The analysis is based on the merger and acquisition between E.T Kearney and EDS. E.T Kearney is the largest management consulting group while EDS is a technology firm. The company’s merged to form a new defining entity that could combine the synergies of both firms in the quest for improved efficiency. The merger created a cultural shock which created problems that are associated with organizational culture change .In this paper, we analyze the merger and acquisition as well as the recommendations for better performance of the newly created entity.
II. Summary of the Facts
The acquisition of the management consulting firm A.T Kearney by an information technology firm EDS marked a significant move by …show more content…
The work of Kanter (1999) identified certain factors that may trigger organizational change. They include; information technology, globalization as well as consolidation all of which are relevant in this case.
One of the major arguments for mergers and acquisitions is the notion that "synergies" do exist, allowing the two firms to work more effectively as one than they would when separate. Such synergies enables the firms to fully exploit economies of scale, rule out the duplication of activities, share managerial expertise, and raise larger revenues (Ravenscraft and Scherer 1987). Unfortunately, research depicts that the foreseen gains often fail to materialise after a merger (Hughes 1989).
'Horizontal' mergers (between organizations operating at the same level, in the same industry) can be motivated by the quest of dominating their industry. In theory, bodies like Britain's Competition Commission should not allow any tie-up that may bring about monopoly capable of misusing its powers. However, the decision to prevent such acquisitions and mergers are always controversial and politicized. Different authors have claimed that mergers are unlikely to effect monopolies even in the absence of such rules and laws, as there is lack of attestment that mergers have led to increased concentration of market power (George, 1989), though there can be