Assignment Name: Mergers & Acquisitions
Ye Chen 300759254
Zhuqiong Luo 300763968
Qiongye Wu 300728915
Yonglin Zhang 300759610
College Name: Centennial College
Course Name: Human Resources Strategy
Course Code: HRPD 712
Section: 101
Instructors Name: Nadira Slngh
Date Submitted: November 26, 2014
Question 1
Identify 2 organizations that tried to merge and failed
American company Chrysler and German company Daimler-Benz
Identify 2 organizations that achieved a successful merger
Exxon Corporation and Mobil Corporation
Question 2
Explain why the two organizations that your team selected failed to merge
On May 7, 1998, the two automakers, German Daimler-Benz and American Chrysler announced a merger of equals. Due to the cultural clash, internal problems of both sides and the industrial development, the merger turn out to be a failure. The reasons of its failure are listed as follows:
Cultural Clash
The chart below shows the cultural difference between the two companies in terms of their company structure, how they value their products and working atmosphere
Daimler-Benz | Chrysler | |
Company Structure | High authority; Strong hierarchy; | Team-oriented; top down management; lean staff |
How they value their products | High quality; luxurious; high price | Competitive price; attractive appearance |
Working atmosphere | Traditional; formal; rigid | Relaxed, informal, risk-taking |
These cultural factors resulted in conflicting goals and orders in different departments from the two companies (Kerbes, 2007).
Lack of trust between the employees
Employees from the two companies lack commitment to work with each other. The major reason is that the initial concept of “merger of equals” was far from reality. Many of the key executives from Chrysler were replaced by Daimler counterpart in the initial stage of the merger (Kerbes, 2007).
The industrial challenges
When the Asian automotive player Toyota entered the U.S market, the Chrysler side failed to compete with others in the industry (Kerbes, 2007).
Question 3
Explain why the two organizations your team selected achieve a successful merger?
In 1999, the two oil company, Exxon and Mobil merged together and formed THE ExxonMobil Corporation. This largest merger in history has been a great advantage to both of the companies due to its economies of scales and technological advantages used in optimal drilling and transportation.
The two companies have achieved the successful merger through:
1. Communication and corporation in terms of technology
The exchange and corporation of technologies of the two companies has helped ExxonMobil cut down the time used in discovering and extracting oil and gas. It also enabled the organization to explore resources in some areas in very hard conditions (Mohammed, 2013).
2. Vertical integration of business
Shortly after the merger, the company vertically integrated in businesses which include exploration, drilling, oil and petrochemical refining. Huge profit was generated from the vertical business integration (Mohammed, 2013).