Business Report: Acquisition Analysis of Company A by Company B

This business report analyzes the acquisition of Company A by Company B, focusing on the challenges and opportunities arising from the change in leadership and operational management. The report examines key elements such as strategic fit, organizational fit, integration, and co-evolution, highlighting the impact of the shift from democratic to autocratic leadership on employee morale and productivity. It discusses the importance of the SPEAR team in analyzing internal and external factors to drive organizational improvements. The report also explores various leadership styles, including democratic, autocratic, operational, and situational, and their effects on employee resistance and overall business performance. The analysis includes models like the 360 Congruence model and the life cycle theory of leadership to assess different aspects of the acquisition process. Furthermore, the report emphasizes the need for effective workforce management, training, and development to mitigate the negative impacts of the acquisition and ensure long-term success. The report concludes with recommendations for Company B to improve its strategies and manage its workforce effectively.

Business Report

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................1
ANALYSIS......................................................................................................................................2
Key elements for management of acquisition ...........................................................................2
Challenges and opportunities in operational management and integrated leadership ...............4
Theories and models which assist in decision making and improving performance..................6
CONCLUSIONS..............................................................................................................................7
RECOMMENDATIONS.................................................................................................................8
REFERENCES..............................................................................................................................10

EXECUTIVE SUMMARY
In current scenario acquiring has become a common trend in business. Almost all part of
the world the bigger organisation is acquiring small company who are non performing or cannot
compete in business market. This will allow the bigger organisation tom expand their business to
new geographical boundaries. Same thing has happened with Company A, the company was
working smoothly for longer but changes in leadership approach and policies made difficult for
the company to sustain in competitive business. Company was following democratic style of
leadership bust after acquisition they have to follow autocratic leadership of company B. After
the acquisition lots of termination of employee has happened because many of the employee are
not able to keep pace with the working condition and leadership of company B. The way
termination is not justified in the view of employees which result decreasing morale and
prevailing of sense of uncertainty about their job.
This transformation form democratic leadership to autocratic leadership has decreased
productivity of organisation as most of their employees are leaving the company due to
uncertainty and unsatisfactory organisational culture. This change in leadership style has
disrupted activities in organisational culture e.g. change in training and development policy,
workforce management, coordination, behaviour and attitudes and unclear job roles. The
company must analyse that the above factors are also important apart from financial factors
growth oh the organisation in competitive business structure. The company must apply certain
models for analysing these areas for proper evaluation of different aspects in organisation.
Company has adopted 360 Congruence model for evaluating different internal and external
factor. Company A has made SPEAR team who are responsible for examining different elements
in internal and external environment. Their analysis includes workforce management, job role,
Employee retention, welfare , rewards and appraisals, skills and development etc. By analysing
these factors the team can can make radical changes which will aid organisation to be back on
track and be productive in market place.

To – Board of director (Company B)
From – Senior Manager
Date – 10 march, 2018
INTRODUCTION
Acquisition is a common practice when a targetted company is acquired by some another
company. The target company is a legal organisation after acquiring becomes a part of
purchasing company, it can also be termed as acquiring ones assert and resources form some
other company. The given case study has concentrated on two companies, Company A and
company B. Co A has a long history of more than 200 years in field of production of heavy
engineering. Through their long journey they have increases their roots in Asian countries like
India, China and as many as 3 location in UK. The company is known for adopting better
leadership styles and strategy in their business culture and organizational structure. Company
believe that giving a better workplace environment to employees so that they can be expressive
in their work and generate innovative ideas which can be implemented in business strategies.
The company has made a SPEAR team to look into implement flexibility in their working
environment is also used to increase ability and efficiency of their workforce and apply
innovative ideas. By implementing this team they have a huge amount of success in market place
but due uncertain events and change in leadership practice the company has seen downfall,
which is regarded as the main reason for their downfall.
Company B has a mindset expand their business in larger areas and increase their revenue
bases and shareholder in business market. After the acquisition basic function in then
organisation changes drastically (Goetsch and Davis, 2014). Firstly leadership styles changes
from democratic to autocratic style. SPEAR team has been suspended and their policies and
suggestions were being neglected. This has increased insecurity among their employees about
their jobs and their freedom has been scraped. These changes has created voluntary renunciation
and redundancy in their workforce. Company B now have full authority to take decisions in
workplace of company and make planning for quality, technology and productivity.
This report is mainly focus on rectifying and comprehend acquisition process. This report
majorly focus on four major factors: Operation, finance, technology and leadership. At the time
of acquisition major change have occurred in implementation of leadership and operational
management. This report has deeply observe the global impact of operational and management
1

and what effect they can have in future business processes. Adding to this analysis of factors like
strategic fit, integration, co- evaluation and organisational fit has also being done which will
further help to understand acquisition process. Apart from effect of acquisition on personal
attitude, behaviour, cultural changes , policies, deputes and conflicts have also being observer
and their negative impact are being discussed (Mergers and Acquisitions, 2015). At the time of
acquisition of Company A, Company B has expected that they will use the workforce effectively
for their growth and development but it backfired due to their ineffective leadership policies.
This report also focussed on doping those strategies in their business which will aid them to
manage their workforce effectively. The report must not focus on the report which may turn out
to be idealist or pragmatic. This report also stipulate certain consequences which are not
tolerable in human resource management by studying different aspect of human behaviour. This
report also focus on critically analysis of certain policies and approaches of the company B
towards their shareholder ans discuss certain changes which can be made in their approaches.
Major challenge of the organisation in to manage the business after acquiring business and make
growth strategy in business market.
ANALYSIS
Acquisition is all about combining major asserts and resources of the acquired company
with own resources. This is very common practices among large organisation to expand and start
new venture in new geographical region. This case is focussed on acquisition of company A by
by a larger enterprise working in same segment of business environment. The main reason of
acquisition by company B to increase in business activities shareholder values.
Key elements for management of acquisition
It is important for Company to consider certain elements for better observation and
proceedings. Some of the elements are given below:
Strategic fit – It is the degree at which organisation collaborate and function at which
the company deals with partner institutions. The concept and effort of strategic fit to achieve
superior in comparative business market (Zoogah, Peng and Woldu, 2015). Acquiring company
A is a part of business strategy of company B. They already have made certain plans and policies
and have adequate reason behind acquisition process. Through strategy fit organisation is
2

responsible showing equality between the acquired company and own company, hence it will
help them to have better coordination and sharing of knowledge and skills.
While calculating strategic fit they must emphasis operational and management fit for
better better better outcome of the observation. Some other factors which must be considered are
in strategy fit are common sales and strategy mix. After collaboration of company A and B is to
improve market share, increase investors ans increase in sales. But before implementation of
strategy mix they must make sure that they have observed business environment of their
organisation. After taking in account all the relevant factor management of company B can take
relevant actions related to acquiring and buying an enterprise (Lee, Hwang and Choi, 2012.
Organisational fit – This is about pointing out factors which are essential for
organisation for combining their effort at company's level. It mainly focus on the organisational
culture which has been enacted by company for their workers. It is essential for the organisations
to have better coordination between them so that they can prosper in business. The policies of
company A are much different from company B. In company A the main emphasis on
manufacturing quality products and innovation and choose transformational business culture , on
then other hand Company B is concentrated on increasing their productivity and investors. For
growing in business the organisation must make sure that they have maintained values and ethics
in market , so that they can maintain a good reputation and and brand values in the market but
company B is unable do, which effect in failure of their decision making and policies which
leads to increase in conflicts deputes in organisational culture.
Integration- It is defined as integration of resources and workforces of both the organisation. The
main aspects which are to be considered in business organisation are operations, data and
personal objectives. For initiating any acquiring process organisation must emphasis on these
factors for better analysis and planning. In personal integration the organisation make sure that
the employees must adapt new working environment as soon as possible (Lee, Hwang and Choi,
2012. For achieving this the organisation must ensure that they provide better training and
develop their skills which will aid them to enhance effectiveness in their work. But sudden
change in leadership style from democratic to autocratic did not go well as many employee face
uncertainty of their jobs.
Co-evolution- It the joint efforts of the organisation in business environment. It states
that joint and collaborative effort between the organisation to sustain better in competitive
3

market. To attained core competence in market the communication must be bi-directional. Due
to the acquisition process there it was difficult for management of Company A to adapt
working culture of organisation B. So it is duty of Company B to training employees about their
work without changing their style of management and thinking to a large extent (Fäh, 2016).
These efforts will help the organisation to have position in business market.
Challenges and opportunities in operational management and integrated leadership
The company can implement different leadership style according to need and want. A
better leadership style will aid organisation to act comprehensively in making a smooth working
of organisation , generate revenue and increase brand value in market. Some of the leadership
styles which they can adopt are democratic, autocratic, operational , situational etc. Apart from
some leadership style enterprise must also focus on motivating their employees and generate a
positive working environment. Company A has a history of producing inspirational leaders that
is why they are able to increase and establish themselves in different geographical boundaries.
The main reason for effective leadership of company A is that the leaders are able to understand
the cultural and social factors of that area and implement their strategy accordingly. The other
reason for effective of their leadership is SPEAR team who analyse different factors which can
improve effective of the organisation (Halkos and Tzeremes, 2013). They also guides the
organisation to make effective planning in their projects and set deadline accordingly. Team is
also responsible for generating and implementing innovative ideas in their business policy
which will make the task more creative and presentable. So operational leadership plays handy
role in development policy of organisation. Through SPEAR the organisation can understand and
observe performance of their employees by watching out their work on daily basis, performance,
behaviour. For better understanding of the situation company has implemented “life cycle theory
of leadership” (Omotayo, 2015). This process is not dependent on any situation instead of this
they emphasis on making strategies according to different situations. This approach will give
detailed information for analysing different elements hence it will allow them to solve a
particular situation in an effectual manner. Some factors which must be considered are as
follows.
 Resistance from employee- A leader is responsible for performing different type of
work in organisation. Different task want different type of ability and skills to be
performed in business environment enforcing the task on employee will generate
4

resistance from employees . Apart from this unethical activities and practices by a leader
will also raise deputes and conflicts in organisation (Anderson, 2016). The leader must
understand that he judge people based on their work ability only instead discrimination
between them.
 Confusion and deputes between stakeholders- Every organisation have different way
of doing work. They have their own ethics and values in doing business. The deputes
occurs due to difference in philosophy and culture. Hence certain modification in their
working culture will have a negative effect on their investors and stakeholders. For
example in acquisition of company A by company B has put an drastic effect on the
stakeholders. Many of them have sold out their shares because market share of company
is going downwards at the time of acquisition proceed that took place ( Doppelt, 2017)..
There are certain strategies which have been designed by company on how to work on
different projects and formulate and implement them on daily basic for achieving certain
objectives in their business activity. These strategies also have some challenging factors which
have been mentioned below:
 lack of leadership - when a leader make some strategy in business and it fails due to
their weak strategy or less support in their organisation also when a leaders lack ability to
manage their workforce their strategy will ultimately fail due to lack of intent in
leadership decision making.
 Lack of consensus – It is about generating consensus which increase their collaboration,
precipitation and collaboration. These factors must be addressed effectively otherwise
lack in coordination will decrease the effective of the strategy.
According to given information provided for company A, enterprise is doing trading in
both in domestic and international market so they must maintain standard of their
communication which aid them to run their business and achieve their goals (Evans, Dalkir and
Bidian, 2015). Company A is huge enterprise who maintain high quality to satisfy customers
needs and demands.
5

Theories and models which assist in decision making and improving performance
360 degree Congruence theory – This is an overall analysis of market and
implementation of innovative idea in the business. Company A was using this ideas effectively
in their business so for prospering and growing in business market. The important feature of this
model is able to analyse their progress in one graph which enhance their chances of growth and
success in business market (Jain and Moreno, 2015). This model was first developed by M L
Bushman David A Nadler providing ways of doing work.
The congruence revolves around 4 features, which are as follows:
Tasks- Company A focussed on understanding the task which are very important for
performance of the organisation. It guides about the work which is to be processed in business .
There is focus on certain factors for evaluating the the knowledge and skills which is required
for a specific task or skills, creativeness, work flow, and right approach for doing a certain work.
Company A gives ample freedom and opportunity for their employee to express themselves and
use innovative ideas in business practices
People – its all about people and their ability and understanding about their work. The
organisation must understand that what kind of people are performing of task and rate them
according to it. This criteria helps them to rank their employees accordingly. This factor is
important for the organisation as every person has different style and way of doing their work.
So the organisation must focus on choosing certain groups or individuals and assign work
accordingly (Gomes, Barnes and Mahmood, 2016). It also includes the coordination and
collaboration with other employees and colleagues which will induce sense of harmony and
make their work effective.
Organisational structure- It involves several formal structures inside. There are several
department in the Company A so they can have a better coordination between them. Before
acquiring Company A has a systematic approach in all their departments so that they can have
better coordination and collaboration between them (Renz and Herman, 2016). Company has
made certain policies and guidelines which aid them for better functioning in the organisation.
The organisation has made standardised policies, rules and regulations and provision as well as
some other factors which can generate better working condition for the employees.
Culture – It defines the working culture organisation which determine the way
employee and organizational culture. The factors which defines culture are attitude, behaviour,
6

beliefs, motivation, commitment. The management keenly monitor the way staff communicate
with each other or the way they work in coaction. The company analyse the performances of
their employee like their belief and values, leadership style, attitude and behaviour towards the
organisation. The company has understood that have different employees working in their
organisation who comes form different geographical area and culture (Matthews, 2015). The
company has worked effectively on making making resonation working culture between their
employees.
CONCLUSIONS
From the above case study it is being concluded that company A is gaining success the
field of heavy engineering but due to inadequate leadership styles and policies certain issues
have prevailed in business which has decreased their growth in market. Company A have
thought agreeing to acquisition will help them to grow in competitive market. Their thinking
was well supported by their investors and stakeholders as it will increase their value of shares in
stock market. While acquiring any organisation other company must ensure that the company is
organisational fit and strategic fit or not. In case of Company B they focussed on organisational
fit because they focus on increasing their financial base by focussing on increasing stakeholders
for their business. Since company A is already have increased their bases in many different
countries they have a good amount of stakeholders, suppliers customers , employees etc. attached
to their business. So company B taught that this is a suitable organisation which is good for their
expansion policy.
Company focus on increasing their productivity by fulfilling demand of their customers.
In traditional measure it was easy for workers to put pressure on employee and make their work
done. In company A worked listen to leaders and top level management in workplace and in
return company gives values and consideration to employee, in return employees shows more
dedication in their performance. But after acquisition by Company B the leadership style changes
to autocratic approach and formation of certain laws and policies of government has made it
difficult for employee to adopt new policies and approaches. Due to this leadership practice
some experience employee have left the organisation and many of them have been terminated.
The another main prospect of this organisation is to identify and rectify different challenges
which have prevailed in organisation. There are certain tools like 360 degree Congruence model
which aid the organisation to understand and analyse performance, working , attitude,behaviour
7

etc. of their employees. The model has majorly focussed on four major segments i.e. task,
structure,people and culture.
Company B before acquiring Company A known that company is having a better human
resource management which will largely help company B in future ventures. The company is
having a long history of exorbitance of brand value and positive responses for their product in
market. Finally from the report it is being concluded that Company B has a autocratic type of
leadership which is affecting performances of their employees. Both the company have their own
problem in their organisation. They must adopt certain measure and practices which will benefit
their collaboration for longer run. This case study is just a glimpse of merger and acquisition.
This is a huge concept which can be explored in future business environment.
RECOMMENDATIONS
During the time of acquisition and merger practices both the company have gone
thorough different changes and obstetrics. The best way of solving problems is to understand
different factors and practices which have occurred and solve them one by one. First major
problem which has occurred is that company B has marked employee of company A as
redundant, instead of this they must plan training and development program for them. The
company must understand that every workers have certain skills and ability company must focus
on using those skills in effectual way. Secondly the company must change their leadership style
of dealing with employees otherwise it will be very difficult for them to retain their employee.
Thirdly, for reduction of cost instead of terminating employees they must emphasis on adopting
situational leadership in the initial period of acquisition process. Fourthly, Instead of developing
a separate workplace for employee of company A they must mix them , this will help the the
employee to adapt their working environment quickly. Fifth factor is that organisation must
arrange some motivational seminars as speeches so that the employees gets influences by it and
they can be goal oriented. Sixth, this factor is the most important in acquisition process , the
organisation must give ample time to their managers to perform acquisition process. The
managers must ensure that they have systematic approach in acquiring business including all
legal aspect, they must make sure that there must not be any conflicts and disputes after the
completion of acquisition process. Seventh, Company A have SPEAR team who are responsible
for making plans and provide guidelines and suggestion in project management so company B
must implement that team which help in proper monitoring and strategy making.
8

Top level management of acquiring company must take responsibilities in management
of different things and sorting out problems. Company B have faith in human resource
management system of company A. So they must use that resource effectively for making their
acquisition process worth.
9