Mergers

Question 1

How can a merger reduce costs?

Three reasons

Answer 1

1. Elimination of duplication
2. Rationalisation of activities
3. increasedeconomies of scale

Question 2

What are 2 benefits of Mergers?

Answer 2

1. Greater economies of scale and purchasing power drives down costs.
2. Improved customer experience by sharing knowledge, expertise and skills betwen the organisations.

Question 3

What are 3 disadvantages of Mergers?

Answer 3

1. Can import the failures of one organisation onto the other by failing to address problems
2. Cultural differences
3. Merger activities can become priority and take over front line operations as a priority.

Question 4

What are 3 alternatives to mergers?

Answer 4

1. Strategic alliances
2. Shared services
3. Pooled budget arrangements

Question 5

What are 4 potential advantages of the merger between HCT & NTS?

Answer 5

1. Greater economies of scale and purcahsing power,rationalisation of activities could reduce costs for both sites.
2. The good reputation of HCT could give a boost to the reputation of NTS.
3. Savings can be made supporting staff as only one management team will be needed (reduction in duplication).
4. Staff from NTS can learn from the success’ of HCT in improving poor performance as they have been in the same position.

Question 6

What are 5 potential disadvantages of the merger between HCT & NTS?

Answer 6

1. The chairs of each school have a poor working relationship and this could effect the performance of the schools.
2. There may be some strong culture differences between the 2 schools.
3. The efforts of the merger process could become priority, putting the education of the pupils secondary.
4. If issues within NTS are not resolved they could spread to the new merged organisation.
5. The school is over 2 sites and this could be an issues for children who cannot travel far.

Question 7

What are 3 benefits of merging the finance department of HCT & NTS?

Answer 7

1. There will be cost savings as less full time staff will be needed and there will be less duplication of activities and systems.
2. The experience and expertice of HCT finance staff will be shared with NTS.
3. Opportunity to take the best aspects of financial governance from both organisation.

Question 8

What are 3 disadvantages of merging the finance departments of HCT & NTS?

Answer 8

1. Culture differences between the 2 teams could cause conflicts
2. If not carefully managed any poor practices from either organisation could carry over.
3. There may be resistence to changes in working practices.