Merger and Acquisition-Duke Energy and Progress Energy Essay

1384 Words Sep 18th, 2012 6 Pages
Duke Energy and Progress Energy to Merge

Numan ILERI

MSL 750 ORGANIZATIONAL CHANGE
CASE STUDY 1

Change is necessary if organizations are to survive and thrive, and the sharp downturn in the economy is forcing leaders in all industries to take a fresh look at how they do business. Recently, most companies in the financial services industry faced with a need for dramatic change after mortgage crisis and the Wall Street meltdown. (Daft, 2011, p. 460)
Change is an ongoing and never-ending process of organizational life. The intensity of organizational change can range from the nominal to the radical. As Clark, Gioia, Ketchen, and Thomas (2010) mentioned, three degrees of change intensity are distinguished according to the amount of
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By merging our companies, we can do that more economically for our customers, improve shareholder value and continue to grow. Combining Duke Energy and Progress Energy creates a utility with greater financial strength and enhanced ability to meet our challenges head-on”. Similarly, CEO of Progress Energy, Bill Johnson, also stated “It makes clear strategic sense and creates exceptional value for our shareholders. Together, we can leverage our best practices to achieve even higher levels of safety, operational excellence and customer satisfaction, and save money for customers by combining our fuel purchasing power and the dispatch of our generating plants. This merger also provides predictable earnings and cash flows to support our dividend payments to shareholders.” After merger, companies will diversify their resources (coal, gas/oil, nuclear, hydro/wind) and increase their generation capacity. Both companies’ CEOs have stated many reasons for merger; however, there are a lot of pitfalls that have been reported by researchers.
Existing M&A literature reveals six distinctive theories that identify distinctive sources of problems that emerge during the M&A related organizational integration processes, predicts their psychological and behavioral effect on employees, and suggests relevant prescriptions to prevent and/or address the…