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Monday, September 22, 2014

Merger & Acquisitions - what happens to the companies Vision & Mission

I received following question from one of my former students:

I have trying to find the answer regarding, "What happens to the Vision and Mission Statement in the case of Merger and Acquisition/Take Over", but has not been able to find precisely. In the world of business Mergers and Acquisitions are inevitable, especially today. With this I would like to ask, "What happens to the Vision Statement of the companies when they are merged? What happens to the Vision and Mission Statement of the Company which is acquired or taken over by another? Does it get diluted and the company adopts that of the parent company? So I would like to ask for your opinion in this case.

My Reply to him:

Merger and Acquisitions are part of routine for the companies of today. However they have to take place within the overall objectives, vision and mission of the organization. This is an ideal situation and companies should acquire or merge with such companies where there is match between their and acquired companies vision/mission statement. But many a times it so happens while responding to the market forces and with an intent to sustain in the competitive environment they might have to merge with some such companies where vision/mission statement does not fit it well. In this case there are two options which would depend on the situation as such. 

First, have vision/mission statement in line with the macro objective of the organization, so after merger it needs to be modified (this could be avoided as well). 

Second, if the merged company is going to have a separate entity so far as its functioning is concerned they can stay the way they are and could have separate mission/vision statement and keep operating in the market.

The key point is that the companies must deliberate and decide on the mission/vision statement very carefully after considering the future sustainability issue which must keep a scope for widening its operations across industries and geographies. The vision/mission should be inclusive and not exclusive in nature. The best example could be of Infosys (in India) and HP (in US). 

I hope your point is clear and I wish you keep asking these kind of questions so that we can exchange our thinking.