Five steps of acquisition:
1.. Develop an acquisition plan
Acquiring a business must be part of an overall strategic plan. Before initiating such an action, you must thoroughly analyze the risks involved.
Your acquisition option should meet the following objectives:
Increases your market share;
Provides increased or missing know-how;
Eliminates competition;
Establishes presence in an export market;
Complements your current situation or processes.
Your acquisition plan must define and align major success factors. For instance, the merging of business cultures and accounting/information systems are two factors often neglected.
2. Broaden the scope of due diligence
When acquisition of a company is the clear solution, the buyer normally agrees in principle to proceed with the transaction, provided due diligence shows that the reported facts are accurate. This involves examining the financial statements, legal status, inventories, etc., with in-house and outside experts in these areas. The objective is to ensure that every element has been covered.
The due diligence must not only confirm the vendor's good faith but also the soundness of the business, in terms of both its current situation and its development potential. For instance, if the majority of sales are generated by only a few customers, you should confirm that they intend to continue to do business with the company.
Although difficult to do, your due diligence must also take into account changes you intend to make to the company after acquisition. These changes may be essential, but their cost may substantially reduce the return on the capital invested.
3. Make changes quickly
Many mergers fail or partially fail because the buyer is slow to make changes in the acquired company. A prolonged transition is costly not only because of duplicated processes. It can also destroy the initiative of the managers as they put off important decisions while waiting for clear instructions. Thus, the acquired company can lose significant value in a short time.
Before the deal is signed, it is important to set up a strategic planning committee responsible for orchestrating the merger. If necessary, this committee can also form subcommittees comprised of representatives from both companies. Their job will be to integrate main operations as soon as possible once the deal is signed:
procurement;
production;
sales;
marketing;
accounting;
human resources;
information systems.
4. Give human resources a central role
The presence of a human resources representative on the central merger committee is essential. In fact, many companies include an HR representative at the due diligence stage if the deal seems certain. His or her job is to measure employees' reaction to the sale of the company, identify key people who should be kept on, and communicate decisions that might affect employees.
Throughout the merger process, communication with employees of both companies is crucial. If you are considering layoffs, it is better to let the people concerned know as soon as possible. This will improve the morale of all employees; otherwise, they will feel threatened for an extended period of time.
Retaining senior managers increases a merger's chance for success. Even if they are the most likely to resist change, their presence and experience will have a positive impact because they represent continuity.
5. Integrate the best of the two cultures
Instead of automatically applying your way of doing things to the acquired company, it is suggested that you combine the best methods of both companies for an overall general improvement.
This is often a smart move in the case of information systems. The differences between the technologies are often too great to allow for successful integration. The wisest decision is to adopt the best systems, even if they are not yours.
In some situations the benefits of changing your methods or making the acquired company adopt yours are not sufficient to justify the resulting disadvantages. This is often the case when you acquire a company outside your initial market.
Q2
Be aware of what data government collects and how it uses that data. Remember that the use that seems benign today may turn malevolent next year, and by then it’s too late. Evaluate a government data collection program not just on its merits but its potential for misuse in the future. Ask yourself, What could Hitler do with this database? That will tell you what its true potential is. Keep in mind nobody saw Hitler’s evil coming; he looked like a perfectly normal politician to almost everyone, putting Germany on the path to economic recovery, right up until he started exterminating people.
Q4
Business strategy is the primary driver of BPR initiatives and the other dimensions are governed by strategy's encompassing role. The organization dimension reflects the structural elements of the company, such as hierarchical levels, the composition of organizational units, and the distribution of work between them[citation needed]. Technology is concerned with the use of computer systems and other forms of communication technology in the business. In BPR, information technology is generally considered as playing a role as enabler of new forms of organizing and collaborating, rather than supporting existing business functions. The people / human resources dimension deals with aspects such as education, training, motivation and reward systems. The concept of business processes - interrelated activities aiming at creating a value added output to a customer - is the basic underlying idea of BPR. These processes are characterized by a number of attributes: Process ownership, customer focus, value adding, and cross-functionality.
Business strategy is the primary driver of BPR initiatives and the other dimensions are governed by strategy's encompassing role. The organization dimension reflects the structural elements of the company, such as hierarchical levels, the composition of organizational units, and the distribution of work between them[citation needed]. Technology is concerned with the use of computer systems and other forms of communication technology in the business. In BPR, information technology is generally considered as playing a role as enabler of new forms of organizing and collaborating, rather than supporting existing business functions. The people / human resources dimension deals with aspects such as education, training, motivation and reward systems. The concept of business processes - interrelated activities aiming at creating a value added output to a customer - is the basic underlying idea of BPR. These processes are characterized by a number of attributes: Process ownership, customer focus, value adding, and cross-functionality.
