...& ADTRANZ AQUISITION CASE) ] BBDs kin approach to integration of acquired companies enabled greater combination potential as this approach brought about strong employee support because there was the belief that BBD would protect jobs and invest in new product lines. BBD’s approach to integration was seen in the acquiring of Adtranz despite the fact that the company agreed to a limited due diligence process for the deal to go through. The agreement to a limited due diligence process was due to the fact that there were great strategy and business similarity between the two companies and Adtranz was working to streamline its operations and this was a concept that BT was willing to buy into. The integrative model taken by BBD defines how synergy realization is possible when there are similarities between the...
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...Sterling Household Products Company Acquisition of the Germicidal, Sanitation and Anitseptic Unit of Montagne Medical Instruments Company Executive Summary Sterling Household Products Company manufactured and marketed a wide variety of consumer goods products which were sold domestically as well internationally. Despite having great products and being positioned well in the industry, Sterling’s growth prospects were limited. Sterling’s decision to acquire the germicidal, sanitation and antiseptic production unit of Montagne Medical Instruments Company could provide the much needed growth. Furthermore, the division was well aligned with Sterling’s existing operations, helping Sterling diversify its business without compromising on its core competency. Assuming the growth rate of 3% for terminal value calculation, aligned with the GDP growth of US, the net present value (NPV) of the investment comes to $99.7 million. We also analyzed the NPV of acquisition under two scenarios - 0% growth and terminal value calculated using multiples of 9. As the acquisition provides immense opportunities for Sterling to further expand its production capacity, we calculate the NPV of $167 million. We firmly believe that Sterling should acquire Montagne Medical’s unit as it presents positive synergistic effect on Sterling’s cash flows. Business Risk The unlevered asset beta represents the pure business risk of the company. It does not take into consideration the effect of debt leverage...
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...the areas of strength and weakness in the companies is the (Efficiency in communication skills) for example while company A's weakness due to the bad communicate with the customers and clients this could be the strength of company B which has excellent communication with the clients which is approaching the prospective of the clients and achieve their desires and it just makes the clients want to start a business with this company. Human resource assessment for example the attendance of the employees could be a weakness point to company A which is suffering from low rate of attendance but actually it will be a strength point to company B which has an excellent rate of attendance. Other example of human resource assessment is the (synergy effect) it means the group or team working when they work together their outcomes will be...
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...security guard industry, Pinkerton, for $100 million. Throughout the bidding process, he has faced skepticism from his board of directors as they consider the purchase to result in a overload for CPP’s corporate management. Can Mr. Wathen convince his board of directors that Pinkerton is worth the $100 million? If yes, how should Mr. Wathen finance the acquisition? Is he in any danger of being outbid by other players? We value Pinkerton under American Brands to $73.25 million, using a P/E multiple (Wackenhut) of 12.2 times Pinkerton’s NOPLAT in 1988 of $5.98 million. For Wathen however, including the possibility of any synergies created by a potential takeover, we reach a final value of $187.06 million, where synergy effects value is estimated to $19.4 million. However, in a pessimistic scenario the value of Pinkerton would be $141.51 million without any synergy effects. Taking the assumption of a 50/50 probability of either of the two scenarios might occur (in lack of better information); we reach an estimated value of $166.28 million. We recommend that Wathen bid the $100 million, by raising $75 million debt and $25 million equity. Wathen (CPP) should bid on Pinkerton, as our estimated value of a merger exceeds the cost. However, Wathen has insufficient solvency to finance the entire bid with debt, and should thus choose the other option with 75% debt financing. An overview of the valuation, when using the $75 million debt to finance the bid can be seen in exhibit 1. By estimating...
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...in the process. Please let me know if you have questions or need further information. Yours truly, Brian Smith Enclosure Future analytical approach It is my opinion, that when dealing with future acquisitions, financial and accounting analysis is simply not enough. Therefore, it is my recommendation that an aggregate analytical approach include not just fundamental analysis, but also; corporate culture, synergy and customer analysis. Corporate Culture Analysis Future acquisitions need to carefully examine the morale and culture of the company being sought after. An overly dependent employee base that clings to its President and CEO presents a certain risk in production loss should the CEO exit the firm. As with the acquisition of Bainbridge House, morale dropped and attrition skyrocketed after Mr. Bainbridge’s passing. A high attrition rate and low morale has been shown to negatively affect production and overall efficiency. Therefore, a careful analysis needs to identify the independence and competitiveness of company employees. Synergy Analysis It is not enough to purchase a company based on fundamentals alone. If the company cultures of your firm and the firm being acquired are incompatible, valuable time will be lost looking for personnel replacements. Incompatibilities arise when the two companies have completely different goals and visions. As such, I recommend analyzing the takeover target’s mission statement, managerial goals, and obtaining an...
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...5 Factors Affecting Team Effectiveness In An Organisation Some of the factors affecting team effectiveness are shown as follows: While informal work groups often develop feelings of close affiliation among members, formal work groups sometimes do not develop such loyalty. It is very important for management to develop, among the group members, such characteristics as dedication and cohesiveness. As Likert concludes: “Management will make full use of the potential capacities of its human resources only when each person in the organization is a member of one or more effectively functioning work groups that have a high degree of group loyalty, effective skills of interaction, and high performance goals.” To build an effective team, the management must provide an environment which is conducive to team work with an attitude which is understanding and supportive of team efforts and innovation. It is a real challenge to management to learn how to use groups more effectively. a. Individuals: A group is as good as the individuals who form the group. If the individuals are dedicated and consciously aware of their roles and their responsibilities towards accomplishing their group and organizational objectives, then the group would be an effective group. It is necessary and important that all members must share the enthusiasm of group activities and group accomplishments. b. Group size: It is difficult to determine as to what the optimal group size is, but such a size would depend...
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...Synergy Synergy takes the form of revenue enhancement and cost savings. By merging, the companies hope to benefit from the following: * Staff reductions - As every employee knows, mergers tend to mean job losses. Consider all the money saved from reducing the number of staff members from accounting, marketing and other departments. Job cuts will also include the former CEO, who typically leaves with a compensation package. * Economies of scale - Yes, size matters. Whether it's purchasing stationery or a new corporate IT system, a bigger company placing the orders can save more on costs. Mergers also translate into improved purchasing power to buy equipment or office supplies - when placing larger orders, companies have a greater ability to negotiate prices with their suppliers. * Acquiring new technology - To stay competitive, companies need to stay on top of technological developments and their business applications. By buying a smaller company with unique technologies, a large company can maintain or develop a competitive edge. * Improved market reach and industry visibility - Companies buy companies to reach new markets and grow revenues and earnings. A merge may expand two companies' marketing and distribution, giving them new sales opportunities. A merger can also improve a company's standing in the investment community: bigger firms often have an easier time raising capital than smaller ones. That said, achieving synergy is easier said than done...
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...Synergy in the Whirlpool Environment Larry A. LaPine MGT 498 June 28, 2013 Timothy Fiscus Synergy in the Whirlpool Environment Many organizations today rely on the objectives, but fail to focus on the means to achieve the objective. Some of these organizations refuse to be flexible by adjusting to market trends and rely solely on today and the past instead of focusing the objectives to the future. If one knows the organizational strength and understands what objectives the organization is trying to obtain, the organization can work through weaknesses and threats, and use opportunities to maintain sustainability. Any organization can succeed with this strategy by remaining focused on the objectives. Most industries today are facing an ever-increasing level of environmental uncertainty so organizations scan their environment to understand the external forces of change, even industries that used to be entirely domestic are becoming global in their manufacturing processes. Whirlpool Corporation is the world's leading manufacturer and marketer of major home appliances with annual sales of approximately $18 billion in 2012, 68,000 employees, and 65 manufacturing, and technology research centers in the world. The company markets Whirlpool, Maytag, KitchenAid, Jenn-Air, Amana, Brastemp, Consul, Bauknecht and other major brand names to consumers in nearly every country around the world (Maytag Corporation, 2012). Competitive Advantages and Strategies Thinking ahead of...
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...Issue Statement Broadly speaking, WoodSynergy is experiencing an information need and integration problem. It must use IT to enable SCM in order to get the right information in front of the right people at the right time and through the right lens, which requires a centralization of S&D data. Doing so will facilitate WoodSynergy’s interdependent goal of meeting demand with high quality products delivered on-time. Analysis, Recommendations, Future The urgent decision to build a gateway without paying adequate attention to information integrity and timeliness is a likely predictor of future disappointments and suboptimal performance at WoodSynergy. An SCM, or any IT system for that matter, is only as good as the information that goes into it, and it was a trigger-happy decision to place standardization and real-time interfacing above information integrity and timeliness. Real-time interfacing with mediocre-quality, relatively antiquated data is not an optimal operation. While initial results seem indisputably positive with over $1.5 million in cost savings, wide spread approval among RDMs, and a significant efficiency increase in order processing time, there is no reference to an analysis of alternatives. An optimal decision would have evaluated the remediation strategy and gateway prototype against a range of other feasible options, specifically against the other mediation approaches. WoodSynergy needs to increase the speed with which it processes orders and makes...
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...Effective Teamwork A Best Practice Guide for the Construction Industry Innovation s Best Practice s Productivity Constructing Excellence is driving forward productivity improvements in the UK construction industry through a set of integrated programmes focused on delivering process, product and cultural changes. The key objectives of Constructing Excellence are to improve performance through increased productivity and competitiveness; to improve the industry’s image by changing its culture, developing its people and engaging better with communities and customers; and to engage and take action with individuals, businesses, organisations and industry associations. This guide demonstrates how teamwork can be an important tool in achieving Constructing Excellence objectives. Drawing from the management literature on teamwork, together with original research, the guide examines various aspects of setting up and managing teams, with practical examples from the construction industry and a useful team self-assessment tool. Effective Teamwork was prepared for Constructing Excellence by Eclipse Research Consultants. For details of how to contact the authors see the inside back cover of this guide. Illustrations were by Gerry Armstrong (gerry.armstrong@virgin.net). For more information about Constructing Excellence, please see: www.constructingexcellence.org.uk Or call our helpdesk on 0845 605 5556. 2 Effective Teamwork Contents Introduction ...
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...Creating Cultural Synergy: A Management Plan for a culturally diverse team Theresa Famolaro MGMT 615 Dr. Linda Smith 20 March 2012 Introduction This paper presents a problematic multicultural team scenario and a management plan to bring about the team’s effectiveness and success through cultural synergy. A summary of the conflict among team members sets the stage for an innovative solution, while a description of the emergence of multicultural teams in the workplace provides a context. Initially, an assessment of the cultural diversity of the team members is provided. Then, a plan to leverage the richness of culturally diverse team members working together is explored. Finally, in the event that the plan is unsuccessful, a backup plan is offered for consideration. Due to globalization, people from various cultures find themselves working with individuals from other cultures, often in an intercultural team environment. A team is an interdependent group of individuals brought together for innovation and the achievement of a specific goal (Northouse, 2010). Team cohesiveness is positively associated with openness of opinions and collaboration between team members. Disagreement within teams negatively affects team members from sharing points of view (Woerkom & Sanders, 2010). Multicultural teams are more likely to display less cohesion than teams with members that share the same culture. Cultural diversity...
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...A1. IDEA IN BRIEF on BCG Matrix: (Source: http://www.innovation.public.lu/en/ir-entreprise/techniques-gestion-innovation / outils-gestion-strategique) What is the BCG Matrix? | The BCG matrix, invented by the Boston Consulting Group, is a tool that allows classifying and evaluating the products and services of a business. It is a decision making tool in order to balance the activities of a company among those which make profits, those who ensure growth, those which constitute the future of the firm or those who are its heritage. With this tool one is able to define the development policy of the company. The matrix will position the products/services in two axis: * the rate of growth of the market ; * the market share of a product/service offered facing the competitors | Golden Rules | * Positioning = the company has to place each of its products/services on the matrix. Thus it is able to obtain information on the market share of the product or service and the market growth. * Creating long-term value = the company should have a product portfolio that includes products with high growth where it is necessary to inject cash and products where growth is weaker but which generate a lot of cash. | Structure of the BCG Matrix | * Question marks They do not generate profits unless the company decides to invest resources to maintain and even increase the market share (become potential stars). They have a high demand for liquidity and the company must ask the...
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...MANAGEMENT DEVELOPMENT INSTITUTE, GURGAON Post Graduate Programme in Management (Part-time) ORGANIZATIONAL BEHAVIOR Project Synopsis TEAM WORK AND SYNERGY IN ORGANIZATIONS Course Faculty: Prof. Sumita Rai Submitted by Group – 7 Rachit (43) Raman(45) Sachin (46) Sandeep Jamdagni(48) Sandeep Yadav(49) Subodh (51) Arun Kumar 1. OBJECTIVE & REASON FOR CHOOSING THE TOPIC: Our group has chosen the topic “Team work and synergy in organizations” which is quite relevant in today’s global scenario in several organizations. The reasons for choosing the topic are:- * In this globalized world, most of the multi-national corporations work on “team concept” * Inter-departmental co-operation and co-ordination are the buzzwords for success in organizations. * Team work makes our life easier. * It will help us in studying the individual behavior while working in a group. Objective of the project is to analyze the synergy and effectiveness of teams in the organizations working on new concept. 2. ‘OLD CONCEPT’ VS ‘NEW CONCEPT’ The old concept of work teams is that of problem-solving teams who could only recommend but not implement their recommendations. They usually met once a week to share and suggest ideas for process improvement. Merrill and Lynch had implemented this concept. However, in modern times cross-cultural and virtual teams have become the norm. Cross-cultural teams comprise of people of different departments of usually...
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...Team Synergy’s Top Ten Guidelines 1. Choose the right team members. Not all team leader/managers will have this opportunity, but certainly if you do, it’s probably the most critical. As Goodbody (2005) points out, you first objective is to make sure you have all of the knowledge and skills that you need within the team with the fewest number of people. The larger the group, the more complex it becomes to manage. When considering skill sets, you must not only take into account technical expertise but other skills such as organizational understanding and communication. 2. Defining goals/expectations/vision Having a mission is setting the plan, where the team members will be able to work to one goal to accomplish the task. This is the first practice a Manager must consider in order to get to be successfully. Townsend, DeMarie and Hendrickson (1998) said that virtual teams should determine the configuration of individual teams, dictate their mission, and ultimately determine the type of technical system required and the requisite skills and orientation of the team and its members. By setting expectations and goals each team member will have a clear understanding of what the goals are, and are expected of them to achieve and attain those goals. 3. Defined roles/ responsibilities Members of virtual team will be geographically isolated where the team manager will probably not be aware of the other roles and responsibilities that each member has at their respective...
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...Microsoft/Intuit Synergies There is a great deal of synergy between the Microsoft and Intuit that would be beneficial for Microsoft if an acquisition were to take place. Intuit’s position in the personal finance market would lend a considerable benefit to Microsoft given their difficulty in that market. Microsoft would also be able to take advantage of the similarity in their products and use their considerable marketing advantages to enhance the revenue created by Intuit. In 1994, Bill Gates envisioned an emerging future market as an online marketplace to handle consumer needs. In order for Microsoft to develop its capability to control its own destiny in online entertainment and commerce, it needed to acquire additional core competencies of “cable and/or telephone networks, on-line networks, electronic shopping networks, video on demand, and business networks.” Microsoft needed to evaluate what competencies would be developed in house and which would be acquired in an effort to most efficiently use its human resources and financial assets. With Gate’s vision of the future online consumer, Intuit’s product line could be a great benefit to Microsoft being able to position them as a leader in that market. In terms of market share in the personal finance/checkbook software market, Intuit had a 69% share in units and an 85% share in value. This is in comparison to a 22% and 7% share for Microsoft respectively. Bill Gate’s vision of the future relies heavily on personal financial...
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