A merger refers to a situation where two or more companies unite to form a single company and this kind of bonding is found among medium sized and small companies. Acquisition occurs when one company is bought by another one. These two aspects are meant to promote growth of the companies involved. This paper addresses the various mergers that took place in United States and their effects.
Let us take a look at the merger that took place in the banking industry in the year 2004 between the Bank of America corp. and FleetBoston Financial corp. In this merger the bank of America corp. acquired the ownership of FleetBoston financial corp. This means that the company that was bought existed under new ownership and as a result its identity was changed to resemble that of the bank of America corp. (Straub, 2007)
A cross check on the history of FleetBoston suggests that the bank had successfully merged with another financial institution known as BankBoston and its previous identity was fleet financial group. The history of FleetBoston indicates that this is not the last merger thats happening involving FleetBoston.
This shows that the management of this organization is determined and will do anything just to make sure they remain operational with a wider customer base. The bank of America had also entered into a merger which had seen it grow tremendously and since it was ranked third in US it had the required base to buy the FleetBoston bank.
The bank of America also had a failed merger with a stock brokerage institution known as Merrill Lynch in 2008.The merger seemed attractive on paper but on the ground it was very tough.
According to Depamphilis (2008), the bank of America lost many customers after acquiring the ownership of the stocks brokerage firm because the existing customers had personal relationships with the employees of the outgoing owners; people can not trust people who are not known to them. This loss of clients happened because the bank of America could not retain the organization culture of the outgoing Merrill.
Before an acquisition takes place there are a few things that the new owner to be should consider and they are namely (1) asset assessment, (2) historical earnings, (3) future maintainable earnings assessment, (4) comparable company and comparable transactions and (5) discounted cash flow assessment.
These factors are used to determine the cost of acquisition (Depamphilis, 2008). In this case the cost of buying FleetBoston was 47 billion. The above stated factors were important and remain like so because by acquiring the ownership of FleetBoston the bank of America was going to bear all the losses that were being incurred by the bought company and besides it had to take the unknown risks. In the final end the FleetBoston was no more because its shares were now owned by the bank of America.
Straub (2007) argues that there are various reasons for mergers and acquisitions. First, merging companies reduces the cost of operations as opposed to when the companies are being run as independent entities. This results in rise in company proceeds because there are several sellers of goods and services hence the union causes the group of companies to have an upper hand in business.
When a smaller company buys a bigger company it stands to raise its proceeds and also improve its market share. This is because the acquired company could have managed to gather many customers and hence the new owners do not need to look for new customers.
Acquisition promotes cross trading because the incoming company can sell its products and services to the existing customers of the outgoing owners. For instance if a company that deals with insurance brokerage was bought by a company that sells automobiles the customers of the insurance company can buy automobiles from the new owner of the company.
An example in Information Technology industry involves the case of Google when it purchased Like.com in August 2010 for almost $100 million with an aim of improving the IT infrastructure of Boutiques.com. Google integrates managers, websites, employees, network, and data in driving its IS strategy. With its newly implemented e-commerce site, Boutiques.com, Google seeks to widen its market base by offering customers new ways of searching and purchasing clothes and accessories (Efrati & Morrison, 2010).
According to Harwood (2006) companies that make huge proceeds can buy companies that make less or no profits in order to capitalize on their taxation which is normally subsidized. This trend was very common in the US until recently when the government implemented a policy that prohibited large companies from buying companies that are operating at a loss.
Company mergers and acquisitions usually have negative impacts on the management. This is because when a company acquires ownership it lays of some of the employees of the previous owner.
This could affect the performance of the company and thus reduce its productivity because the new management team may not follow the legacy of the previous management team. Since the remaining employees were used to the leadership strategies of the previous managers they would take much time to get used to the new leadership strategies.
When a deal involving a merger and acquisition is being closed the parties have to agree about which brand name should be used. There are several suggested options. First, the weaker brand name can be done away with and it can be replaced by the popular brand. Secondly the parties can do away with their respective brand names and develop a new brand. In some mergers the parties may opt to retain their identities and thus use them simultaneously.
Therefore, instead of relying on creating mergers, companies should find new strategies of penetrating into upcoming markets because success in business comes after a business have held on to its position after others have left. In business world the ups and downs are part of life.
References
Depamphilis, D. (2008). Mergers, Acquisitions, and other Restructuring Activities. New York: Elsevier, Academic Press.
Harwood, I.A. (2006). Confidentiality constraints within mergers and acquisitions: gaining insights through a bubble metaphor . British Journal of Management 17(4):347-359.
Straub, T. (2007). Reasons for frequent failure in mergers acquisitions: A comprehensive analysis. Wiesbaden: Deutscher Universitasverlag.
Mergers and acquisitions have important implications for the human resource (HR) department, some of which may adversely affect the smooth operations of the company and its strategic plan (Schuler & Jackson, 2001). The acquisition of Compaq by HP, for example, presented HR professionals with integration challenges as they had to develop a cultural and organizational structure that was conducive to employees from the two companies.
The HR department was also faced with difficulties in integrating HR policies, aligning compensation programs to fit employees from the two companies, dealing with cultural differences initiated by the acquisition, aligning information systems with the business strategy, and dealing with stress and feelings of anxiety among employees of the acquired firm. If not adequately addressed, these difficulties have the capacity to trigger adverse organizational and employee outcomes such as suboptimal productivity and performance, management problems, high staff turnover, and low employee morale and motivation (Schuler & Jackson, 2001).
Balancing Low-Cost Mandates with Innovation Aspirations
As a benefits manager at HP, it is important to develop and implement HR strategies that will be effective in enhancing alignment among diverse groups of employees within the company with the view to ensuring that the new entity is able to achieve its specific competitive objective. Owing to the fact that the two companies pursued different strategies to achieve their competitive advantage, it would be imperative to develop an approach that improves the companys innovation capability and lowers costs through a combination of low-cost-oriented product development, first-to-market benefits, and high product functionality (Bengtsson, Haartman, & Dabhilkar, 2009). Such an integration strategy must ensure that enough resources and personnel are committed toward ensuring that the new outfit is able to maintain its innovation-oriented, high product functionality, and fast time-to-market capabilities while keeping product development costs at a sustainable level.
Structuring Items
Communications can be structured around technology platforms that encourage employee interactions and collaboration with the view to spurring innovation, efficiency, and knowledge-sharing. Such technology platforms are not only critical to innovation by virtue of allowing many people to work together toward developing innovative solutions, but are also cheaper compared to traditional communication approaches (Ting, 2015).
Cost savings or controls can be developed around a feedforward control mechanism that provides a basis for control at the point of action and defines the centers of responsibility in a way that allows employees some leverage to experiment with innovative ideas and report their progress using the laid down procedures and standards. New design issues can be effectively handled through the use of a systems approach to product design and development, which incorporates a holistic and sustainable design approach in the domain of product design (Luthe, Kagi, & Reger, 2013). This approach is known to lower production costs and enhance the innovative capacity of employees to come up with new ideas aimed at improving product quality.
Challenges
Lastly, the challenges of mixing a low-cost strategy with an innovative strategic orientation include the inability of companies to continue with innovative practices at a lower cost, lack of adequate resources to drive the hybrid strategy, personnel issues as many innovative employees want to work for companies that allocate huge sums of money to product design and development, and misalignment in business and strategic objectives. These challenges need to be sufficiently addressed if the hybrid strategy involving low-cost and innovative approaches is to succeed in enhancing competitive gains for the company.
References
Bengtsson, L., Haartman, R.V., & Dabhilkar, M. (2009). Low-cost versus innovation: Contrasting outsourcing and integration strategy in manufacturing. Creativity and Innovation Management, 18(1), 35-47.
Luthe, T., Kagi, T., & Reger, J. (2013). A sustainable approach to sustainable technical product design: Combining life cycle assessment and virtual development in the case of skis. Journal of Industrial Ecology, 17(4), 605-617.
Schuler, R., & Jackson, S. (2001). HR issues and activities in mergers and acquisitions. European Management Journal, 19(3), 239-254.
Ting, C. (2015). Business contingency, strategy formation, and firm performance: An empirical study if Chinese apparel SMEs. Administrative Sciences, 5(2), 27-45.
Vertical integration strategy: Usha Martin Company
Vertical integration involves the amalgamation of the production chain to accommodate the different products that the company deals in line with the market-specific demands. Usha Martin Company boasts of a strong backward vertical integration in its industrial organization.
From a single location, the company controls its designing, cutting, manufacturing, distribution, and marketing process for its steel wire pipe products. The product segments such as raw material acquisition, power plant operation, and coal mining, actual production, and distribution are segmented and disfranchised within a systematic control system that monitors production progress (Bloomberg, par. 7).
Reflectively, the backward vertical integration strategy has shielded the company from market swings which create fluctuations in the supply chain, in terms of input availability and price. As opined by the chairman of Usha Martin Company, the vertical integration strategy has enabled the company to save more than one billion Indian rupees over the last five years. Besides, the company has been in a position to have full control of the quality of inputs used in manufacturing the steel wire pipes.
Since the company operates and fully owns its sub production branches, instead of franchising any production or distribution channels, it has been able to benefit from the aspect of cost competitiveness in production and final price of the products (Worthen, Tuna, and Scheck, par. 8).
The backward vertical integration process has allowed the Usha Martin Company to produce, design, sell, and distribute its products globally within a short period. This is possible due to the internalization of direct and complete control of the distribution and production process for its steel wire pipe brands. The vertical integration process at Usha Martin includes the aspect of cost, dependability, speed, quality, and flexibility in the production cycle (Bloomberg, par. 4).
Acquisition or Merger: Rio Tinto Group
Rio Tinto Group has used an acquisition strategy to expand the product line and its market. The group is the fourth largest mining company in the world. It is listed in both London Stock Exchange and Australian Securities Exchange. Profit for the year 2013 amounted to $15,184 million while the total assets amounted to $112,402 million. The main business of the group is processing minerals such as copper, coal, aluminum, and borax, among others.
Since its formation, the company had concentrated on the production of copper. The business thrived until the First World War. World War affected the relationship between the US and Europe. Therefore, the profitability of the company went down. The management had to come up with strategies of increasing the profitability of the group. One strategy adopted was acquisition (Hoyle, par. 6).
In 1970, the group made its first acquisition, which was the Rhodesian copper mines. This acquisition enabled the company to prosper. After the acquisition of Rhodesian copper mines, the group acquired U.S Borax in 1988. Other acquisitions included Kennecott Utah Copper, BP Australian Coal, NSW operations of Coal & Allied Industries (which produces coal), Nerco, Northern Limited, and Cordero Mining Company. The latest largest acquisition was Alcan Incorporation, which was in the year 2009.
This acquisition amounted to $38.1 billion. Incorporation of Alcan, a company located in Australia. It specialized in the production of aluminum. Currently, the group has over 35 subsidiaries located across the world. Also, more takeovers, acquisitions, and merger negotiations are ongoing. Through the acquisition, the company has been able to diversify its products (Hoyle, par. 4).
Works Cited
Bloomberg. Usha Martin: News and Press Releases. 2014. Web.
A corporate acquisition is a transaction involving the purchase of one company, known as the target company, by another company, known as the acquiring company (Gitman & Zutter, 2012). Acquisitions may be of two types; friendly and hostile acquisitions. A friendly acquisition is performed with the cooperation of the management while a hostile acquisition is performed against the will of the management. Acquisitions may also be classified by motive, where we have strategic and financial acquisitions.
Analysis
There are various reasons for acquisitions. The most common reason is seeking growth. The acquiring company may be seeking to expand its business or to acquire a dealership in a different line of products or services. Purchasing a going concern with a reasonable value and growth prospects would be better than starting a business from scratch. Acquisitions are also done in order to take advantage of economies of scale, a state is known as synergy.
A company may also buy another company with higher liquidity in order to raise funds. The presence of special employee skills and technology in a company could make it a potential target for acquisition. The presence of tax losses in a company may also attract a potential acquiring company that intends to gain a tax advantage (Gitman & Zutter, 2012).
The negotiation stage follows the identification of a target company and involves the determination of terms of the transaction such as purchase price and take-over process. The stage requires both parties to fully understand their objectives and aim to increase shareholder wealth. This is, unfortunately, not always the case. The acquiring company may lack a realistic valuation of the target company, simply relying on what they can afford to pay.
The presence of a counter-offer from another company could also increase the purchase price of the target company (Pearson Education, 2012). Mistakes such as over-reliance on the financial statements for due-diligence and purchasing companies simply because they are undervalued also cause acquiring companies to pay more for an acquisition than it is worth to them (Gome, 2007).
Despite both the real and perceived advantages of acquisitions, the majority of them end up decreasing shareholder value, with the greatest losers being shareholders of the acquiring company (Harshberger, 2009). In a study conducted on mergers and acquisitions in the US, Moeller, Schlingemann & Stulz (2005) observed that the acquiring firms lost twelve cents per dollar in aggregate value on their acquisitions. They attributed this loss to negative synergy between both companies.
In order to avoid the losses to shareholders arising from acquisitions, both parties must plan for and communicate on the deal and consider integration factors such as the difference between the two companies cultures (Harshberger, 2009) after the acquisition process is complete.
References
Gitman, L. J., & Zutter, C. J. (2012). Principles of Managerial Finance, 13th ed. Upper Saddle River, New Jersey: Prentice Hall.
Harshberger, M. (2009). How to create shareholder value through acquisitions. Web.
Moeller, S. B., Schlingemann, F. P., & Stulz, R. M. (2005). Wealth destruction on a massive scale? A study of acquiring-firm return in the recent merger wave. The Journal of Finance , 757-782.
The company in question, Caracal Light Ammunition (CLA), faces two serious issues that are associated with shipping and tool manufacturing. The company produces a wide range of small arms ammunition (About us, 2014). According to the survey results, that the company buys raw materials from distant suppliers. The materials often need additional precautions and conditions for shipment, which results in increased costs. The survey implemented also shows that some shipping companies refuse to deliver such freights, which forces the organization to look for other partners, which is associated with the investment of additional time and funds.
It is possible to note that the company heavily relies on organizations providing shipment services. Therefore, it is important to consider the acquisition of a shipment company that would satisfy the needs of the organization. This will decrease the costs of logistics and will ensure that the organization will provide its products to the customers promptly. It will also reduce the companys reliance on foreign companies which is important for risk reduction.
Another significant factor contributing to the increased costs is the tool manufacturing process. According to the survey, the company purchases a number of tools and details from other manufacturers, which makes it reliant on partners timely shipments, quality control and so on. However, CLA can consider acquiring a small tool manufacturer that could produce the most vital details and tools to decrease the dependence on suppliers. Such acquisitions will lead to significant financial synergies as the company will reduce costs as well as mitigate possible risks associated with the suppliers power (DePamphilis, 2015). These two target companies will help CLA implement an effective acquisition and improve its performance.
Description of the Potential Targets
It is possible to consider each of the potential targets in terms of certain theories and synergy valuation models. Thus, differential efficiency theory can be used to analyze the shipping company acquisition. The theoretical framework focuses on the benefits of both companies (Piesse, Lee, Lin & Kuo, 2013). Thus, CLA will optimize its logistics and reduce costs. At that, the target company should be small and privately owned to make the acquisition beneficial for both. Privately-owned companies are more flexible in terms of their corporate culture, standards and so on. This is beneficial for the acquisition process.
According to the survey results, CLA needs rather limited shipment services and, if the target company is big it will be unable to work to its full capacity, which will lead to slippage, redundancy, decreased profit and bankruptcy. It should also be a local company as the acquisition of an international company is associated with large turnover and significant investment that is not available in this case (Yeo, 2013). Applying the diversification hypothesis, it is important to make sure that the target company can satisfy CLAs needs in shipping particular materials. This theoretical approach focuses on the minimization of risks (Piesse et al., 2013).
As for the other target company (tool manufacturer), it is necessary to apply differential efficiency theory, which will also allow choosing the most appropriate target company. It should also be small to ensure benefits for both organizations (Piesse et al., 2013). The survey helped identify some peculiarities of the company including the fact that CLA has quite limited funds, and it cannot invest in the acquisition of a big manufacturer. Moreover, there is no need in that as a small manufacturing company can have the necessary capacity to produce the most important tools and details.
It should also be a local company that will minimize logistics costs and contribute to the development of the local market. This is also consistent with the diversification hypothesis, (Piesse et al., 2013). CLA will minimize the risks associated with partners failure to deliver the necessary details within the necessary terms. In the case of the tool manufacturing company acquisition, it is also possible to apply the information hypothesis (Piesse et al., 2013). CLA and the target company can share information, which will be beneficial for their operations. The companies may develop new strategies to optimize the production process.
Since both target companies are similar (they are both small local privately owned), it is possible to apply the net present value model to evaluate the effectiveness of both acquisitions (Fiorentino & Garzella, 2014). The companies are small local and privately-owned, which means the acquisition costs will not be too large. At that, it will result in the minimization of risks and costs, which will lead to an increase in profits of the company. Hence, the acquisition of these companies will be efficient.
Potential Synergies
It is necessary to note that the two target companies are similar and, hence, associated with similar synergies. Thus, expenses reduction is the potential synergy that will occur in both cases. CLA will be able to optimize its internal positions and develop more efficient operations (Daft, 2015). Importantly, shipping has been associated with frequent additional expenses due to the unavailability of some partners. Companys own shipping solutions reduce costs. Production of some tools instead of purchasing them from other suppliers also minimizes costs.
Processes optimization is another crucial synergy associated with the acquisition of both target companies. The logistics will be improved significantly, and the production chain will not be disrupted. First, all raw materials will be delivered timely, and all the necessary tools will be available whenever needed. The efficient production chain will allow CLA to provide more products to more customers as well as develop proper relations with partners.
The financial economy can also be a potential synergy associated with the acquisition of both target companies. As has been mentioned above, both targets are local organizations. Local businesses are often subsidized by the government. The investment into local businesses will make governmental subsidies possible for CLA. It is necessary to add that these outcomes will lead to the development of the company as they need comparatively small investment.
Furthermore, self-reliance is another crucial synergy that will arise. The company will be more flexible, and some of the needs will be satisfied without addressing suppliers. This is also associated with on-time delivery saving penalties.
Finally, one more synergy expands the boundaries of the companys benefits as the acquisition of local companies will have a favorable impact on the development of the countrys economy. The acquisition will result in the creation of jobs for local people and their empowerment. The industries and services sectors will also be affected as the new facilities will employ people who will develop their skills and knowledge.
Recommended Firm
As has been mentioned above, the target companies should be local to increase the potential synergies. Since the major facilities of CLA are located between Abu Dhabi and Dubai, this is the region where the target companies should operate. The shipping firm, Expert Future Cargo, is located in the UAE (Expert Future Cargo, 2015).
It has been acknowledged that the target companies should be small in size. The recommended firm is quite small, which means that it can satisfy the needs of CLA and will have the necessary load. The shipping firm may need certain investment as some raw materials need specific conditions when transported. At the same time, Expert Future Cargo has a significant fleet that includes vehicles with specific features (refrigerators, for example). The company can deliver freights from other countries, which is crucial as some materials are provided by companies located outside the region mentioned above. The target company will be also integrated into the delivery chain if necessary. The company is privately-owned, which will make the acquisition process easier. It will be easier to integrate the firm in terms of the culture.
Execution Plan for the Acquisition
It is possible to highlight major elements of the execution plan for the acquisition. Clearly, it is crucial to develop a detailed acquisition plan with the evaluation of its effectiveness and outcomes for both CLA and the target company. First, it is important to develop a working group that will plan and implement the acquisition process. The team will execute a comprehensive analysis of the backgrounds of the target companies and will estimate the particular benefits of the acquisition. The next stage in addressing the target company and start negotiations on the matter. It is important to highlight all the positive outcomes for the target company.
According to the survey, the entire acquisition process should be implemented within 2-3 years. This is sufficient time for the acquisition as the target company is rather small. The comparatively short acquisition period will help the companies achieve synergies quicker. During this time, the negotiation process, exit plan development, structured marketing process, purchase agreement, and the integration will be carried out. This will be possible due to the peculiarities of the target company that is small and privately-owned.
Thus, the first year will be devoted to negotiation and exit plan development. The target company will come up with tax plans and reinvestment options. It is noteworthy that the acquisition will be associated with the full sale. Structured marketing procedures will be implemented during the same year. The purchase agreement can be signed during that period as well.
The second-year will be the start of integration procedures. It is important to make sure that all the employees of the target company are aware of CLAs background, its vision and mission, its corporate culture and so on. A series of training courses should be provided to the target companies employees. It is essential to pay specific attention to standards and regulations existing at CLA. This stage may need significant investment as training as well as the introduction of some technologies used at CLA may be needed. This is especially concerned with IT. As has been mentioned above, the change of some equipment may be necessary to meet the specific needs of the company. It will be important to integrate the company effectively into the production and supply chain. Since the company is small, local and privately-owned, the acquisition process will be quite short.
As far as the synergies are concerned, they can be expected during the first years after the acquisition, while some of them can be achieved earlier. The cost reduction synergy will arise during the integration process and will be substantial during the first year after the completion of the integration process. The company will successfully mitigate various risks that tend to lead to additional costs.
The synergy associated with the process optimization will arise later as the company will have a period of integration, which can have some difficulties (development of proper communication channels, the use of software and so on). Financial synergies will be achieved after the second year after the integration completion. The company is quite small, and large financial outcomes should not be expected.
Nevertheless, such synergies as self-reliance and flexibility will be substantial and will be achieved during the first year after the integration completion. CLA will reduce its reliance on foreign suppliers, which is important for risk reduction. The company will not depend on shipping companies and their availability. The synergies associated with the development of the industry and especially local communities will arise soon after the news concerning the acquisition. The acquisition is the sign of growth and development, which will create the corresponding ideas in the society.
Local people will be assured that they will have their jobs. As has been mentioned above, the acquisition will lead to the introduction of new jobs as the target company is likely to expand as CLA will be able to invest in its development. Therefore, it is clear that the acquisition of the target company will be beneficial for all stakeholders involved since it will lead to several synergies within a comparatively short period. It is noteworthy that the acquisition will lead to the development of the company, the target firm, the community as well as the entire industry.
Reference List
About us. (2014). Web.
Daft, R. (2015). Organization theory and design. Boston, MA: Cengage Learning.
DePamphilis, D. (2015). Mergers, acquisitions, and other restructuring activities. San Diego, CA: Academic Press.
Expert Future Cargo. (2015). Web.
Fiorentino, R., & Garzella, S. (2014). The synergy valuation models: Towards the real value of mergers and acquisitions. International Research Journal of Finance and Economics, 124, 71-82.
Piesse, J., Lee, C., Lin, L., & Kuo, H. (2013). Merger and acquisition: Definitions, motives, and market responses. In C. Lee & A. Lee (Eds.). Encyclopedia of finance (pp. 411-419). New York, NY: Springer Science+Business Media.
Yeo, H. (2013). Geography of mergers and acquisitions in the container shipping industry. The Asian Journal of Shipping and Logistics, 29(3), 291-314.
Nowadays, the business world is looking for continuous expansion to generate higher revenues and enhancing the quality of the production processes. Additionally, mergers and acquisitions contribute to the strengthening of the competences and stimulation of the core competitive advantage while facing the increasing and intense competition in the world. Nonetheless, the significant differences between mergers and acquisitions tend to exist due to the different nature of the phenomenon. The takeover and acquisition imply having control of the acquired firms equity by 50 % (Piesse, Lee, Lin, & Kuo, 2013). In turn, the merger implies the creation of the new business unit (Piesse et. al, 2013).
Despite having slightly dissimilar nature, the intentions remain the same, as they remain an essential instrument to stay competitive on the market. In turn, the concept of the synergy enhancement also has to be taking into account while improving the quality of acquisitions and justifying their importance. It is commonly known that one of the goals of acquisitions is to enhance the synergies between the organizational and structural components (Damodaran, 2005). Nonetheless, it is important to take them into account due to the essentiality of the maintenance of the efficiency of the business processes and the lack of knowledge of the synergies applications in the context of mergers and acquisitions.
In this instance, the primary goal of the paper is to evaluate and describe merger and acquisition theories, synergies and valuation models to determine the sufficiency of their application in the real case scenarios. Additionally, it underlines the essentiality of acquisitions, mergers, and takeovers in the business world. Lastly, it determines their beneficial effects on the functioning of both participants of the process.
Merger & Acquisition Theories
Differential efficiency theory is the first theory, which is actively applied in management and economics to determine the nature and implication of the mergers and acquisitions in the real business world. It could be said that it clearly describes the relationship between the companies after the takeover and the possibility of the benefits for both sides. In this instance, it implies that that the acquisition of Company A of Company B is beneficial for both organizations, as Company A can enhance the efficiency of Company B while operating in the same industry (Piesse et. al, 2013). It implies that this activity is beneficial for both actors of acquisition and can be actively implemented in the context of the horizontal takeovers.
As for the inefficiency management theory, it implies that the efficiency of Firm B can be increased by other means due to the public origin of its status (Piesse et. al, 2013). This approach underlines different types of takeovers by emphasizing the conglomerate acquisitions. Nonetheless, both inefficiency management theory and differentiation efficiency are aimed at the enhancement of the effectiveness by optimization of the resource allocation, introduction of the new corporate culture, and creation of synergies between two companies. Nonetheless, these aspects have to be carefully assessed, as the adverse effects tend to exist during the implementations of the mergers and acquisitions.
Furthermore, the agency theory states that managers and shareholders of the company seek for the personal profit maximization and enhancement of financial positions of the individuals (Piesse et. al, 2013). In this case, the main challenge is the existence of the separate ownership of the different parts of the firm by diverse managers and representatives. Nonetheless, the primary solution to the agency issue is the implementation of the contractual nature of the agreements to avoid misinterpretation of the actions and fraud. Nonetheless, another solution is the takeover, as the inefficient management can be replaced. Consequently, the acquisitions, takeovers, and mergers are essential while solving managerial issues.
In turn, the free cash flow hypothesis implies that it can be one of the potential sources of funding of the takeovers due to the free nature of these financial resources. It remains evident that excess cash flow is necessary for financing various essential projects and activities (Piesse et. al, 2013). Additionally, it is apparent that it has a high correlation to the agency dilemma since the management does not tend to distribute cash flow efficiently for the sufficient financing of the projects. In the end, the constant management of the cash flow excess is an essentiality for the successful performance and creation of a coherent competitive advantage.
Market power hypothesis states that mergers and acquisitions can enhance the control of the company over a particular market area including the geographical expansion (Piesse et. al, 2013). In this case, horizontal and vertical takeovers have a tendency to exist and are explained by the desire of the companies to increase market power. It could be said that these types of activities strengthen the position on the market by establishing a coherent flow of resources in the supply chain.
Furthermore, the diversification hypothesis implies creating a distinct competitive advantage by increasing the number of activities and reducing risks (Piesse et. al, 2013). In this instance, it is clear that diversification is one of the vital elements while creating a competitive advantage and improving the companys position on the market. It could be said that the acquisition can develop the companys diversification by expanding the range of the provided services and products.
The information hypothesis implies acquiring higher volumes of information during the takeovers (Piesse et. al, 2013). It could be said that in this instance, the companies tend to learn from each other due to the availability of the information. Additionally, it presents the information about the companys values, status, and financial targets, which can be enhanced during the implementation process of acquisitions. Nonetheless, the manipulations of the share price might tend to exist due to the individual aims of the managerial authorities (Piesse et. al, 2013).
Lastly, the bankruptcy avoidance hypothesis states that the acquisitions, takeovers, and mergers contribute to the flow of the financial resources and absence of the hardships with resource allocation (Piesse et. al, 2013). It remains evident that acquisitions help avoid the possibility of bankruptcy due to the improvement of the financial position. It could be said that the companies can be proposed being acquired to improve their budgeting and performance.
In the end, all of the hypotheses, which are mentioned above underline the essentiality and justification of the differential efficiency theory. It remains evident that the action of the company A can highly improve the position of the company B due to the creation of synergies. In this instance, it will be beneficial for both parties, as their resources can be optimized and their importance can be increased on the market. Lastly, it contributes to the avoidance of risks and finding solutions to complex issues, which often take place in the business world.
Major Synergies Valuation Models
Firstly, synergy implies the generation of the additional value during the integration of the firms. It could be said that it underlines the fundamental intention of the acquisition or takeover due to the essentiality of the profit maximization. In this case, two types of synergies such as operating and financial tend to exist. It remains evident that the operating synergy implies having a high influence on the flow of operations and implementation of the economies of scale (Damodaran, 2005).
In turn, the financial synergies are generated while applying tax benefits and other financial operations for the optimization of cash flow and the creation of the cash excess (Damodaran, 2005). In the end, the synergies provide a relevant understanding of the generation of the additional value and beneficial nature of acquisitions. Additionally, they are fundamental elements of the companys success on the market.
In this instance, two major synergies valuation models such as net present value and relative valuation have a tendency to exist. Both of these approaches determine the value of the synergy but discover it from the different perceptions. Firstly, net present value is usually used for the representation of the particular features of the corporate strategy and organizational framework, and the synergy value is reflected by the level of risks of the synergy flows (Fiorentino & Garzella, 2014). It could be said that it discovers the synergies in the enhancement of the operation processes while integrating the organizations.
In turn, the net value is presented by discounted cash flow, in which the correlation between present synergy value and the deals, and discounted future earning, in which the relationship between present synergy value and the future earnings. Nonetheless, analytic and synthetic approaches tend to exist, and the synthetic scheme implies the differences in the chosen values between both firms and the combined firm. In turn, the analytic approach presents the simple correlation between the present value of the synergy and the chosen term. This approach contributes to the measurement of the synergies and coherent assessment of their implications.
In turn, relative valuation assesses the synergies by their market prices. It could be sais that it provides a relevant understanding of the value creation in the financial context. In this case, the value of the synergy is determined by comparing it to the particular constant value, which is relevant for the industry (Fiorentino & Garzella, 2014). It could be said that it contributes to the understanding of the companys position on the market about the currently acquired firm. Additionally, this valuation helps determine the interrelationship and differences between values of two firms, which are the participants of the acquisition procedure.
The relative valuation implies utilizing two models for the analysis such as multiple and comparable transaction models. This method tends to establish the constant variable, which plays the role of the mediator and contributor to the assessment of the issue between the companies. Multiple approach states the relationship of the product of synergy flows and constant common variables (Fiorentino & Garzella, 2014).
In turn, the comparable transaction model implies the measurement of the interrelationship between the product of synergy flows and the constant and common variable for the comparable transactions (Fiorentino & Garzella, 2014). In this instance, the common variable is also defined and contributes to the creation of the relevant image of the synergy valuation in the context of the assessment of the companys efficiency after the acquisition or takeover.
Nonetheless, in this case, analytic and synthetic ways of analysis are also present. It could be said that the analytic approaches were explained in the previous paragraphs. Nonetheless, the synthetic methods are more complicated, as they require a combination of the variables of two participants of the acquisition. For instance, the synthetic approach implies the measurement of the synergy value in relation to the variance of the several values of the combined firm and two independent companies (Fiorentino & Garzella, 2014). It helps to see the modifications of the value of the synergy before and after the acquisition. In the end, it could be said that the valuation models cultivate an understanding of the necessity of acquisitions and their importance while defining the significance of acquisitions.
In conclusion, the evaluation and determination of the values while having synergies in the context of the acquisitions. However, the synergy valuation models have to be implemented carefully to avoid misinterpretation in the analysis. It remains evident that major synergy valuation models have to be actively implemented, as the results are often misinterpreted and not considered in the desired context. Lastly, both synthetic and analytical models have to be taken into account, as they help evaluate the synergies of the complex mechanism, as, despite the observation from the dissimilar perspectives, they tend to present the current image of the synergy valuation coherently.
Fiorentino, R., & Garzella, S. (2014). The synergy valuation models: Towards the real value of mergers and acquisitions. International Research Journal of Finance and Economics, 124, 71-82.
Piesse, J., Lee, C., Lin, L., & Kuo, H. (2013). Merger and acquisition: Definitions, motives, and market responses. In C. Lee & A. Lee (Eds.). Encyclopedia of finance (pp. 411-419). New York, NY: Springer Science+Business Media.
This paper focuses on the peculiarities of efficient implementation of M&A. First, various measurement strategies are analyzed, and it is acknowledged that researchers come to different conclusions due to the use of different methodologies. The existing measurement methods involve stock-market-based measures, accounting-based measures, managers perceived performance strategies, expert informants assessments and divestment measures (Wang & Moini, 2012). Zollo and Meier (2008) identify two major dimensions: the level of analysis (with task level, transaction level, and firm level) and the level of time (short-, medium- and long-term levels).
The paper also addresses main execution issues such as the lack of communication, unclear and unrealistic expectations and goals, too many compromises associated with organizational structure, the absence of the strategic plan and concepts, the lack of top management commitment, the lost momentum, and the failure to address IT issues in a timely manner. The two integration imperatives (urgency and execution) are also considered.
Finally, the acquisition plan developed is enhanced in accordance with one of the metrics mentioned above. Major execution issues are analyzed. It is concluded that the new plan manages to address all the issues effectively.
Different Methods Employed to Assess the Performance
Mergers and acquisition (M&A) have been seen as effective strategies to improve companies performance. However, researchers stress that the findings concerning the effectiveness of this approach may differ due to the different measurements. Wang and Moini (2012) and Zollo and Meier (2008) identify and evaluate major methods utilized to assess M&A.
Event Studies
For instance, Wang and Moini (2012) note that event studies or the stock-market-based measures has been employed since the 1970s. This approach identifies abnormal stock price effects (if any) related to M&A as stock reflects all the changes during the following period based on the new information (Wang & Moini, 2012). There can be short- and long-term event studies. The event study is grounded on three basic assumptions. First, the stock prices change when the information concerning the event becomes available to the stakeholders (traders, investors, and so on).
Secondly, the event is not expected, but M&A can often be anticipated. Thirdly, there were no other influential factors during the window period. It is clear that these assumptions unveil certain limitations of this approach. Other disadvantages include the fact that expected instead of actual synergies are measured, it cannot be applied to private companies, it focuses on the company level. The advantages of the method include the fact that the information can be assessed publicly. More so, the approach is relatively objective, abnormal return is measured, some outside effects can be evaluated.
Accounting-Based Measures
Accounting-based studies compare accounting statements before and after M&A as it is assumed that the benefits associated with M&A will be reflected in accounting statements. According to Wang and Moini (2012), the advantages of this measurement include the focus on realized synergies, it is easier to carry out than the event study, more data can be obtained to measure the companys benefits (cash flow, productivity, sales rates, assets, profit/sale ratio, and so on). The shortcomings of this approach involve the focus on past (not present) expectations, the fact that accounting standards often change which make accounting data less relevant, the effects of other factors are included, accounting data can be manipulated, the performance of the entire organization rather than M&A effects are evaluated.
Managers Perceived Performance
This approach focuses on the executives perspectives concerning the realization of their objectives several years after M&A. Zollo and Meier (2008) note that this is not a widely used method. The advantages of this approach include the use of private data, reduction of the outside noise, the executives perceptions often affect the strategies they use, the method can be used in all types of M&A. The downsides of the managers perceived performance are as follows: it is often biased, the results can be distorted by inaccurate recollection, the original objective of M&A can affect executives perspectives.
Expert Informants Assessment
Wang and Moini (2012) identify another type of assessment. This approach is similar to the previous one, but instead of executives opinions, expert informants perspectives are utilized. Some studies focus on assessments of a security analyst, while others often employ a set of data obtained from several analysts as well as executives. The advantages and disadvantages of this method are similar to the ones mentioned above. However, it is necessary to add that another downside is the lack of information while the advantage is the ability to assess M&A on the project level.
Divestment Measure
Another approach identified is divestment measure. The method implies that the acquired company is divested after M&A. Wang and Moini (2012) note that researchers reported different data on divestment, but it is clear that from one-third to a half of the companies were divested after M&A. This approach is simple to employ as detailed data are unnecessary.
Other Measurement Paradigms
Zollo and Meier (2008) identify slightly different measurement paradigms. The researchers first put two dimensions to the fore. The first dimension is the level of analysis. They point out that researchers can measure M&A on the task level. This means that researchers analyze the effectiveness of every process included into M&A. Thus, the extent to which goals are met defines the effectiveness of the overall M&A. The transaction level implies the focus on the value generated by M&A. Zollo and Meier (2008) stress that the evaluation of goals is analyzed as they were set during the transition.
The firm level is the dimension that concentrates on the performance of the company before, during and after M&A. Zollo and Meier (2008) add that this is the most common approach. The second dimension is the time horizon (Zollo & Meier, 2008, p. 58). In this dimension, three measurement types exist. These are short-, medium- and long-term measures. Short-term metrics cover one or two years after the completion of M&A. It is quite difficult to draw particular boundaries for the other two types (Zollo & Meier, 2008). The researchers also try to use major levels to obtain empirical data and find that the paradigm is rather effective but still needs to be improved.
Major Execution Problems
Arthur, MacDonald and Herd (2003) explore main problems that can undermine the effectiveness of M&A. Different management styles employed by the merging companies (or the acquirer and the target firm) also cause many problems and may affects the entire process negatively. One of these negative factors is the inability to employ strategic leadership. Some companies fail to develop the strategic vision and see M&A as an operational issue handled by particular groups. There should be a strong leader committed to implement the process within the set timeframe and goals set. Arthur et al. (2003) also stress that the leader should be able to articulate the goals as well as methods that will be utilized. Otherwise, other stakeholders will feel lost or uninterested. Of course, the agenda articulated should be complete realized. It is also important to take into account possible legal issues that can affect the process of M&A.
Another crucial aspect to consider is communication, which has to be effective with all the stakeholders. Proper communicative patterns should be utilized to make employees engaged. The leader should make sure that the employees understand the need for M&A, the peculiarities of the process as well as possible negative conditions. It is essential to monitor key staff losses, and try to prevent them. It is vital for the acquirer as well as the target company which will operate more efficiently if committed and experienced people continue working. Proper communication strategy is also central to the development of relationships with customers. Customer retention should be one of the major priorities. They should also understand the benefits of M&A, and they should be ready to or, at least, informed about possible impairments in work (fewer services during a particular period).
Ironically, culture can be a significant obstacle as the clash of organizational cultures is likely to disrupt the M&A process. The inability to focus on quick gains and prompt results makes M&A inefficient as the majority of M&A projects are effective if they are completed within a year or two. Some companies are overly ambitious as they try to acquire companies although other acquisitions are not accomplished (Arthur et al., 2003, p. 43). They lose the focus on proper execution of M&A, which leads to failure.
Two M&A Integration Imperatives
According to Arthur et al. (2003), urgency and execution are two main integration imperatives. As for the first imperative, it has a number of dimensions. First, the process should be implemented within a short period (one to two years) or it is likely to fail. If a company decides to merger with or acquire a firm, it should be done at once. The focus on short-term wins is beneficial for this process. The sense of urgency is another dimension. The leader should create the sense of urgency for the change. The leader should inform all the stakeholders involved about the benefits of M&A. Arthur et al. (2003) stress that the leader should mention some problems that may arise, which will make other stakeholders more focused, committed and engaged.
The other imperative is execution. The researchers emphasize that the vast majority of failed M&A became a result of inefficient execution. M&A requires strong leadership that has a particular strategic vision. Strategic leadership is associated with the development of manageable goals and terms. It is also imperative to follow the plan developed. The leader should be ready to address the following problems: improper communication, unrealistic/unclear synergy expectations, too many compromises associated with the organizational structure, a missing major plan, missing momentum, the lack of top management commitment, unclear strategic concept, IT issues addressed in an untimely manner (Arthur et al., 2003).
Another important aspect is proper articulation of the plan. The leader should provide major details to all the stakeholders. Employees should be motivated and committed, which can be achieved through the provision of all the necessary data on the benefits of M&A as well as associated risks. There can be no room for uncertainty as it tends to lead to staff turnover. Arthur et al. (2003) also add that customer should be aware of the peculiarities of M&A. Benefits as well as risks should be voiced.
Enhanced Execution Plan
The execution plan developed earlier can be enhanced with the use of a modified metrics offered by Zollo and Meier (2008). The researcher developed a measurement metrics that included seven major components: integration process performance, employee retention, customer retention, overall acquisition performance, accounting performance, financial performance, short-term event study measures. However, it can be beneficial to change the last component to urgency. These seven components will help evaluate the effectiveness of the suggested plan (see fig. 1). Notably, the measurement will involve expected synergies.
The initial M&A process included the initial stage of planning, which is the development of a detailed strategic plan. This critical stage affects the overall efficiency of M&A (Arthur et al., 2003). The development of the working group should still imply the existence of the strong leadership. Estimation of the potential synergies should be accompanied by the analysis of possible risks. These data should be available to all the stakeholders (employees as well as customers of both firms). Addressing the target company should be implemented in terms of these changes. The leader should also create the sense of urgency through articulation of major aspects to the stakeholders.
The leader should pay specific attention to opinions of employees (especially the key staff) and customers. Employees should understand that acquisition will not lead to redundancy. On the contrary, it can result in certain growth as the target company will have to provide additional services (associated with the delivery of specific materials). The target firms employees should also understand that they will obtain training in such spheres as communication, IT, project management and so on, which will be a part of the merger (Lasher, 2016).
Thus, they will be able to develop additional skills. The target company is a comparatively small local firm but it has loyal customers who should also understand that they will be able to obtain high-quality services in the future. As for the communication with customers, these stakeholders should be aware of the goals, benefits and possible impairments in the provision of some services. The should be informed about possible delays that can arise in the course of integration (IT issues and so on).
Importantly, the overall process should be reduced to one year or 18 months. This is the period when the company can realize main synergies (Arthur et al., 2003). During this period, the following phases should take place: business plan, acquisition plan, search, screen, first contact, negotiation, integration plan, closing, integration and evaluation (DePamphilis, 2015).
Initially, a lot of effort was planned to be invested in the staff training. This is an important and beneficial measure. It will make the employees aware of the changes (benefits as well as potential risks). It will also be instrumental in avoiding the clash of cultures. The target company is rather small but it has an organizational culture (About us, 2014). The cultures of the two companies are quite similar and due to the size of the target company as well as similarity of values the clash of cultures can be avoided.
It is possible to assess the efficiency of this project using the mangers perceived performance measurement. There can be certain bias but it can be reduced through the analysis of such objective components as the companys revenues and so on. As has been mentioned above, a seven-component measurement can be employed (see fig. 1). As seen from the graph, the project is expected to be efficient. The most challenging areas will be the financial and accounting performance as they acquirer does not expect dramatic changes in the financial and accounting performance as the target company will cover only a part of operations. The project will add flexibility to the company but will not cover all the supply chain issues. However, the goals set are consistent with these expectations.
Such components as urgency, employee retention, and customer retention will be the most successfully implemented due to effective communication and strong leadership. The leader will create the sense of urgency and will explain benefits as well as possible downsides of the project. This will make the stakeholders more positive about the project and more committed.
Figure 1. Efficiency of the project.
The New Plan and Execution Issues
According to Arthur et al. (2003), insufficient communication is one of the most crucial execution issues. The new plan addresses the issue quite effectively. The leader articulates the objectives, expected benefits as well as potential risks to the stakeholders. Specific attention is paid to key staff and customers who will be aware of the changes. Of course, the information concerning the acquisition will also be provided to the acquirers employees who will be ready to develop proper communication channels with the target firms personnel. The issue of the lost momentum is effectively avoided as the project is implemented within a short period (12 months), and leader manages to create the sense of urgency.
The issues concerning unrealistic or unclear goals is also met. First, the goals are quite clear as the acquirer sees the acquisition as a way to improve its flexibility associated with the supply chain management. The expectations are also rather realistic. The acquisition is not expected to affect the performance of the acquirer dramatically but will lead to such synergies as reduced costs, better image and so on. The target company also expects to realize such synergies as the investment (manifested in training, possible staff growth and technological upgrade) as well as improved image as it will become a part of the big local enterprise.
The issue concerning the organizational structure is unlikely to occur due to the size of the acquirer and the target firm. More so, there is no need in reorganizing the target company as it will operate as a provider of particular services rather than a specific part of the company. The issue related to the absence of the master plan is avoided through the use of a detailed strategic plan that addresses all the stages of the project. This plan also helps the company to have a clear strategic concept. Finally, the issues associated with the sphere of IT are also addressed as the integration process involves training, upgrade of the necessary hardware and software.
References
About us. (2014). Web.
Arthur, B., MacDonald, T., & Herd, T. (2003). Two merger integration imperatives: Urgency and execution. Strategy and Leadership, 31(3), 42-49.
DePamphilis, D. (2015). Mergers, acquisitions, and other restructuring activities. San Diego, CA: Academic Press.
The process of acquisition is associated with some complexities, and the primary goal of this paper is to develop action plans that can be used as responses to two situations. The first case scenario focuses on the fact that rumors in organizations spread information about no possibility of a takeover in the recent future while leading to a high degree of absenteeism and low levels of productivity. In this instance, the executive of the company has to organize a meeting to discuss this problem, conduct risk assessment, and propose changes concerning the mission statement and the function of HRM.
Highlighting the significance of integrity, innovation, productivity, and transparency in the companys values will guide the HR department and help organize interesting corporate events and present rewards for outstanding performance.
As for the second situation, the employees of two companies are not eager to collaborate due to the lack of managerial initiative and substantial differences in corporate cultures. A combination of these factors also results in a low level of productivity and a lack of motivation. Apart from the need to develop the Acquisition Committee, give more power to the HR department, and monitor progress, it is vital to inform the employees, conduct a SWOT analysis of business cultures, and utilize these findings to ensure the integrity of the companies and design an effective organizational structure.
Subsequently, it is rational to use the structure of the acquiring company and introduce separate units responsible for strategy and different types of the audit while adapting a leadership style of the enterprise with the governmental structure will help reach a balance. In the end, despite the differences in these situations, they help understand that transparency and constant communication with the employees have to be prioritized during the process of acquisition, as they are the major definers of corporate success and superior financial performance.
Introduction
Today, many companies consider takeovers as one of the instruments for expansion and sources of innovative growth (Bena & Li, 2014). For example, one of the benefits is a well-balanced expenditure on R&D and patent development (Bena & Li, 2014). Nonetheless, they are also associated with a plethora of challenges and difficulties. In this instance, apart from the inability to calculate a sufficient value of takeover leading to under or overpayment, the most common problems include the lack of competences of executives during the implementation process, insufficient integration, drastic differences in organizational cultures and structures, and loss of market share (Singh, 2012).
Based on the factors and trends reflected above, it could be stated that the management of the acquiring companies has to design an effective action plan to take advantage of the described benefits and diminish the effect of negative consequences.
Consequently, the primary goal of this paper is to design effective action plans that will have a favorable impact on the disruptive implementation of a merger. In this instance, hypothetical situations are simulated, and detailed aspects of contingency plans are provided to ensure the sufficient flow of the decision-making process while avoiding failures of a takeover. In the end, the conclusions are drawn to summarize the main findings of the paper to understand the rationale for the described enterprise-wide actions of a top executive.
Response to Situation 1
Summary
To begin with, it is essential to provide a general overview of the situation. In the first case scenario, noise and rumors could be considered as the main sources of dissonance in the organization. Meanwhile, its major outcomes could be described as a continuously escalating degree of absenteeism, loss of productivity, and absence of motivation. It remains apparent that a combination of these factors hurts the quality of the products provided to the final consumers while adversely affecting the financial stability and performance of the enterprise. Consequently, resolving it and avoiding similar cases in the future could be discovered of paramount importance.
Action Plan
Situation 1 implies that the core of the problem is a high level of uncertainty among the employees about the actual implementation of the acquisition or takeover. In this case, the main phases will cover discussion and evaluation of issues and risks, analysis of challenges and opportunities, contingency planning, implementing changes concerning integrity and mission, growing importance of Human Resource Management (HRM), and monitoring changes of the proposed actions with the help of KPIs (Key Performance Indicators) and KPIs (Key Financial Indicators). The subsequent sections will describe each phase in detail and provide logical reasoning for the suggested actions.
Step 1: Organizing managerial meeting about issues
Initially, it has to be mentioned that the Acquisition or Change Committee was designed previously while covering the representatives of different departments to support the understanding of the problem from different angles. Apart from that, it is vital to include shareholders in the process. The primary reason for this matter is the fact that any changes in the value of the company or modifications in assets have a direct impact on their financial wealth and effectiveness as decision-makers (Li, 2015).
They play a pivotal role in stimulating the companys growth and innovation and can be considered as vital actors of the Acquisition Committee. Consequently, discovering them as critical participants of the meeting is of paramount importance since, otherwise, the solution may not cover their viewpoint.
After gathering all important members of the decision-making team, a series of meetings will be organized, as they have to cover a plethora of questions such as employees attitude, motivation and levels of absenteeism, and implementation of changes associated with the acquisition. Due to the need to resolve these problems rapidly, the meetings will be organized once a week, and each session will cover one of the themes described above. Using this strategy and simultaneous brainstorming of different corporate players will assist in resolving the issues indicated above promptly while reviewing the situation from dissimilar angles.
Step 2: Risk assessment and development of an action plan
Another step implies that it is vital to review the beneficial features of risk evaluation during the process of acquisition. The critical impact of this method cannot be underestimated, as it can help discover dissimilar situations that may incur during the implementation and cultivation of organizational changes. At the same time, it is one of the essential tools to assess different internal and external threats, and, in this case, reviewing opportunities of the labor market, working environment, and atmosphere in the organization is critical.
Understanding the essentiality of these features can help resolve different types of conflicts while increasing the productivity and efficiency of various departments. The overall process of the risk assessment will be rather simple, as it will include gathering information about risks (internal and external), assessing potential and existent case scenarios, and proposing diverse solutions to boost organizational productivity.
The outcomes of the previous discussion of the current issues and risk assessment can be regarded as a basis for constructing an effective action plan that will increase the effectiveness of the acquisition. It remains apparent that a combination of these evaluations underlines that the core of the problem that lies within the mission statement has to be discovered in detail, as this aspect forms a profound image of an actual situation in the organization (see Step 3). The following phases imply modifying the involvement of HRM in the decision-making process, but the detailed action plan will be provided in the subsequent sections (see Step 3). Nonetheless, generally speaking, the main steps will include
Proposing changes to mission statement based on risk assessment;
Discussing the role of HRM within an entirely new framework;
Introducing and implementing changes related to mission statement;
Actions of the HRM department;
Using different qualitative and quantitative measures to evaluate progress.
Step 3: Introducing changes to the mission statement and increasing the involvement of HRM
As a consequence of Step 2, the next step will include two major modifications that are redesigning the mission statement and increasing the importance of HRM in the implementation process. Speaking of internal value proposition, it has to expand its features and, apart from productivity and integrity, foster the growth of transparency and innovation (see Figure 1). Innovation, a higher level of integrity, and escalating production capacity are common benefits associated with the acquisition (Bena & Li, 2014).
Meanwhile, transparency and disclosure have to be viewed as vital components of new corporate culture, as they will improve the overall effectiveness and accountability of the leadership framework and support the sufficient integration of companies while avoiding conflicts (Fung, 2014). In the case of Situation 1, focusing on these matters will be beneficial since these principles will be used to develop goals and objectives for different levels of subordination and be addressed in HRM actions such as rewards and recognition (Step 4).
Figure 1. Revised mission statement.
Another aspect of this step will focus on the growing role of HRM in the decision-making and coordination processes. A plethora of studies conducted in the past claims that successful integration is highly dependent on the actions of the HR manager (Correia, Cuhna, & Scholten, 2013). For example, HRMs centrality has an advantageous impact on the organizational performance while contributing to the effective integration of policies and values of the acquired and acquiring companies (Correia et al., 2013).
Consequently, the involvement of HRM has to be increased substantially, and it has to take an active part in the development of mission statements, KPIs (Step 5), and communication with the employees. Its major activities will be described in the subsequent section in detail.
Step 4: HRM and other actions
As was stated earlier, one cannot underrate the critical importance of HRM, as the management of this department plays the role of the mediator between the executives of the company and employees. In the first place, the HR entity has to focus on motivating the workforce, as it is one of the main functions of HR and problems in the case organization. Motivation is often associated with training, professional growth, and recognition for outstanding performance and commitment (John Wiley & Sons, 2015).
Meanwhile, Figure 2 portrays that a combination of the factors indicated above is a vital part of the maintenance phase of the employment cycle (John Wiley & Sons, 2015). At the same time, Figure 2 displays that aspects such as induction have to be viewed as significant as other matters since the employees have to be successfully integrated into an entirely new corporate structure and environment (John Wiley & Sons, 2015).
It could be stated that diminishing absenteeism is also linked to the matter of commitment and inspiration, as its degree can be decreased with the help of either stimulating employee motivation or introducing an influential mechanism of sanctions and punishments. In this case, a detailed action plan covering the matters concerning employee motivation will be mentioned below in detail.
Unfortunately, apart from direct interactions with the workforce, and the HR function is more complex during the process of acquisition, as it pertains not only to informing and motivating the employees but also reorganizing the flow of information in the organization along with allocating human resources effectively. The previous sections present the actions that have to be taken from the theoretical perspective while the practical action plan will be described below. It will cover the following steps:
Participation of the HR department in the meetings during Step 1;
Evaluating structural changes that have to be made and proposing a strategy to allocate resources sufficiently;
Using acquired information to design relevant solutions and propose a detailed action plan for HR department;
Discussing the changes with the Acquisition Committee;
Along with the phases mentioned above, informing employees about the process of acquisition by organizing meetings once or twice in two weeks;
After the approval of the Acquisition Committee, starting allocating the resources and organizing training sessions;
Using employee satisfaction survey and interviews to evaluate their attitudes based on their performance and responses;
Assessing the results and introducing the most appropriate goals, performance appraisal system, motivation strategies (such as pay per hour), rewards for outstanding performance, and development programs;
Introducing different corporate events to restore organizational spirit (see Figure 3).
Figure 3. Corporate events.
Step 5: Monitoring changes in employee attitudes
Lastly, to control any progress in a positive direction related to the introduced HRM practices, it is vital to develop different types of KPIs, KPIs, and other qualitative and quantitative instruments. In the context of the presented situation, they have to cover modifications in employee attitudes, motivation, and productivity. In the context of this paper, they may refer to
Quantitative measures
KPIs (Quick ratio, ROI, ROE, and Gross Profit Margin)
Employee productivity (Actual Revenue/Expected Revenue, Manufactured Products per Person/Expected Goals)
Notes during meetings with the Acquisition Committee.
Using a combination of these measures will have a beneficial impact on understanding the companys performance quarterly. This complicated set of measures is a necessity since any changes in employee motivation have a direct impact on sales, performance, and financial productivity of the enterprise. Lastly, applying qualitative and quantitative information and statistics instruments will provide deep insights into the topic and help redesign the strategy if any negative or positive changes incur.
Response to Situation 2
Summary
On the contrary to the first situation, the employees are aware of the acquisition, but they do not actively support this idea of integration since it implies an organizational restructuring of the companies. It could be assumed that the major trigger of this situation is the lack of initiative of top management in merging diverse departments due to the entirely different corporate cultures of business entities, as one supports entrepreneurial spirit while another one is governmental. It is vital to resolve this situation promptly, as it hurts the productivity and size of the market share.
Action Plan
To diminish the consequences indicated above, it is vital to address the issues from dissimilar angles and viewpoints of various stakeholder groups. In this instance, it has to cover the creation of the Acquisition Committee, development of the action plan, informing the employees, implementation of structural changes, resolving issues with the workforce, ensuring the integrity of different business cultures, and continuous monitoring of various stages. Each phase will be described briefly while introducing a universal framework that can be used in similar situations.
Step 1: Development/Expansion of the Acquisition Committee
It could be assumed that the Acquisition Committee responsible for the implementation of change was previously developed. Thus, in this case, it is vital to ensure that the representatives of different departments are included in the decision-making team. Figure 4 provides the assumed structure of the company that is interested and responsible for acquisition or takeover. In this case, as it was indicated in the solution to the previous case, shareholders tended to play a critical role in the decision-making process, and including representatives of this stakeholder group was vital (Li, 2015).
Simultaneously, due to the complexity of the acquisition process, it is critical to consider the managers of different business units and departments, as the expected changes will affect the entire structure. Consequently, the main members will include the CEO (Chief Executive Officer), CFO (Chief Financial Officer), COO (Chief Operating Officer), and Heads of Manufacturing, Marketing, and Project Management.
Figure 4. Assumed organizational structure of the acquiring company.
Step 2: Actions of the Acquisition Committee
After the establishment of the Acquisition Committee, it will be essential to organize several meetings to determine the overall flow of the acquisition process and suggest the most relevant restructuring approach while considering the differences of business cultures. The need to modify the companys structure is often discovered as a positive sign, as it implies the companys growth, innovation, and development (Ramdas & Kumar, 2014).
In the context of the presented situation, this process will be more complicated than usual, as integrated companies have entirely different corporate cultures. Nonetheless, any organization has to start with redesigning mission statements and corporate values to comply with a completely new perspective of doing business. All actions mentioned above have to be applied in practice after discussing with shareholders, as they are discovered as the companys investors.
The theoretical information provided above can be used to develop a detailed action plan that the Acquisition Committee has to follow in the context of this case. In this instance, the main steps will include
Comparing business cultures of the companies (see Step 6);
Evaluating the current companys organization and a mission statement (the framework of the mission statement from Situation 1 can also be applied in this case);
Organizing a meeting with Shareholders about the changes (structure and leadership style);
Informing employees;
Implementing changes concerning mission statement and structure including appropriate monitoring tools;
Introducing different supporting activities of the HR department;
Measuring progress with the help of KPIs and other instruments.
Step 3: Informing the employees about the implementation of the merger
Step 2 displays that despite evaluating the companys performance and implementing changes, it is vital to have meetings with the employees concerning the actual process of acquisition. Many scholars refer to the fact that this step is important since it defines the ability of the enterprise to cultivate change successfully and ensure the successful integration of the organizations (Kansal & Chandani, 2014).
In this instance, the employees become highly adaptive and responsive to system dynamics, and this matter allows the acquiring organization to introduce sufficient monitoring and control mechanisms that comply with changes (Kansal & Chandani, 2014). Figure 5 presents a framework that can be used to inform the workforce. Utilizing this strategy will help the workers understand that the takeover is in progress, and the company considers them as valuable resources by informing them about the changes weekly and quarterly.
Figure 5. Informing employees: Framework.
Step 4: Implementing structural changes
Apart from introducing changes related to the mission statement (the framework of the mission statement from Situation 1 can also be used in Situation 2), it is vital to propose organizational modifications, as they will be necessary during this process due to escalating corporate needs and continuous development (Kansal & Chandani, 2014). For example, along with the increasing importance of HRM and integrity, it will be essential to introduce separate internal and external audit departments and the unit responsible for strategy (see Figure 6).
Establishing a distinct auditing department will assist in continuously assessing and monitoring the needs of the acquired company. It will become an essential part of the Acquisition Committee since it will help suggest valuable modifications to the existent corporate culture and strategy.
As for Strategy, this unit is essential since having a separate department responsible for business strategy and corporate culture will decrease the levels of pressure put on executives and contribute to well-balanced and weighted decisions leading to a high return on investment. Nonetheless, before implementing these changes, the company has to evaluate the cost-effectiveness of these alterations and distribute financial resources effectively according to the needs of the departments.
Figure 6. Redesigned organizational framework.
It remains evident that the overall concept of Figure 6 is entirely copied from Figure 4, and this fact implies that it will be rational and cost-effective to adjust the entrepreneurial way of organizing the business. Nonetheless, to ensure the cultural integrity of both organizations, some events and techniques can be borrowed from the governmental approach. At the same time, it is vital to underline the importance of the employees and explain the need for changes and the significance of their contribution, but these actions will be presented in detail in Step 5. The overall process of Step 4 can be summarized as:
Discussing the proposed changes and evaluating financial capacity with the Acquisition Committee;
Informing employees and explaining the need for changes (see Step 3 and Step 5);
Implementing changes including the modifications of leadership style.
Step 5: Actions of HRM
This phase will focus on describing the actions of HRM, and it could be said that due to the similarities of Situation 2 with the first one, the majority of the approaches indicated in Situation 1: Step 4 can be implemented in this case. Nonetheless, some matters will be added, and they will include designing different collaborative events and team-building activities since these elements will contribute to the effective integration of two completely different business cultures. In this case, the main steps can be summarized as
Informing employees about the process, the changes, and their allocation (Step 3);
Providing the required training and allocating the employees;
Introducing award and recognition systems based on changes;
Organizing different team building events and training sessions to ensure the understanding of a new mission statement, goals, and integrity (see Step 6).
Step 6: Integration of diverse business cultures
The described case scenario mentions that one of the critical problems is the necessity to combine different business approaches, as one of the companies relies on entrepreneurial business style while another one emphasizes the significance of its functioning as a governmental entity. In this case, these matters have to be clearly described in the mission statement of the company and underline the paramount importance of shared values, initiatives, and goals. This process is complex, and it will include an extended range of steps, and they are
Addressing the importance of culture in Step 1;
Collecting reports about the corporate cultures of acquiring and acquired companies by consulting HRM departments (Deloitte, 2009);
Discussing critical challenges with specific cases that may incur in both firms;
Conducting a SWOT analysis of both cultures and using this evaluation to design an entirely new model that will address the needs of both entities;
Assessing the decision-making style of each company and its reference to culture;
Creating equal employment opportunities for both acquiring and acquired companies while focusing on the creation of internal brand (organizing different corporate events such as lunches, parties, and sports venues) (Deloitte, 2009);
Ensuring that organizational environment, leadership, and teams support cultural change and development.
Step 7: Continuous monitoring and control
The last phase implies using different KPIs and measurements that address the productivity of the employees, their motivation and satisfaction, and financial performance. The evaluation has to be conducted monthly during the process of merger. The measures may include
Finance (ROE, ROA, ROI, and Gross Profit Margin);
Motivation and satisfaction (Likert-scale to measure job satisfaction and absenteeism);
Productivity (Actual Revenue/Expected Revenue and Costs/Designed Budget).
Overall, it could be said that the introduced KPIs have to be applied simultaneously, as they provide a multi-faceted image of the organizational performance. At the same time, using them as a combination is a necessity due to the interdependence of these elements and their mutual impact on financial productivity. Applying them effectively can enhance organizational performance and support successful change implementation while controlling the stages stated above.
Conclusion
Overall, the situations mentioned above are the most common ones in the context of mergers and acquisitions. Both of them cover the issues of integration that majorly focus on the lack of the desire of the employees to adapt and accept changes leading to smooth and slow implementation. Due to this matter, action plans tend to have some similarities. For example, both of them underline the significance of HRM and its connection with the success of the acquisition and emphasize the need to expand the coverage of its activities. At the same time, Situation 1 and 2 clearly state that the company should not underestimate the importance of its employees and cherish transparency of the acquisition process.
Nonetheless, apart from the similarities, Situation 2 tends to be more complicated, and when resolving it, the company has to focus on differences in corporate cultures and introduce structural changes. It will be rational to maintain the original organization of the acquiring enterprise while adding Audit and Strategy and using some concepts of the leadership style of the acquired firm. This matter will help reach the successful integration of the business cultures and support financial prosperity.
References
Bena, J., & Li, K. (2014). Corporate innovations and mergers and acquisitions. The Journal of Finance, 69(5), 1923-1960.
Correia, M., Cuhna, R., & Scholten, M. (2013). Impact of M&A on organizational performance: The moderating role of HRM centrality. European Management Journal, 31(1), 323-332.
Kansal, S., & Chandani, A. (2014). Effective management of change during merger and acquisition. Procedia: Economics and Finance, 11(1), 208-217.
Li, T. (2015). A study of the impact of mergers & acquisitions on shareholders wealth and efficiency. SHS Web of Conferences, 25(1), 1-5.
Ramdas, R., & Kumar, J. (2014). Effect of corporate restructuring on shareholders value in the information technology sector. International Review of Research in Emerging Markets and the Global Economy: An Online International Monthly Journal, 1(1), 33-40.
Singh, P. (2012). Mergers and acquisitions: Some issues & trends. International Journal in Innovations in Engineering and Technology, 1(1), 1-9.
Effect of Mergers and Acquisitions on Environmental, Social, Governance Performance and Market value
The importance of the article is that it will give insight into the effect of acquisitions and mergers on the performance of the environment, society, and governance. It dictates that investors should pay attention to the ESG performance because the higher the ESG performance increases the market value of the ESG. To enhance corporate values, ESG performance can be improved by firms when the M&As strategy is used. The empirical analysis shows that the performance of the ESG mainly increases in the post-merger stage. However, the article explains that the value of a post-merger market of the acquirer increases in case of an increase in the performance of a post-merger.
In recent years, there has been an increase in the evolution of the SRI market, thereby increasing the need to develop metrics that many investors widely accept. In RSI, the metrics are important because they help in measuring performance sustainability. Research shows that many investors value a firm according to its ESG report, resulting in more returns in the stock market. Therefore, companies that publish ESG reports have higher stock returns than those that do not.
The Effect of Market Valuation on Mergers
This article will summarize and evaluate whether market valuation affects mergers. The data in the report portrays that a union has a relationship with how the market is valued. Almost all the firms have a market value that is higher or lower than the actual value of the respective firm. The private information of the target or bidders firm can tell them whether a market is over or undervalued but cannot find the reason for the under or over valuation. However, sometimes the target may use all the information they have to evaluate the market value correctly to spot all the misevaluations. Merger waves, therefore, occur when high synergies are accessed by the target, especially when the market is misevaluated.
From the statistics, its evident that there is an increase in merger activities when the market is overvalued. For example, between the years one thousand nine hundred and sixty-three and the years one thousand nine hundred and sixty-four, there was an increase in merger activity because the market was overvalued during this period. There is a big difference between mergers involving securities and cash takeovers because of the valuation problem in mergers. Sometimes, the valuation process becomes problematic till the court is used as a mediator to ensure that only the highest bid is accepted.
However, this problem can be approached differently because all the parties involved have private information on the other party and slight details on the market structure and condition. When overvalued, a target expects that the cause of the overvaluation is partly because of the market structure and the firm itself.
Reasons why Firms Merge then Divest
The article pays close attention to why firms merge then later divest. The concept talked about in this article applies to financially stable companies and those experiencing financial difficulties. Lack of proper financing prevents companies that are economically unstable from executing profitable projects. As a result, these companies have a high chance of participating in conglomerate mergers to help them get the funding to engage in promising projects. This conglomerate merging will stabilize the financially distressed firm, thereby excluding the union to avoid coordination costs. The disadvantage of this method is that managers of companies with financial stability will be more willing to participate in the coalition than managers of small companies even though they will not get many profits from the merge.
Diversified firms can have an extensive range of loan amounts that they can borrow from banks, thereby making them escape the tax associated with the deduction of interests. When two companies are combined, the loan tax they pay is considerably low compared to when they are on their own. This is because mergers can support positive projects that could not have been possible with standalone firms. According to this model, refocusing is the firms response to the shift in profitability.
Disadvantages of Conglomerate Mergers and Divestitures
The article mainly focuses on the insightful conclusions and the disadvantages of divestitures and conglomerate mergers. In summarizing this model, the empirical divestitures and conglomerate model have been contradicted. Empirically, a conglomerate merger is high during times when the economy is stable. The model contradicts it because the model states that the conglomerate merger increases when a firms profitability has reduced and the firm is financially distressed. In the article, that was the only weakness that I noticed, and it makes me feel that the authors did not talk about the issue adequately.
The study will talk about the purpose of chief executive hubris in giving insight and explaining the large number of premiums paid for acquisitions. It is found that the higher the number of investments done by CEO hubris, the more the losses accumulated by the shareholders. Premiums have a poor reflection of a firms prospects and resources and believe that they can increase the matter. The importance of bonuses is that they have a direct impact on the performance of acquisition. The returns are higher when then the premiums paid are slightly lower.
The article has widely discussed the relationship between the premiums paid on acquisition and the CEOs characteristics. The personalities of CEOs affect the high amount of dividends paid in the case of the target firm. To get a more detailed sample, the authors should have also investigated the impact of gender on the values of the premiums paid. This would have adequately exhausted the entire topic of discussion in the article. However, the amount of compensation is directly affected by the characteristics of the CEOs, especially when dealing with uncertainties that may arise from the merger.
Summary of the Four Articles
In summary of the four articles, the first article talks about the effect of the SRI report on investors and stock output. The second article talks about the impact of market valuation on mergers. It explains that the target may sometimes use its private information to estimate the value of the market to know whether they are overvalued or undervalued. However, the firm may not exactly know the cause of the misevaluation. This makes them accept the bid. The entire article is based on the fact that both the firms involved in a merger have private information on each other, which helps in detecting the misevaluation.
In the third and fourth articles, the reason firms merge then divest later is established and gives insightful conclusions on the disadvantages and advantages of conglomerate mergers. The second article shows that companies with low financial capabilities do not have the power to engage in profitable projects, thereby luring the managers into a conglomerate merger. The merger helps the companies achieve financial stability, making them divest to avoid paying the coordination costs.
However, this article contradicts the fact that conglomerate merging is high when the economy is stable. It instead states that mergers rise when a firm has a reduced profit margin. The three articles relate to each other because they collectively discuss the merging of firms, why they can divest, and the differences between a conglomerate merger and a divestiture. They give a proper understanding of merging between firms and their disadvantages.
A search warrant is a document which gives the authorities the right for searching a place for specific items. The permit is signed by a magistrate and should list the objects which the officers ought to look for. A warrant is based on an affidavit, a document signed by a witness or a police representative, providing proofs which support their belief about the location of the required items. Police can search only for the objects, specified in this document. Warrants can be given to trace a person or specific property. The laws of each state usually define reasons for which a search can be commenced.
For authorities, it is always beneficial to acquire a warrant, because it discards the responsibility of the officer. Search warrants have a short period of validity, and they usually must be executed within 10 days of issuance. However, there is a specific type, an anticipatory warrant, giving police officers a right for a search which becomes valid after certain future events (Shilling, 2016). Courts provide these documents in cases when police have reasons to assume that evidence in a designated location will become available in the future.
Sometimes, courts authorize so-called sneak and peek warrants without a requirement of providing notification that a search has been conducted. There is another similar type that is often used, a no-knock warrant. Generally, police are obliged to announce their presence during the search procedure and identify themselves. However, courts decide that in situations of danger for a police officer or a person, or when the evidence can be destructed, the announcement is not required.
In case a search for records or documents is required, the warrant usually authorizes confiscation of a computer or digital information. After that, it is recommended to receive a new warrant which would give permission to search the computer (Sammons, 2015). Specific problems can be found here, as computer evidence can be easily destroyed. Special technical expertise should be held in each case in order to provide advice for collecting evidence in the given circumstances.
Digital Items Holding Data
The forensic examination should commence with the item which is of the highest priority. If all the items are equal and need to be inspected, a mobile device is usually good to start with. The analysis of smartphones can help to obtain a big range of evidence. It permits accessing sent messages and saved files and provides means for receiving data which is not stored on the device. A smartphone can contain personal information which may reveal the personality of a suspect. Moreover, it can assist in finding the location of a person in case they have been using GPS on the device. When seizing mobile devices, such as smartphones, it is important to remember to block communication between the unit and its networks, as files can be removed by the owner using remote access.
Laptops may be as useful for investigations as well as mobile devices. They can contain much information about the identity of a suspect, as well as his Internet activity logs, pictures and videos, and other important data. Files on laptops are also latent, sometimes users think they have erased them, but even deleted information can often be recovered. In case no pictures or videos are found, one needs to examine additional options, such as installed applications, the registry, and shortcut files. The most efficient way to do it is to use Directory Browser filters.
USB-memory sticks, as well as other external devices for keeping data, should be considered in the process of investigation. They may contain information that could be useful for solving the crime, for example, address books, images, videos, Internet activity logs, and many other files. Searching through USB-memory sticks can be especially helpful in investigating computer and financial frauds, homicides, domestic violence, software piracy, identity theft, or child pornography cases.
Police must have a special search warrant which allows them to seize computers or other devices. In case an officer does not have this document, there is a plain view exception to the rule, permitting the confiscation of the required items, but not their search (U.S. Department of Homeland Security, 2015). There are universal principles concerning the crime scene where digital devices are involved, they are:
To remember that it is always better if a specially trained Computer Forensic Analyst works with electronic technologies and collects the evidence
To make sure there is a legal foundation for the confiscation
To take prompt steps in order to save the evidence
Not to turn on the device if it is off
To secure the device and the data in case it is on
To turn the device off immediately if it is destroying the files with evidence
To document the location and state of the device
To take photographs of the device, its location, and all the attached units (U.S. Department of Homeland Security, 2015).
Moreover, there are a few well-tried steps to be followed. The first one is evaluating possible danger, securing and documenting the crime location. The next step is putting on gloves not to leave additional fingerprints. When seizing computers, it is required to pull the power cable from it, put it in an evidence bag with a tag, documenting the date, the case number, and other information depending on the investigation. If the object to be seized is a laptop, it is necessary to remove the battery, and put it in an evidence bag. The next step is bagging and tagging computer peripherals, such as mice, keyboards, disks, memory sticks, and others. Disks and tapes should be removed from computers, and floppy disks need to be set to read-only. After that, phone and networking cables are to be removed, labeled, and bagged. All the cables and inputs must be marked with colored tapes in order to correctly put them back later.
Finally, it is essential to pack printouts and documentation as they often contain information about passwords or suspects plans. After all the steps are taken, the computer is to be transported. All the opening slots should be covered with tape, and the computer model and serial number need to be written on a tag. Then, the device is to be bagged and transported to the headquarters. It is essential to keep bags away from magnetic sources and always have it in possession.
The Differences in Acquisition of Data from Live and Turned off Systems
The process of obtaining information from a computer differs depending on the state of the device. In case it is turned on, there is much useful information, and switching it off may cause loss of a few processes, including network connections. However, it is important to ensure the data is safe, and not in the process of deletion. If an officer witnesses the files being damaged, they should immediately pull the power cable out. Another way is to use specific tools in order to extract volatile data from the device before turning it off. When the system is dead from the beginning, it is considered right to cut the power supply to retain the safety of the data. In both cases, as soon as the system is turned off, it is necessary to remove the hard drive and attach it to the forensic system without changing the data and make a copy of it.
References
Sammons, J. (2015). Digital forensics: Threatscape and best practices. Syngress.
Shilling, D. (2016). Lawyers desk book (2nd ed.). Wolters Kluwer
U.S. Department of Homeland Security & United States Secret Service. (2015). Best practices for seizing electronic evidence [PDF document]. Web.
