Blog 8

Out of chapter 11 and 12, I found three very interesting sections: Performance of Alliances, Motives for Acquisitions, Performance of Acquisitions. These three really seemed of great value for the future managers of the world. The idea of Acquisition can sometimes been seen as the big fish eating the little fish.
Focusing first of the performance of alliances, there are four factors that influence alliance performance. These four are: equity, learning and experience, nationality and relational capabilities. To be honest, I was surprised but thrilled to see learning and experience on the top four. Sometimes people get so enveloped with money and power that they forget the true ideal of life: knowledge. Getting the experience and learning from the success of others can make you stronger than any amount of money. Many times it is knowledge that brings people to these high positions and in turn make the money they've always dreamed of. Really think about it, you don't see to many young CEO's. As you grow older, you grow wiser-well I hope that's the case. Otherwise we maybe in big trouble.
There are many motives for acquisitions. The top three is synergistic, hubris tic and managerial motives. All pretty big words, but all common sense ideas. A favorite of this section would certainly be managerial motives. This very theme leads to many ways the economy has been terrible. When managers start putting their desire for power, prestige and money- it hurts the economy. Big Time. There needs to be a drastic change and the focus needs to be on the company and it's stock holders, not what a Christmas Bonus should be. If managers start thinking the way they need to they can hopefully get the economy back on track.
Finally, why do 70% of acquisitions fail? Performance has a lot to do with it. Again, we can turn back to managerial motives and hubris. Pride can be good, but there is a difference between pride and overconfidence which can lead to many bad things. Another way acquisitions fail is simply because firms do not analyze organisational fit with targets. It all boils down to what your target market wants. The incredible statistic that 80% of firms don't do their research certainly leads to 70% of acquisitions failing.