Question

1. In the context of post-merger reorganisation: Describe four types of post-merger integration. (8 marks

Answer 1

Answer: The four types of post-merger integration areas below which are based on the strategic interdependence factor and the organizational autonomy:

a. Holding strategy: In this strategy, the acquired company remains a separate entity where the need for strategic interdependence as well as the autonomy remains low.

b. Preservation strategy: This strategy is adopted to keep the acquired company as a standalone business. The autonomy of the acquired company remains high and the interdependence is low.

c. Absorption strategy: In this strategy, the companies takes the natural course of organic growth and the companies completely merge the acquired company. This strategy may bring cultural conflict and many companies have suffered. Autonomy is the lowest while interdependence is the highest.

d. Symbiosis strategy: This strategy is most complicated as the Level of autonomy is high as well as the level of interdependence is also very high. Although this is most complicated post-merger strategy if implemented successfully this becomes the most rewarding.