Question

Star Computer and a small telecommunications company are considering a merger. A socially-minded member of Star Computer's board of directors is against the merger, however, because she is concerned that the merger might not benefit society as a whole. Provide the board member with an argument for why it may be socially beneficial for the merger to take place. Write the argument in 500 or more words.

Answer 1

The merger shall be win win situation as this creates cost synergies, capacity utilisation, lower operating costs, inventory optimisation, management efficiency, diversification into new range of products and services, Inclusive leadership, elimination of redundant roles, redeployment of assets, higher free operating cash flows and lower net debt, supplier vertucal integration, reduced compliance and corporate governance, streamlined listing of shares and accessibility to broader customer base.

This helps employees of small company to benefit from better working culture and get an exposure to senior management and multiple geographical regions and build leadership pipeline. The larger company gets specialised services and ultimately leads to Oligopolistic market structure which leads to reduced competition and rise in prices and thus higher net profitability.

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