Structure emergence in corporate mergers
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Structure Emergence in Corporate Mergers. Edward Bailey, University of Arizona Optical Sciences Amit Joshi, Anderson Graduate School of Management, University of California Los Angeles Ong Kiankok, La Trobe University, Australia Suhan Ree, Kongju National University

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Structure Emergence in Corporate Mergers

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Structure emergence in corporate mergers

Structure Emergence in Corporate Mergers

Edward Bailey, University of Arizona Optical Sciences

Amit Joshi, Anderson Graduate School of Management, University of California Los Angeles

Ong Kiankok, La Trobe University, Australia

Suhan Ree, Kongju National University

Luis Armando Lujan Salazar, Monterrey Tech, Mexico

Ricardo Valerdi, Center for Software Engineering, University of Southern California


Outline

Outline

  • Problem Statement

  • Literature Review

  • Approach

  • The Model

  • Results

  • Attribute Comparison

  • Conclusions


Problem statement

Problem Statement

  • The merging of two firms generates social complexities

  • How do individual factors affect?

    • New firm topology

    • Position in the new firm

    • Value of the new firm


Literature review

Literature Review

  • Previous studies of merger affect on

    • competitive relations/anti-trust

    • Market power congestions

  • Social forces that determine who stays

    • Formal education

    • Previous leadership experience

    • Perceived threat to management

    • Other human emotions


Approach

B1

A1

A5

B5

B2

B6

B3

B4

A6

A2

A4

A3

Approach

Firm A

Firm B

Firm C

?

+

=

  • Assumptions

  • Same market, slightly different competencies

  • Firm C will be made up of 6 < C < 12

  • At least one employee at each level

  • Three levels available


The model

The Model

Value = a1 * (Performance) + a2 * (Internal Connections) + a3 * (Hierarchy) +

a4 * (Specialization) + a5 *( Performance * Specialization)

a1 = a2 = a4 = a5 = 0.5a3 = -0.3


Results

Results

Value per employee


Attribute comparison

Attribute Comparison


Conclusions

Conclusions

  • Little work done on resulting social structures of firms after mergers

  • Interdependencies determine the level of efficiency in a new system

    • Internal connections add value to the firm

      Lesson: Maximize your connections


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