Virtual Organization Strategy Paper

1414 Words6 Pages
Virtual Organization Strategy Paper

Companies have numerous options when determining how to meet their capital needs or when faced with a lucrative opportunity for expansion. Businesses must decide whether offering an initial public offering of stock, merging with another business, or acquiring another company presents the best option. Each method possesses its advantages, disadvantages, threats, and opportunities. In this case, the domestic purveyor of fine foods and wine, Kudler Foods, and the internationally recognized fine food and wine wholesaler, LaFleur Trading Company, face the decision as
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Moreover, an acquisition can result in job duplication. The combining of two similar organizations results in administrative redundancies within each business. Having two people doing essentially the same job is inefficient and therefore unnecessarily expensive. Companies with strong managerial processes and teams must navigate these complications in order to maximize efficiency, but this could require layoffs and job elimination (Arthur, 2012). Opportunities and Threats There are also opportunities to an IPO as well as to mergers and acquisitions. IPO’s can help companies like Kudler Fine Foods and Lafluer Trading to raise their capital without having to take on more debt. This is a smart decision for both companies because they do not have to pay back that they have gained through the use of their IPO’s. Mergers also give the two companies opportunities as well. Through a merger the companies are able to share their capital as well as their marketing strengths in order to achieve similar goals that they would otherwise be unable to achieve. Through acquisitions the two companies are able to acquire other smaller companies and sell there stock in order to gain more capital. There are also threats to IPO’s like loss of total control of the company as well as having to answer to shareholders with regards to decisions amongst the
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