How mergers go wrong. The article “Merger Brief: First among equals” describes one of the biggest mergers in the American corporate history. In 1998 Citicorp, the world’s most profitable company, merged with Travelers. Despite that differences in size of each company’s success in operations and the fact that Citicorp was dominant in that merger, both executives, John Reed of Citicorp and Sandy Weill of Travelers, claimed that it was “merger of equals”, becoming co-chairman and co-chief executive. For their merger strategy, they have adopted “Noah’s Ark” approach to a top management, when every top-level position was made of two employees coming from both Citi and Travelers. Nevertheless, there has been some resistance from employees of involved companies; for example, some of Citicorp’s staff wanted their services to continue under Citi’s brand rather than switching to anything new.
Furthermore, two ambitious executives, having their own points of view and own visions and strategies, got involved in scuffles, but their relationship worsened and led to misunderstanding and miscommunication in top-management. Consequently, they were forced to split their duties: Weill was taking over day-to-day operations and Reed taking charge of strategy. Further, disputes and tension between two executives led to Mr. Reed’s retirement which he was forced into by the board. Sandy Weill then became a sole boss of that enterprise, and this fact had immediate impact on corporate structure.
The Term Paper on Merger, Acquisition, and International Strategies 2
1. For the corporation that has acquired another company, merged with another company, or been acquired by another company, evaluate the strategy that led to the merger or acquisition to determine whether or not this merger or acquisition was a wise choice. Justify your opinion. A merger occurs when one firm assumes all the assets and all the liabilities of another. The acquiring firm retains its ...
The new company was rapidly becoming “Weill’s creature” which means that the most of the Citicorp’s employees took off key positions in organization and became occupied by Travelers’ employees. In spite of all the problems mentioned in the case that relate to HR, it indicates that company is being successful, sustaining growth, and increasing profits and stock price. Although the merger seems to be successful, based on financial indicators, I believe that in the long run new company will have to deal with numerous problems in Human Resources. Those problems are rooted in different corporate cultures and different approaches to HR, held by the executives of pre-merger companies.
Mr. Reed was always a loner in leadership and tended to invite people to the inner circle, and get rid of them afterwards. On the other hand, Mr. Weill relied on his intuition and loyalty of employees when choosing management teams, and rewarded by loyal managers. After the scuffles broke out between two executives, the company lost some of its valuable employees, like Heidi Miller, Citi’s chief financial officer who took off to Priceline. Moreover, continuous disputes at the top impacted employees’ morale and led to miscommunication between different parts of the new company.
There are many challenges facing Sandy Weill currently in terms of Human Resources, because of the long run it will have impact on company’s operations and performance. First of all, the focus for a new company is expanding operations overseas; however, Travelers employees lack international experience. Considering the fact that most of Citicorp employees were removed and replaced by Travelers staffs that don’t have that experience, it may hurt company’s performance in the international markets, where it expects its biggest growth, and some bad lending decision could occur. Another challenge that Mr.
Weill has to deal with is its Internet operations strategy, which was left unfinished with the departure of Mr. Reed. Moreover, 1400 Citicorp’s employees, working on E-Citi, were moved to other branches of merged company after Mr. Weill took over operations, causing already unsuccessful project with no hopes.
The Term Paper on Chevron Texaco Examination Foreign Company Employee
Letter to Employees TO ALL EMPLOYEES: The Chevron Texaco Corporation combines companies with long and proud histories and worldwide reputations for honesty and integrity - two key values of The Chevron Texaco Way. These well-deserved reputations not only underlie our past accomplishments but also will be critical to our future success. The Chevron Texaco Manual of Compliance Procedures and ...
Weill decided to appoint Internet strategy to top executives in individual businesses, which could be bad decision, since the absence of one integrated Internet strategy throughout the whole organization can flaw many of its processes. This case is a good example of how important is the issue of Human Resources in merger process. The integration of two big companies requires very careful approach to HR, clearly defined strategy, and a good communication between executives of each company. Evidently, when each executive follows its own ego and own strategy, it slows down the integration process and may raise serious challenges for a new company..
