Question

Of the problem that affect the success of an acquistion, which one do you believe is the most critical in the global economy? Why? What should firms do to make certain that they do not experience such a problem when they use an acquisition strategy?

Answer 1

The most critical problem is the cultural problem that is created by the different types of the cultures, its inherent values and beliefs to be followed by people in different organizations. As a part of acquisition strategy enterprises identify a suitable acquisition target in overseas locations. If these enterprises undermine the different cultural practices to be followed by the acquisition targets that are different to their parent organization, then it becomes a biggest challenge and a cause for the failure of the acquisition.

Firms should do the following to prevent the experience of failure and experience more success in acquisition:

1. Firms should conduct a cultural analysis of the acquisition targets and identify the factors that can be focused upon to develop the coherence between the two organizations.

2. Firms should identify the scope of behavioral and cultural training that could develop the compatibility among the workforce. It will increase the success rate of the acquisition.

3. Firms should consider the cultural symmetry and develop tolerance as a necessary part of organizational culture so that both the organization can work together to achieve the common goals