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In the early 1990? s, corporate restructuring was being reported in newspapers and magazines almost daily. In 1995 alone, domestic mergers totaled more than $ 450 Billion. In just the first week of the second quarter of 1996, merger activity totaled $ 28. 3 Billion. To name a couple of corporations that were involved were Bell Telephone systems and AT &# 038; T. Pros and cons come from such large mergers and acquisitions.
A good aspect that came from the Bell merger was that they were able to provide service to 30 million residential and business customers in seven states west of the Mississippi. On the other hand, a negative aspect that arrived from mergers is that often times, after the merger had taken place, the companies decided to downsize to make their new corporations more efficient. Long-time employees are now being pushed out of the company. Investors and analyst? s alike, seemed to respect the companies that inflicted the deepest cuts and fired the greatest number of workers. Executive pay rose along with corporate profits and productivity.
The compensation packages for those individuals laid-off were tied to job performance. This created a huge amount of hostility. Mergers also created fear amongst the employees. The fear of job loss eroded the loyalty between employees and their companies. Mergers, however, are sometimes inevitable.
The corporations must find ways to stay competitive, not only internationally, but globally.
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Research essay sample on Mergers Corporations Merger
