Mergers and Acquisitions...

Mergers and Acquisitions An organization may grow its operations either by internal expansion or by expanding externally. In the case of internal expansion, the organization grows gradually over time in the normal course of its operation, through acquisition of new assets, advancement of technology, replacement of the technologically obsolete equipments, and addition of the new lines of products. On the other hand in case of external expansion, the organization acquires either a running organization or a unit of the running organization and grows overnight through corporate combinations. These combinations are in the form of mergers, acquisitions, amalgamations, and takeovers and have become important features of organizational restructuring. These combinations play an important role in the external growth of the organization. Besides the external growth, these combinations also take place because of the marketing strategy of the organization. Mergers and acquisitions (M&A) is a general term which is used for the consolidation of organizations or the assets. The terms ?merger? and ?acquisition? are often uttered in the same breath and are used as though they are synonymous, but both of these terms mean slightly different things.  Over the past decade, M&A have reached unprecedented levels as organizations use corporate financing strategies to maximize shareholder value and create a competitive advantage. ?One plus one makes three? is the equation and the special alchemy of a merger or an acquisition. The key principle behind taking over another organization is to create shareholder value over and above that of the sum of the two organizations. Two organizations together are more valuable than two separate organizations. This is the main reasoning behind M&A. This rationale is particularly attractive to organizations when times are tough. Strong organization acts to take over other organizations to create a more competitive, cost-efficient organization. The...

Management of Financial Resources for Sustained Success...

Management of Financial Resources for Sustained Success  Financial resource is a very important resource which an organization needs not only for its functioning  but also for its sustained success. For this purpose the organization need to have systems in place that help it to both fund its ambitions and also to manage its financial resources in support of its daily operations, including funding for improvement activities. Normally financial controls are applied by the management which enable it to take a proactive management position in the business. The three most important financial controls are namely (i) the balance sheet, (ii) the profit and loss statement, and (iii) the cash flow statement. But the management of financial resources is much more than the exercising of the financial controls. The management of the financial resources is an important function of the management in the organization. This financial management starts with the financial planning. Financial planning is a continuous process of directing and allocating financial resources to meet strategic goals and objectives. The output from financial planning normally takes the form of budgets. Financial planning works from the strategic and business plans to identify what financial resources are needed to obtain and develop the resources to achieve the goals in the two types of plans. Typically, financial planning results in very relevant and realistic budgets. Financial planning normally starts at the top of the organization and has basically two components namely (i) planning for operations, and (ii) planning for financing. Operating people focus on production and sales while financial planners are interested in how to finance the operations. Financial planning is the process that encompasses both operations and financing. In a normal organization, typical financial functions within an organization are a host of the accounting activities such as...