cameron and green making-sense-of-change-management

The applicationswith or acquire a competitor to gain market share and increase itsmarketing strength.Public sector organizations may merge purely to achieve cost savings(often a guiltily held motivation) or to enhance partnership working inthe service of customers.Vertical integration is also an attraction. A company may decide tomerge with or acquire a customer or a supplier to achieve at least one ofthe following:• a dependable source of supply;• the ability to demand specialized supply;• lower costs of supply;• improved competitive position.Defensive measuresSome mergers are defensive and are a response to other mergers thatthreaten the commercial position of a company.Pressure to do a deal, any dealThere is often tremendous pressure on the CEO to reinvest cash andgrow reported earnings (Selden and Colvin, 2003). He or she may bebeing advised to make the deal quickly before a competitor does, so muchso that the CEO’s definition of success becomes completion of the dealrather than the longer-term programme of achieving intended benefits.This is dangerous because those merging or acquiring when in this frameof mind can easily overestimate potential revenue increases or costssavings. In short, they can get carried away.Feldmann and Spratt (1999) warn of the seductive nature of mergerand acquisition activity. ‘Executives everywhere, but most particularlythose in the world’s largest corporations and institutions, have a knack forfalling prey to their own hype and promotion… Implementation issimply a detail and shareholder value is just around the corner. This isquite simply delusional thinking.’226