Business
The counterintuitive case for preserving some redundancy.
March 05, 2024
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Strategic inefficiencies play a fine diagram in the success of technology acquisitions. Research though-provoking hundreds of organizations and interviews with executives reveals that certain inefficiencies in put up-merger integration (PMI) can actually propel suppose. Key inefficiencies acknowledged consist of: replicate teams the place staff from both companies work together, increasing complexity but enhancing integration; double incentives, offering additional rewards put up-merger to align goals at the cost of increased prices; and co-location, prioritizing expensive in-particular person meetings for larger communication and relationship constructing. The gaze concludes that these short-time length inefficiencies can lead to more efficient long-time length corporate suppose, challenging the traditional focal level on efficiency and redundancy sever price in corporate mergers and acquisitions.
Technology acquisitions — such as Facebook’s acquisition of WhatsApp, IBM’s acquisition of Redhat, or Broadcom’s acquisition of VMWare — are increasingly normal and are particularly powerful for propelling suppose. They account for approximately 20% of all acquisitions, wait on companies withhold an eye on nascent markets, pursue strategic renewal, gain access to recent knowledge, and advance technological capabilities.
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Christopher Bingham is the Phillip Hettleman Well-known Professor of Strategy and Entrepreneurship at the Kenan-Flagler Trade College at the University of North Carolina at Chapel Hill.
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