Question

which do you believe is harder to work in, a joint venture or an acquisition?

Answer 1

It is always difficult to work in an acquisition as compared to a joint venture, below are the reasons:

1. Cultural shift: After acquiring the firm, there is an adaptation which needs to be done from the acquired firm towards the culture, practices, vision, and values of the parent firm. While this is not an easy task, it might take some time for the firm to adapt fully to the new firm.

2. Costs to benefit: There are high costs associated with the firm which is buying another firm. Since the acquisition is not ready to work, there are so many changes required to be done so that the two firms can work together. The benefits will show up only when the transition is complete. This might take some time and the firm has to wait for the benefits.

3. Corporate restructuring: There is a lot of restructuring which happens in the acquired firm due to which many layoffs, promotions, the formation of new teams and other factors come into play. All this might not be welcomed by the employees. Change management also plays a very crucial role here.