Corporate Governance

Corporate Governance: Foreign Direct Investment

How would I Proceed?

Mergers and Acquisitions (M & As) have become a growing trend for companies large and small, domestic and foreign, to form strategic alliances within their industry sectors. There are many objectives specific I would seek to achieve when performing these processes, but the reason key is to ensure sustained achievement of growth that is profitable in the long run for my business. Today, companies face the challenges of a market and maintain a diversified global competitive advantage, making it almost essential to form alliances to enable them to become stronger financial institutions, enabling companies combine their resources, causing these strategies have a important performance in the economic expansion of countries, organizations, that have been used .

Before the merger of acquisition I would like to consider the environmental changes and their impact on my decision. In recent decades, environmental changes have led to a process international globalization of the economy and markets, the speed of technological innovations and the dramatic reduction of the life cycle of the products are only some of the factors that are forcing companies to reconsider the size of their companies, since the size is a key to achieving better competitive position . It is clear that any decision to merger / acquisition is a business decision strategic type whose main objective is to create value in the company, or avoid loss of it if the expected economic developments do not indicate company an optimistic future.

Institutional and Resource-based Issues

Charges duplicates, cultural conflicts, problems in the styles of leadership, resistance to the changes, unclear definitions of the desired situation, selection of new employees for key positions, benefit differences, break in psychological contract perceived lack of career growth or in the "new company", some people are converted into "passive" (how many years have you worked in the company), taking advantage of the situation, loss of sense of belonging, power, status, absenteeism, affect morale and productivity . Different cultures and values ??are ignored when integrating the two organizations. During negotiations, the issues discussed are strategic adjustments, commercial, financial goals, among others. However, the organizational setting; i.e. the compatibility of cultures, the union of sectors are neglected.

Whether individually, where dismissal is the most common resulting behavior against the mergers, as in key personnel or senior positions should not be managed in a hurry. In this process, bring into play the sense of belonging, managerial autonomy, a sense of loss against the announcement that "his" company was acquired, loss of identity of the person with your organization . A party is stronger and the other is weakened. Between 50 and 75 percent of key executives of acquired companies, voluntarily leave the company in the early years of the merger and shows a high turnover as an indicator of failure in integration (Boycotts). In order to avoid this situation I will have to be fair to the resource of the company I acquire and my existing human resource as ...