To What Extent Does Restructuring Transform Corporate Market and Financial Performance?

b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

From the liberal point of view, the FTC and the EC should recognize the Boeing-McDonnell Douglas merger as an international issue, not a national issue, so that it should restrain autonomy of state, in this case the U.S., preventing from intervention to protect domestic interests. However, in the case of Boeing-Mc Donnell Douglas, both antitrust authorities, specifically the European Commission, acted in a protectionist manner keeping domestic interests. In a study on 290 proposed acquisitions screened by the EC during 1990, it was found that although European merger and acquisition regulators claim to be protecting competition and consumers, in fact, the more harm suffered by European rival firms when the acquire is coming from the outside the EU, the greater the likelihood of European regulatory intervention against the proposed merger or acquisition . The EC’s focus on competitors rather than consumers was revealed by this study.

Monopolies and oligopolies often use anti-competitive practices, which can have a negative impact on the economy. This is why company mergers are often examined closely by government regulators to avoid reducing competition in an industry.

In this chapter, we first provide coverage of expansion through corporate takeovers and an overview of the consolidation process. Then we present the acquisition method of accounting for business combinations followed by limited coverage of the purchase method and pooling of interests provided in a separate sections.

Companies do not have the freedom to merge and acquire as they please do. All have to meet the requirements and essentially be approved by regulatory bodies. In the context of regulations, antitrust laws and security laws are commonly referred to by regulator to determine whether a merger or acquisition should be allowed or rejected. Antitrust laws prohibit mergers and acquisitions that impede competition. The point is very simple where antitrust is referred to as competition. The goal is to increase competition because more competition in economics means that consumers get more at a fairer or lower price. Anytime a regulator believes that a merger or acquisition will make an industry or market less competitive, the business transaction might

It is necessary for a firm to expand in order to gain profits or leverage in a market place. One of the ways firms can do this is by executing a merger. There are two types of mergers, horizontal and vertical mergers. There are many incentives for companies to perform either type of merger; however, both types of mergers will always raise suspicion when being executed because they are usually perceived as anticompetitive. In order to prevent an anticompetitive environment, our government established a federal agency called the Federal Trade Commission. Their job is to review the activity of any given firm and decide whether or not to allow them to continue. Presently, CVS and Etna are currently undergoing a vertical merger to gain profits and

This strategy started under the Reagan administration since they did not enforce U.S. anti-trust law “restricted managers ability to merge and consolidate monopolistic firms” (Schaeffer, 49). The Reagan administration viewed mergers and monopolies as a good thing. They argued that these mergers play important role in the economy and if there is ineffective management or redeployment of assets the companies can be penalize. Nevertheless, the government adopted policies in 1980, which allow more than 1,565 mergers that equal to be worth 32.9 billion and double value within a couple of years. During the next administration under George H. W. Bush they adopted similar policies and the chain toward Bill Clinton administration allowing mergers to continue plus arguing that the anti-trust laws were out dated. “There has been a sea-change in (federal government) attitudes towards large mergers” (Schaeffer,

Mergers and acquisitions may be put to antitrust review by a number of government agencies. In the United States, mergers and acquisitions are subject to review by various federal and state regulators. In addition, foreign jurisdictions may review such mergers and acquisitions in certain situations. For example, the European Union and China now frequently require pre-merger approval. In certain regulated industries, such as banking, communications, electric power, insurance, and natural gas, mergers must be approved by various US State regulatory agencies, generally under a public interest standard that may involve issues of local concern separate from antitrust review. In some cases, private parties may also initiate actions to block a proposed

Since the late nineteenth century, the federal government has challenged business practices and mergers that create or may create a monopoly in a particular market. Federal legislation has varied in effectiveness in terms of preventing anti-competitive mergers.

While it was foreseen that the company would initially take financial setbacks because of the reorganization, it was not believed that the financial risks would be drastic. However, the impending report that Mr. Elesser has to present to the board will detail a net income that will be nearly 26 million dollars in the red for 2004 (see exhibit 2)3. The blunt force restructuring met resistance on numerous fronts. First of all, the various components of the company did not operate under the same uniformed leadership objectives. Each division was set up to look out for their own interests and markets. When the restructuring plan that focused on a more centralized management process, many of the things that worked for one division did not necessarily work for other divisions of the company. This left some divisions at a severe disadvantage. Another obstacle that worked against the restructuring was the employee unions in which the company had to deal. The unions were not on board with the various downsizing and restructuring methods. In addition, the company had to deal with a couple of different unions which posed a problem with negotiating tactics. Benefit costs were also a significant investment that did not hold up well under the auspice of restructuring.

1) Describe the new business practices that led to business consolidation and monopolies. How did government policies address these new business practices? (520-528)

Does the government have the right to regulate large corporations, namely the Microsoft Corporation? If so, then to what extent can the government do so? Based on our research, it is the government’s responsibility to remedy Microsoft’s noncompetitive behavior in order to increase fair competition.

In the cases analyzed, we might infer that during a period of economic difficulties companies had gone through deep discontinuity. As such, this determined the need for a turnaround to realign the companies’ strategies with the external and internal environment. These changes impacted the four companies analyzed previously.

The purpose of this report was to examine organization restructuring. Research for the report included literature based on organizational restructuring and the various processes involved in restructuring. The major findings indicate that the two methods commonly used for organizational restructuring to be downsizing and reengineering of business processes(Cummings & Worley, 2008). Downsizing assist the company to reduce its workforce, and this saves cost in terms of payroll reduction. Reengineering allows a company to change and adapt to the way it

4.1 What is the purpose of restructuring? One of the basic purpose of restructuring for a company is to improve its managerial efficiency and efficacy. Sometimes companies grows in size and scope, and it become very difficult to manage such a huge company under one umbrella. So the companies goes for restructuring. Companies also go for restructuring in order to keep themselves updated with new technologies. In a today’s changing environment the only