In which situations do companies tend to adopt assimilation strategies normally?
Assimilation is a type of amalgamation when two or more companies merge. Several things come into play when companies think of merging. For assimilation to work as a merger strategy, it has to be well thought out. Towards this end, there are several situations in which companies tend to adopt assimilation strategies normally. One such situation is when one of the companies involved has a bad public image. Weber argues that mergers are at times driven by the elimination of a competitor (18).
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To avoid competing with each other, companies opt to merge and become one. The more superior company, or the company with an upper hand in the merger, will most probably push for assimilation. In turn, the acquired company will be absorbed into the larger company and stop being a threat.
An example can be given to explain this further. It can be argued that AB InBev acquired SABMiller in an attempt to get rid of the competition (Morschett 69). Both companies were in the same field. However, AB InBev had a superior and stronger hold of the beverage market. It, therefore, acquired second-placed SABMiller to not only ease competition but also take over the market completely.
Also, a company might acquire another through assimilation to diversify. There are many cases of companies that acquired others in an attempt to enter a new market. Pride explains that this is one of the easiest ways of entering a new market (27). Currently, many companies are interested in venturing into more than one field. Acquisitions have made this much easier as the acquired company already has a presence in the field, and the experience required to ensure successful business transactions. Many companies that are acquired in such situations are usually well-placed in the market with a lot of potentials. However, many usually have challenges expanding, and such mergers allow management to expand their business.
An example can be given to explain the use of assimilation to diversify further. EBS Worldwide was a merger between two companies, one from India, and the other from the US (Gotts 451). The two companies opened each other to new markets. Their profits allowed the merged company, EBS Worldwide, to acquire other smaller companies in other countries as well. The expansion has seen the two local advertising companies venture into other forms of media, public relations, and event marketing on a global scale.
Suppose that an organization desires to develop its own organizational culture, as a consultant, what are the main elements of organizational culture that you would recommend to be nurtured? Support your answer by a clarifying example of each
Organizational culture is critical to the success of a company. Indeed, several things come to mind when thinking of the best organizational culture for a company. One of such elements is values. Each organization has values. Whether based on the owner, or a shared ideal, these values have to be incorporated into the organizational culture. All employees have to fully understand the organizational values to incorporate them into the corporate culture.
Besides, if the employees do not agree with the values, they will not feel obliged to perform. Indeed, it is hard for the company to have employees that fully agree with the company values. Due to this, human resources must ensure that all employees hired can comfortably fit in the company even though they might not fully agree with the organizational values. Examples of values that are ideal for any company include transparency, accountability, and respect for each other.
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I would also stress the importance of communication in developing a good corporate culture. Communication has been ignored in the process of developing corporate cultures. Thurlow et al. argue that communication has to be flexible in any corporate culture (72). Flexible communication allows top-bottom, bottom-top, and side-to-side communique. The advantage of this is that messages are received quickly and on time. Making flexible communication part of the corporate culture is ideal for ensuring quick and reliable decision-making.
Thirdly, I would emphasize the need for shared beliefs. Moschetti argues that corporate beliefs bring together employees across different cadres in the same company (71). An example of some of the ideal beliefs to have is “the customer is always right”.
For any sales company, such a belief will ensure that employees do what it takes to make their clients happy. In turn, such clients will feel obliged to be loyal to that company. This will then translate into better profits for the company. It suffices to mention that the beliefs of each company fully rely on the type of business involved. For instance, Google believes that their employees come first.
In conclusion, management has to make sure the employees have everything they need to serve the company’s clients comfortably and efficiently. Thus, my advice on the specific beliefs that a company should emulate will be restricted by the values and the make-up of the company. Additionally, corporate values and beliefs should be in harmony. They have to compliment each other. For this to happen, the management has to be keen on the corporate strategy. Application of both the values and the beliefs is then enhanced through a flexible communication system to create an effective organizational culture.
Gotts, K. Ilene. The Merger Control Review. Law Business Research Limited, 2016.
Morschett, Dirk, et al. Strategic International Management: Text and Cases. Springer, 2015.
Pride, M. William, et al. Foundations of Business. Cengage, 2016.
Thurlow, Amy, et al. “Evaluating Excellence: A Model of Evaluation for Public Relations Practice in Organizational Culture and Context.” Public Relations Review, vol. 43, no. 1, 2017, pp. 71-79.
Weber, Yaakov. Handbook of Research on Mergers and Acquisitions. Elgaronline, 2013.