FIN 325 Team Week 5

FIN 325 Team Week 5 - losing their job or being forced to...

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Describe any downside risks? Some downside risks of mergers include incompatible systems, slow execution of internal controls, surprises, and ethical lapses (Klein, 2006, p. 42). Incompatible systems can cause delays in business which can result in loss of customers. Slow execution of strong internal controls when merging can cause uncertainty of business operations that can add to costly errors, criminal losses from theft, deception, and abuse (Klein, 2006, p. 42).   Surprises can occur if thorough research is not completed on the new organization and all key elements of operations. Ethical lapses can result when a merger occurs as anxiety rises for employees who worry about
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Unformatted text preview: losing their job or being forced to take a pay cut therefore; implementing controls against stealing are needed. Executives may also believe that their jobs are not safe either and may become more inefficient which is costly to the company. Companies should link compensation more directly to performance and closely monitor these risks (Brealey, Marcus, & Myers, 2007, p. 593). References Brealey, R. A., Marcus, A. J., & Myers, S. C. (2007). Fundamentals of Corporate Finance . (5 th ed.). New York: The McGraw-Hill Companies. Klein, M. (2006). The Hidden Costs of Mergers and Acquisitions. Risk Management , 53(3), 42. Retrieved February 2, 2009, from EBSCOHost database....
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