IndexIntroductionReasons for MergersRole of Managers in Successful Mergers/AcquisitionsRover Acquisition CaseReasons for FailureConclusionsIntroductionMergers or acquisitions have become a norm for companies aiming for growth . Several companies use mergers and acquisitions to form strategic alliances. In most cases the underlying reason for this is to ensure the long-term sustained achievement of “rapid and profitable growth” for the company. In today's competitive world it is important for various businesses to keep pace with a rapidly growing diverse global market with increased competition. Forming alliances is essential to gain a competitive advantage. Say no to plagiarism. Get a tailor-made essay on "Why Violent Video Games Shouldn't Be Banned"? Get an original essay According to Megginson and Smart “Mergers and acquisitions are major corporate financial events that, if executed efficiently and with the right motivations, can help managers realize their ultimate goal of maximizing shareholder wealth.” merger is the combination of two or more companies into a single company. This is achieved when a company or business purchases property or some other form of asset from another company. The result of this action is the formation of a single corporate structure. This new corporate structure retains its original identity. An acquisition is slightly different from a merger in that it involves "unwinding" many issues and forming an entirely new company. Reasons for Mergers There are many reasons for mergers and acquisitions, such as growth of the company, achieving economies of scale, for power or better management, stability and to increase market share and eliminate competition. At the heart of mergers and acquisitions is the single goal of maximizing shareholder wealth, regardless of the size of the business. This wealth maximization must occur both in the day-to-day management of the company and in the long term through tactical decisions. A well-executed acquisition or merger will increase the profits earned by increasing sales revenue and reducing costs. It could also place the company in a position of strategic advantage over its competitors that will allow it to add value by leveraging the opportunity of that advantage to increase profitability. Role of Managers in Successful Mergers/Acquisitions The scope of a manager's organizational behavior goes beyond outlining strategies for the operation of the organization and can extend further during and after acquisitions to extend financial benefits. The manager has an important responsibility to develop a leadership plan keeping in mind the human elements that arise from such mergers. To create this balanced equilibrium, the manager must use organizational behavior transition strategies to maintain the organization's vision and goals while motivating and achieving better individual performance. Arkin, (2003) shows that, involving human resources professionals in the early stages of a merger or acquisition is critical to helping employees adapt to change. Kitching (1967) emphasizes the importance of installing “change managers” to manage critical areas that need change to accomplish acquisition tasks. Kitching highlights the importance of change management efforts on control in the post-acquisition period. In recent times, mergers and acquisitions research takes into account not only control-based value creation butalso a variety of integration processes through which such synergistic benefits can be realized (Hitt, Harrison, & Ireland, 2001). Gadiesh et al (2002) identified a range of leadership characteristics that could be associated with successful merger and acquisition outcomes. These characteristics are decisiveness (closing the deal), serving as a symbol and creating momentum (crusade for the new entity), fostering a sense of focus (establishing and communicating the strategic vision), motivating organizational members (cheering for the troops ) and provide key cultural and operational guidance (capturing change through integration). Managerial skill must be an unspecialized propensity, and the leaders of the acquiring firm must be men of far greater talent than those of the absorbing firms. In the context of mergers and acquisitions, managers create “responsible others” (Galpin and Herndon 2000). as Clemente & Greenspan, (1998) write, "These leaders make concrete" the mutual responsibility of all employees, but warn them and bind them to the responsibility of all others. . .this will create a social conscience".The case of BMW acquiring RoverIn the case of BMW (Gould, B 1998) acquiring Rover for 800 million highlights the importance of managers and effective human resource management in mergers and acquisitions. BMW was easily able to gain entry into a new market segment without compromising its niche and high-end market segment through the acquisition of Rover. The main reason that led BMW to purchase Rover and Land Rover is that BMW does not have a Land Rover team SUV So it was a long term investment by BMW Even the products and quality, although better, needed help and BMW did not think about acquiring Rover, as it was too small to survive on its own The most fundamental objective was the enhancement of shareholder wealth through acquisitions aimed at accessing or creating a sustainable competitive advantage for the acquirer. Such an advantage had to arise from economies of scale, market power or access to unique strengths, as BMW did through its acquisition of Rover for example. able to offer a wide range of cars in each category. Successful acquisitions are distinguished from failed ones along a number of dimensions, ranging from pre-acquisition planning to post-acquisition integration management. Haspeslagh and Jeminson (1991) contrast two perspectives of the acquisition decision, defining the rationalist process and the organizational one. The rationalist view is based on a hard economic, strategic and financial evaluation of the proposed acquisition and estimates the potential value creation based on that evaluation. In this case the aim of the acquisitions was to create competitive advantages, strengthen its position on the markets and achieve the creation of strategic value. BMW/Rover are an example of unsuccessful acquisitions. Despite ambitious plans for Rover's future, Rover failed to make any profits until 2000 due to a £500 million-a-year investment program in the UK. BMW experienced financial difficulties after acquiring Rover. Robert Hellar writes: "BMW invested 0.8 billion in a company that was ultimately reporting a loss of ,000 a year." and understanding the cultural nuances of the acquired company. Making a successful acquisition requires all three phases of the acquisition process, namely preparation, negotiation and post-acquisition integration, and should be considered an interrelated process. BMW was keen to acquire Rover to create a range of products. BMW was not.