Synergon Capital and Beauchamp Becker & Company operates in the same industry, but the geographic location of both the companies is very distinct. Synergon operates in the U.S. market, and Beauchamp operates in the U.K. Both the companies are very successful in their respective markets. Synergon mainly acquires companies, which are underperforming and their main reason for underperformance, is the poor strategies of the management. On the other hand, Beauchamp develops investment plans for their wealthy clients. The top management of both the companies is very crucial to the success of both the organizations.Particularly the managing director of Beauchamp, played a very critical role in the success of the company.
Although the industry in which both the companies are operating is quite similar.The organizational structure and culture, of both the organizations are very different from one another. There were many issues in the communication between the top management of both the organizations, along with the ambiguity on how the employees of the target company would be rewarded. As per J.J, the acquisition will only work in favor of the acquirer, if two conditions are fulfilled.The first is that, the customers of Beauchamp remains happy and satisfied.The second condition is that, the managing director of Beauchamp holds the position after the acquisition. It can be argued that, both these conditions are very rare to meet, because of the presence of several conflicts among both the managements.
The management of Synergon is keen to increase the profitability of the Beauchamp, while the senior management of Beauchamp is more focused on the satisfaction of their employees. The senior management of Beauchamp agrees to comprise some portion of profitability,in order toincrease the morale of the employees, as they consider the motivation of employees is very essential for the success of the organization. The reward systems of the employees will be drastically amended after the acquisition of Beauchamp.So, the employees of Beauchamp will receive bonuses, which will be seventy percent lower than they receive currently at Beauchamp.
Furthermore, the employee’s mess will also be redundant after the acquisition.In order to increase the profitability of Beauchamp, the redundant staff will also entitled to receive significant lower sums, which are also against the manifesto of Beauchamp. In addition to this, the informal and slang way of communication of the different personnel of Synergon, also increases the intensity of the conflicts. Mr. Julian is very frustrated, due to the increasing complicated requirements of the Synergon regarding the financial projections of Beauchamp.Which is affecting the quality of work for the employees of Beauchamp. The way of communication by the auditors of Synergon with the assistant of Mr. Julian, also makes the conflicts extreme.
The operating style of Synergon is suitable for the companies, which are under performing.Therefore, the management of those companies, lacks the ability to turnaround the performance. However, Beauchamp is not the company, as Synergy aims to acquire, rather the company is performing very well with the most competent management in the industry. The management of Beauchamp might perform adversely in the leadership of the management of Synergon.It isbecause of the fact that, they directly impose the duties and tasks to subsidiary, rather than taking their views in managing the combined company……………
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