OrganizationalChange Assignment 6
OrganizationalChange Assignment 6
Assumethat Safeway Inc. has acquired Sobeys. In your opinion, how mightthis acquisition affect the following?
The make-up of the executive teams of both companies
Firstand foremost, the make-up of the executive teams would increase.Those individuals from Safeway and those from Sobeys would cometogether, and make one executive team. Also, with the acquisition ofSobeys, the executive team of Safeway will become stronger, and moreinnovative. When different ideas are shared among the two companies,a competent executive team is born. In addition to this, it isimportant to understand that each firm has different cultures, andways in which it undertakes its duties. In the event Safeway acquiresSobeys, there may be a clash in regard to the executive teams. One ofthe managers may come up with policies, and strategies that the otherdoes not approve. Such altercations in the firms make it difficultfor them to move forward. The executive teams concentrate on theirpersonal differences, and as a result it is impossible for them toconcentrate on their work. Therefore, the solution here would be forthe two groups of executives to agree to disagree on certain matters.If this solution is put into use, the firms will be able to moveforward as a team (Stahl & Mendenhall,2005).
The geographic markets served by both firms
IfSafeway acquires Sobeys, there will be less competition in thegeographic markets. After acquisition, Safeway will have the power toinfluence the decisions made by Sobeys. The merging and acquisitionof Sobeys is vertical, and for this reason, the two companies will beable to save, and enhance the manufacturing, and distribution oftheir products. The two companies Safeway, and Sobeys are no longerrivals therefore they ensure that they work together to maximizetheir profits (Stahl& Mendenhall,2005).Once Safeway acquires Sobeys, there will be little or no competitionin the geographic markets served by both firms.
The store brands offered by both firms
Thestore brand is vital when it comes to winning or losing customers. IfSafeway acquires Sobeys, the name of the brand should not emerge fromone of the firms it should emerge from both firms. In the eventwhere the firm keeps only one firm’s name, there is a risk oflosing the customers from the other firm. Keeping one firm name onlymakes it easier for the potential customers to acquire the servicesof the competitors (Stahl & Mendenhall,2005).For this reason, Safeway and Sobeys should go out of their way toensure that they have a name that incorporates both firms.
The distribution network of both firms
IfSafeway acquires Sobeys, the distribution network will attract morecustomers. Through the two firms the prices of products will bebetter, there will be an increase in the number of suppliers, and thenumber of products sold will be on the higher end as well (Stahl& Mendenhall,2005).The network of distribution would increase as the acquisition ofSobeys improves the services given to the customers. OnceSafeway and Sobeys combine, there will be more efficiency hence thedistribution network of both firms will gradually improve.
The store locations of both firms
OnceSafeway acquires Sobeys, the locations of both firms will be directlyaffected. It is important to know prior where to locate the stores asthis greatly affects the customers. Due to the expansion, the storeswill be present in different locations as compared to when they wereindividual companies. New stores will be built, and the supply ofproducts will definitely increase. However, it is important for thesetwo firms not to shut down the branches that are adjacent to theircompetitors. Most customers will end up in the competitor’s firm incase Safeway and Sobeys move too far. The firms should ensure thatthey do not make the mistake as they may end up losing potentialcustomers. Also, the locations of these stores may influence theprices of commodities. Increasing the prices however, may risk thefirms of their customers. As a result, the best option would be tomaintain the prices of the products regardless of the location (Stahl& Mendenhall,2005).
The overall number of employees
Thereare employees from Safeway, and employees from Sobeys. For thisreason therefore, it is expected that the number of employees willincrease. However, after merging and acquisition of Sobeys, some ofemployees will have to be removed from the company. There may beabout four to five individuals from Sobeys and Safeway performing asimilar task. For this reason, some of those individuals will have tobe laid off. In such a scenario, it is those highly skilled employeesthat are given first priority (Stahl& Mendenhall,2005).It is important to realize that removal of employees does not onlyaffect the subordinate staff but, also the managerial staff.Employees in different firms are therefore advised to give their bestat all times. As a result, they will be prepared for anything that isbrought their way.
Inconclusion, the importance of this assignment is to depict theconsequences of acquiring, merging or amalgamating firms. In as muchas there are positive effects, there are a good number ofrepercussions. Before firms make the choice of coming together asone, they should ensure that they have a background on the process ofacquiring, merging, or amalgamating firms. It is important for theSafeway managerial staff to have an overview on the process ofamalgamation, acquisition, and merging before making the step ofacquiring Sobeys.
Stahl,G. K., & Mendenhall, M. E. (2005). Mergersand acquisitions: Managing culture and human resources.Stanford, Calif: Stanford Business Books.