Friday, March 21, 2008

Merger problems

IMHO, the most important problem with mergers is that the most talented people might leave the company being bought, eroding its actual worth right after the takeover. I think its important in mergers that the two companies do not immediately try to impose their identities on each but rather let it be a gradual process.

Consider that some people might have been working in a company for a long time and would be extreeely passionate about the identiy of their company, which would tto a great extent be entwined into their own identity.

To take away that whole identity in a single shot can be blow to anybody's self esteem. Hence the buying company needs to be very care in the way it handles the merger. I would think that keeping the identity of the other company as a subidentity of the parent company still helps in lessening the impact.

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