THE SOCIALIST ACADEMICS’ PERSPECTIVE - Sociology Assignment

Internal Code: MAS5715

Sociology Assignment:

“Growth drives value for companies across all industries, and mergers and acquisitions (M&A) have always been a major strategy for growth. But with a lack of market transparency, investment decisions are made and merger strategies developed with a degree of uncertainty. As a result, growth investments often fall short. A.T. Kearney's Merger Endgame tool reveals strategic ways to win the race to consolidate, creating 360-degree transparency by reflecting industry consolidation patterns, competitive value growth dynamics, and structural breaks. This methodology, which uncovers the challenges and strategies of consolidation stages, is based on a global database of more than 600,000 companies, covering 98 percent of the global market. Applying the Merger Endgame strategy to leading blue-chip companies has helped our clients generate significant returns on their growth investments. The Merger Endgame methodology shows that companies that succeed in the long run proactively drive their industry's consolidation—the endgame. But why does it come to this endgame in the first place? The main reason is that companies pursue growth through acquisitions to capture scale advantages. A size advantage lowers costs, which leads to competitive advantage and, often, to competitive price setting. Another reason is that mergers and acquisitions just happen, and industries consolidate over time, although our studies show that 60 percent of M&A fail.1 For any business, this means either lead the merger endgame and acquire or risk being eaten by a bigger player. And winning hinges on making the right investment and divestment decisions at the right time. The challenge is that these decisions are made with uncertainty, and most M&A integrations do not generate the expected value or capture the projected synergies.” Questions: a) Compare & critically appraise the socialist-academic perspective of Ghemawat & Ghadar with the management consultant perspective of AT Kearney on global mega-mergers. b) Present a concluding critical argument with supporting evidence on whether you believe global mega-mergers are desirable or not. This should include any other arguments/alternatives that support your stance.