Pros and Cons of Merging Two Businesses (Essay Sample)
Pros and Cons of Merging Two Businessessource..
Pros and Cons of Merging Two Businesses
Mergers occur when two companies come together to form one business entity (Moskovicz 300). When companies merge, there are several issues that need to be assessed to determine if the benefits outweigh the risks and costs involved. In the end, it is crucial for business owners to assess the advantages and disadvantages of merging two businesses before deciding whether or not to proceed with it. The long-term pros include value addition to the new entity, opening up new markets, and the creation of multiple growth opportunities. The cons include creating distress among the employee and difficulties in consolidating companies that have conflicting corporate cultures.
Pros of Merging Two Businesses
Merging two businesses adds more value to the new entity. At the heart of mergers is reducing duplication and boosting efficiencies. The end result of mergers is to increase the overall revenue since the cost redundancies are eliminated when two businesses come together to form one entity. Mergers enable the new entity to solve specific needs affordably than either individual company could do on its own. One instance is to combine experienced employees from both companies to handle specific tasks instead of hiring new employees or incurring additional training costs.
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