Failures of Mergers and Joint Ventures

Failures of mergers and joint ventures

In recent years, the number of mergers and joint ventures has gone up. The fact is that many companies want to expand their business in order to get advantages such as increase in revenue, a cut in cost in general. However, the main reason for the integration of organisations is due to a competitive world that they must face. Unfortunately, the side effect is that many mergers and joint ventures often break up, and it is claimed that 40% of mergers and joint ventures fail. Therefore, this essay will examine the main reasons for the breakdown of mergers and joint ventures. We shall also focus on culture, communication, leadership and globalisation, which have major effects on the failure or success of mergers.

To start with, a merger occurs when two companies combine to form a single company. A merger is very similar to an acquisition or take-over, except that in the case of a merger existing stockholders of both companies involved retain