Karthikeyan D S

Users Lose Middleware Choice in Oracle Acquisition of BEA

These are fantastic observations! Acquiring companies tout acquisitions as the best thing to have happened to the industry and talk about the target company filling missing product/technology links, newer market access, increased market share, complementary offerings, cross selling to customers, a bigger brand motivating employees etc. But why do most mergers & acquisitions fail? I think the most important factor is the demotivation of existing employees in the acquired company. People in the acquired company just lose the plot! For years, they have been competing against Firm A and after the acquisition when they become a part of Firm A, the fire is lost and they miss the David vs. Goliath fight. We also find leaders thrust upon the companies with rules that worked in their companies and make unreasonable organization changes. After the acquisition in most cases, the VPs become manager, the CEO becomes the director and the manager becomes the team leader. These are really demotivating for the people in the organization. Also, the communication they have used for years drastically changes. Till yesterday, they would have thought how a small company means customers are served better in niche products and how a bigger company may not fit a customer's needs. Today, the same employee should talk about how the bigger company has become better with this smaller solution and blah, blah! Most of the time, M&As fail because, organizations want to build empires and are driven by egos! Where does adding to shareholder value figure here? The CEO who acquired trumpets and his PR bandwagon blows his triumphs! The shareholder value is dumped and buried in the longer run! Come on, as long as hedge funds and traders are making quick bucks, does it matter?