Develop An Action Plan For The Merger Between The Two Companies
Analyze the financial and leadership strengths and weaknesses of the Utah Symphony before the merger.A merger allows for the two firms to come together and become one company. Utah Symphony has several strengths and weaknesses that need to be addressed before the merger to ensure that there is a smooth transition. One of the strengths is that it has received above average endorsement that makes it qualify into the Group 2 firms (Delong, 2005). This is a financial strength; it is good because it means there is a permanent investment set aside to ensure there is a sustainable level of operational income. The other Strength is leadership strength. The company has been a well established firm and has had good leaders who have created a good reputation for itself over the years (Delong, 2005). This comes with a clientele base that is well organizes, structured and maintained. The former CEO Parker is a well known person for good and efficient work etiquette.
One of the weaknesses of Utah Symphony is its inability to properly negotiate employee’s payments. This has resulted in hiring people on contract that has dug into the profits (Delong, 2005). This is because even when sales have decreased the people still have to be paid as per their contract. This also means that the firm cannot downsize its labour in times of financial crisis. This is a major financial weakness for the company. There is a leadership weakness in the fact that the CEO of the firm retired, this means that there will be changes in leadership and this always creates challenges as it usually ends up being a hard transition. It is mainly because employees and clients find it hard to get involved with the new leader.
Contents
TOC o “1-3” h z u Analyze the financial and leadership strengths and weaknesses of the Utah Symphony before the merger. PAGEREF _Toc377401419 h 12) Analyze the financial and leadership strengths and weaknesses of the Utah Opera before the merger. PAGEREF _Toc377401420 h 22a) Recommend the key steps Anne should take to address these weaknesses to ensure a successful start of the merger. PAGEREF _Toc377401421 h 3A3) Analyze the four aspects of the scorecard from the attached “Business Scorecards” for each company. Consider the following in your analysis: PAGEREF _Toc377401422 h 33b) Develop a balanced scorecard for the merged company based on the specified strategic goals. PAGEREF _Toc377401423 h 4A3c) Analyze the strengths and weaknesses of the proposed merged company, addressing the four aspects of the scorecard you developed in part B. PAGEREF _Toc377401424 h 53d) Identify one highly probable issue that could arise during the merger process for each of the following areas: PAGEREF _Toc377401425 h 5
b. Key steps Anne should take to address these weaknesses to ensure a successful start of the merger
Anne should ensure that the financial state of the company gets better. This can be done by ensuring that the employees are not hired on a contract basis (Delong, 2005). This will allow for flexibility in labour during trying times in the business cycle. There should also be an in house training to all employees on how to ensure quality services are offered. This increases efficiency. Contract also limit opportunities that may arise in between the contracts, this makes the firm to lose out on more opportunities.
Mergers require a higher liquidity asset ratio of the firm; Anne can achieve this by increasing the price of the tickets to increase profits and investable income. The higher the profits, the better the financial status of the company (Gaughan, 2005). Anne should ensure that the prominent employees that are known to the clients are retained; this will ensure stability and consistency in the management.
An increase in the profits should also be not too high as it will scare away clients and potential customers, so just a slight increase can make all the difference.
2) Analyze the financial and leadership strengths and weaknesses of the Utah Opera before the merger.One major strength is that Ann has been the general manager of the company for long enough. This means that she is well known to both the clients and the employees (Delong, 2005). This familiarity creates a sense of stability and consistency in the leadership of the company. Anne has a renowned reputation of dealing with financial problems easily. The other major strength is the increase in the endowments that the firm receives. This increases the amount of capital available for operational activities creating a more flexible and convenient environment for growth and expansion.
The major weakness is financial crisis, this is because the firm has currently a debt of $450,000, this means that for last several financial year there has been problems in financial budgeting. The asset liquidity ratio is also very low because the company has most of its assets tied up in productions areas (Delong, 2005). This brings in the issue of repayment of the debt by both firms after the merger. The other weakness is that there are different interests in the leadership. Increase in conflicts creates an unstable environment for commercial activities. The leaders do not seem to agree on most issue and it has led to lack of decisive decision making and unity.
2a) Recommend the key steps Anne should take to address these weaknesses to ensure a successful start of the merger.Anne can first of all ensure that the financial side of the firm is solved. There should be a strategic plan put in place on how to repay the debt. The fundraising goals for all projects should be met to ensure that there is an increase in the amount of money collected. This money should be used to release some of the assets that are held up by the production crew areas.
Ann should clearly outline the roles and responsibility of each leader in the company. She can do this by taking a more involved, assertive and follow up role (Gaughan, 2005). This will reduce the conflict as one will know the limits of the authority mandated to them. Ann should ensure that positions are allocated as per technical qualification and successful past experience. This means that efficiency will be improved and small mistakes will be avoided. There should be a strategy also on how to increase endowment; this is mostly from sponsors of various projects.
A3) Analyze the four aspects of the scorecard from the attached “Business Scorecards” for each company. Consider the following in your analysis:• How do these scorecards represent the differing cultures and visions of the companies?
Profitability is one of the areas in which the culture differs, this is because Utah symphony aims at increasing the market share without increasing its prices while the Utah Opera hopes to increase the prices gradually in order to achieve higher profits.
The employee’s treatment and qualification, Utah Symphony always treats its employees like family and requires highly qualified employees, Utah Symphony believes in hiring employees and slowly training them so that they can become better with time.
Utah also has a great flexibility in the internal actions as compared to Utah symphony. This is because it hires employees and performance but not on contract as opposed to Utah Symphony.
Growth is also another culture they differ in. This is because even though the companies have the same goal, their mechanisms are different.
Do the scorecards address the strengths and weaknesses you noted, and, if not, should they
Yes they do address the weaknesses and strengths. This is because the best culture can easily be picked. Strengths are picked over weaknesses.
3b) Develop a balanced scorecard for the merged company based on the specified strategic goals.Operational activities – Given the different cultures of the firms, the merger will aim at reaching a world class status in the performing industry. At the same time it is bound to capture new and raw talent that can be used in the firm. This will ensure a constant flow of new and untapped talent.
Profitability – this will be done by ensuring that prices remain constant over a long period of time and that there is an increase in the market share through proper advertisements and increase in shows and bookings.
Employee policy – the employees should not be hired on a contract, this is to ensure flexibility of the merger to handle operational and administrative costs in tough economic times.
Leadership and financial stability – this can be maintained by ensuring fund raising is done well and goals achieved while debts will be highly avoided. Leaders should be authoritative and innovative.
A3c) Analyze the strengths and weaknesses of the proposed merged company, addressing the four aspects of the scorecard you developed in part B.One strength is that there will be increase in endowment making more capital to be available for operational activities that lead to increase and expansion of the merged firms. Another strength is increase in the market control, this is because both the already established clientele base will come together into one and sale of tickets is bound to increase.
Internal processes are going to become hectic and this is a major weakness because it will slow down the performance of the firms. This is because when two different cultures come together they conflict on some issues and both sides believe their way is the best because it has worked for them for years (Gaughan, 2005).
3d) Identify one highly probable issue that could arise during the merger process for each of the following areas:Finance – how the debt owed by the Utah Opera will affect the activities of the company and the different strategies to be embraced to increase endowment and fund raising.
Customer satisfaction – different client cultures have been used over the years and it is not known how the clients will react to the change in strategies.
Human resource – change in leadership and no use of contracts will have an effect on employees.
Recommend mitigation actions that the new merged company executive could take.
The new merged company should embrace hiring employees by qualification. This ensures competence. There should be an in house training session that is periodic that allows for improvement in performance (Gaughan, 2005).
There should be a clearly laid out action plan that outlines the role of each employee and leader. This will reduce conflicts. Increase in awareness of the merger will increase clientele and this can be done through advertisement using the entire fourth estate.
References
Delong, Thomas and Ager, David. “Utah Symphony and Utah Opera: A Merger Proposal”. Harvard Business School. 2005. 9-404-116
Gaughan A. Patrick, (2005), Mergers; What Can Go Wrong and How to Prevent It, Orthodox Print Press, New York.
