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Ch07_09_combo_present_Cho_Final

Managing the integration process diverting attention

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Unformatted text preview: operational scope created by diversification Increased may cause managers to rely too much on financial rather than strategic controls to evaluate business units’ performances. units’ – Strategic focus shifts to short-term performance. Strategic short-term – Acquisitions may become substitutes for innovation. 1–24 Problems in Achieving Acquisition Success: Managers Overly Focused on Acquisitions • Managers invest substantial time and energy in: – Search for acquisition candidate and due-diligence – Preparing for negotiations. – Managing the integration process • Diverting attention from other strategic matters – – – Long-term competitive success Identifying and capturing opportunities Interacting with key stakeholders 1–25 Problems in Achieving Acquisition Success: Too Large • Additional costs of controls may exceed the Additional benefits of the economies of scale and additional market power. market • Larger size may lead to more bureaucratic Larger controls. controls • Formalized controls often lead...
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