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Two Human Capital effects as a result of M&A

What are two human capital effects that would be characteristic as a result of M&A? What are some cultural issues that might arise as a result of pursuing a specific M&A strategy? How would you measure the financial impact of human capital decisions with regards to the M&A activity? How would a reduction in personnel affect the value of the company?

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What are two human capital effects that would be characteristic as a result of M&A?

One plus one makes three: this equation is the special alchemy of a merger or acquisition. The key principle behind buying a company is to create shareholder value over and above that of the sum of the two companies. Two companies together are more valuable than two separate companies--at least, that's the reasoning behind M&A.

M&A will have impact on two aspects:

1) Culture
2) Employee turnover

Cultural issues

The chances for success are further hampered if the corporate cultures of the companies are very different. When a company is acquired, the decision is typically based on product or market synergies, but cultural differences are often ignored. It's a mistake to assume that people issues are easily overcome. For example, employees at a target company might be accustomed to easy access to top management, flexible work schedules or even a relaxed dress code. These aspects of a working environment may not ...

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