Nothing but negotiation

The Gap Partnership

Advice offered to companies completing successful business negotiations

Firms taking over another company could consider a number of different strategies.

16 November 2010

Firms that have completed successful business negotiations should consider four different approaches when deciding how much independence and organisational autonomy should be given to the acquisition in order for it to remain successful, it has been claimed.

Writing in the Strategist newsletter published by Hoey Associates, Eamon Hoey outlined the different methods enterprises can employ once a merger has been completed.

The new entity should be absorbed into the current operation if the target business requires a high amount of interdependence, he stated.

A company ought to be "established as a standalone autonomous subsidiary" if the newly-acquired company needs to remain independent, Mr Hoey added.

Alternatively, a third method is to "give each firm access to the other's strategic capabilities" in order to keep the acquisition self-governed.

The final option is to take a hold of the target as it requires "implementation of tight financial controls, limited autonomy and knowledge transfer", Mr Hoey observed.

Earlier this month, sales negotiation expert Alain Burrese claimed it is vital for businesses to always be fully prepared ahead of sales negotiations.

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