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TRANSCRIPT
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Introduction
Richard Ettenson and Jonathan Knowles break down in their research Merging the
Brand and Branding the Merger, the various alternatives which organizations and their
management can opt in the context of how to brand, a parent company and its target
company in the event of a merge and acquisition. The merger and acquisition topic has
been of great relevance due to the abundant scope of its literature which includes
strategic management, corporate finance, and organizational behavior literature (Zollo
& Meier, 2008). In additional, M&A represent massive change in the ownership and
control of resources [a] causes and effects ofsubjects of intense interest (Kiymaz,
College, & Baker, 2008) The authors of the research expose that inadequate branding
strategies can:
be a huge blunder [andthat] with no solid brand platform to work from, company integration
will often be mismanaged, and communication to key constituencies will necessarily suffer. In the
worst of situations, the relationship between the two organizations becomes contentious;
promised synergies remain elusive; employees become distrustful and disgruntled; and
customers grow cynical and dissatisfied.(Ettenson & Knowles , 2006)
But, despite the massive amount of research done, there is little or no agreement both
across and within the disciplines on how to measure acquisition performance (Zollo &
Meier, 2008). This fact has open a great debate for the establishment of a theoretical
mothod on how to evaluate acquisition performance. In this research the authors
attempt to stablish a theoretical concept using three key constituences in order to
develop strategies for the successful creation of value on the merge and acquisition of
two companies (Ettenson & Knowles , 2006). They also conclude that the success or
creating value among the merge and acquisition lies not in incremental improvements
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to existing practices but rather in the extension of the due-diligence process to include a
class of assets ( namely, corporate brands) that have hitherto been systematically
overlooked (Ettenson & Knowles , 2006). We do not completely agree with the authors
assumptions parting from the lack of empirical evidense demonstrated in their research.
Merging the Brand and Branding the Merger Overview
For this research, the authors evaluated 207 merger and acquisitions achieved from
1995 to the date of the research (approximately 2006); with valuation transaction that
were greater than $250 million (Ettenson & Knowles , 2006). In addition, for this
investigation the authors established a framework approach which involves key
constituents, and the consequences in these constituents, from management branding
decisions in the event of the merge and acquisition (Ettenson & Knowles , 2006). These
key constituents can be look as the most important components of a companys
stakeholders. The mentioned constituents include the companies: employees,
customers and investors (Ettenson & Knowles , 2006). A reason for this approach which
focus on the companies stakeholders can be that companies attempt to address the
concerns of stakeholders groups, recognizing that failure to do so can have serious
long-term consequences (Ferrell, Thorne , & Ferrell , 2010). This long-term
consequences can result in a useful method for measuring the performance of these
companies. Interviews were made with senior management of the companies
evaluated; this in order to measure the results of the merge and acquisition (Ettenson &
Knowles , 2006).
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