enable the owner or owners realize their objectives. If the aspect of growth is removed, then it becomes almost impossible for an organisation to exist beyond its formation stage. The signs of growth are expansion and increase in financial base. It also includes increase in the number of employees and diversification of a business as well as the separation of the owner from the business. Organisations also grow through mergers and acquisitions, all in the spirit of attaining their mission and vision. Business management commentators have described various models of organisational Continue reading