Discuss the benefits and drawbacks of mergers and acquisitions. Consider the social and economic effects on the various stakeholders.

It is obvious that Mergers and Acquisitions (M&A) create hundreds of company opportunities that offer significant value to the world economy. In recent years both corporate executives and academics in many disciplines drew considerable attention to the subject of M&A as a field of study. The need of adopting and managing the most appropriate M&A procedures, in today's worldwide environment, is increasingly being recognized. Moreover, contemporary, and ancient literature on these processes recognizes the importance of sustainable development as a precondition for success. This theory is adopting in worldwide by the banking area, commercial, and IT markets. There are numerous mergers in the history of M&A between the thousands of the world's largest and most successful businesses like Daimler Chrysler, Pfizer and Warner-Lambert, Punjab National Bank, and Oriental Bank of Commerce. Some arguments, however, doubt M&A advantages and stress too many companies that could not achieve the anticipated outcomes. Mergers and acquisitions have given quality to the business market, bring the new revolution of technology and build up healthy competition between the business rivals (Leepsa and Mishra, 2012, ). Mergers and acquisitions are directly related to the globalization of business (Faulkner and Teerikangs and Joseph R, 2012). Overall, Merger and acquisition are creating business growth opportunity for both small and large organisations. With the help of social and economic factor companies are adopting different cultures and making their share size large in business economy. The most important advantage for companies is either it is a merger or acquisition, the company’s number of shares and the value of shares increase in the business market (Leepsa and Mishra, 2012). Moreover, economies of scale are another main benefit for companies. Economies of scale-like, when companies start to do work together their profit also goes up and it also enhances the chances to access more capital. Merger and acquisition also reduce the cost of production, cost of raw material, for companies and company owners, have more opportunities to get chances for better bargaining with the company’s product/service distributor. But it has always been noticed that bigger companies get more profits as compared to the small companies (Faulkner and Teerikangs and Joseph R, 2012). There is no doubt that mergers and acquisitions always encourage the organization for healthy competition so that companies can become more competitive, can adopt new technology, and having competition in the same services always give motivation to owners to make some changes as per clients. It also helps to increase the profit. For example, a number of companies are entering the plant-based meat market but when P&G and Nestles entered into this business. At this time, many businesses were failed or face losses because of the competition in the same services. On the other hand, competition between the same services is also beneficial for consumers because they have choices to buy the best product/services at less cost. Apart from this, when two or more two companies come into a merger or acquisition deal, they also get access to the company’s skilled staff. It is very beneficial for companies because the employee always has a great quality of knowledge related to their work or even sometimes, they also have great ideas about the relative business sector as well and this helps to get maximum output from employee. Furthermore, it reduces the company’s expenditure which they might spend on maintains of production services, raw materials and many more. It also reduces the cost of the market share budget because both companies agree to share this amount. In addition to this, it also helps increase the purchasing power of the company’s head (Wasieleski D. & Weber J. (2017)). In addition, mergers, and acquisitions (M&A), always be helpful for companies to access more customers as compared to previously when they are not into this bond. To achieve their target business growth, companies can also use other company’s (acquire company) distribution resources to hit the right area of the market and get maximum customers for their product or services. When two companies are in the market with the same services or product, they always compete with each other so that they can get maximum profits or customers. But when these two companies come together in the market, they start to do work more efficiently because they are both well known to the local market and can hit the market by using the best strategies to hit their target. On the other hand, when two companies join their hands together to do work in the future is a merger and during acquisition, if the company hires the takeover company’s staff, the company will face difficulties because of internal competition between employees. By doing this, the company may have extra work in some departments which will be an indirect extra burden on the company’s budget. it is not that only companies, staff, their management are affected with the deal of merger and acquisition, but it can also put some effects on the shareholders and consumers. Companies have a monopoly after the M&A, this result leads to less profit for shareholders, and consumers may face some financial difficulties. Some problems that can be faced by the consumers like high cost of products for consumers, companies can reduce the quality of the product after monopoly, diseconomies of scale, less choice for consumers, companies can do less investment to increase the efficiency of their services. On the flip side, shareholders can also get affected by corporate leadership, when companies have M&A activity, it reduces the competition between the companies in the business market and forms an influential and corporate entity, in this company may face a non-competitive position in the market and this may lead to decrease the share prices and it put a direct effect on shareholder and they will face loss. Apart from this, shareholder’s position can become less strong after the M&A, companies can reduce their participation in the new decision, and in some cases, they have powers to reduce the share of profit which is not good for the shareholders. In modern times companies are combining in a large number. Executives are passing mergers and accusations along with joint companies to achieve value creation with the help of acquiring technologies and product and access in the market along with the creation of economy and the establishment of the global presence of the brand (Bettinazzi and Zollo, 2017). As a notable result of cultural influence on belief and actions of people, it might change their point of view and participation in a particular activity be that the company or any activities associated with the same. Society highly depends on the cultural differences among people and the impact of the same upon their behaviour and participation (Tong, Wang, and Xia, 2020). As a result of mergers or acquisitions, different companies starting to watch together, and as a result different cultures in the form of the market they are serving will also merge. In this case, the stakeholders belonging from different markets have to deal with the sudden changes associated with the culture of the societal environment which puts a notable impact upon their behaviour, be it buying behaviour or relationship with the business. On the other hand, there are also other significant effects of the merging of two companies that affect their business practices. As a result of cultural and societal differences, the style of decision-making might change (Schmeidl, 2019). It has been studied in management that, different organisations from different societies and cultures, follow a particular leadership style that might be dictatorial and concerted that highly depends upon the culture, they are practicing in. As a result of merging and acquisition a change in the adoption of leadership style will be generated and that will result in turnover among the workers objecting to the given change. This observation is specifically relevant for the top talent that tends to be the most mobile and effective employees of the organisation which will affect the organisational productivity. And in this case, depending upon the change in leadership style which has resulted from the cultural change might result in the loss of top talent of the organisation. In which it can be identified that this particular change is bringing a notable societal impact on the stakeholder body strictly associated with the employees. Change management generally differs from culture to culture, and it is considered depending upon the society in which the organisation has developed itself (Routledge and CRC Press, 2021). However, when the given organisation is merging with another organisation belonging from another society, significantly, the change management procedure will not be followed the same as before. In this case, it will be certain that the organisation will need to adopt new change management which will affect the group of employees from both organisations. Talking about societal change will undeniably involve the management of cultural differences within an organisation. Studies have proved that cultural differences do not only affect the productivity of the organisation, but it also puts an impact upon the relationship between the employees and how they work together as a team. Similar to the leadership style and change management procedure, the method for managing cultural differences will also differ depending upon the organisational climate. With the merging of two companies from different regions, there might occur an intercultural concern against change management and leadership practices. On completion of merger, the stock price of the given new organisation usually seems to be exceeding the given value of each of the organisation as it used to be before the margin stage. It has been studied that the primary group of stakeholders who get significantly affected by the merging procedure can be identified to the employees and shareholders along with the lenders. Stakeholders in an organisation can be divided based on their legal and economic rights and in this case, it can also be divided depending upon the position and the power to the social network and economic situation of the company. Driven by globalisation of competition, technology-based turns of events, and economic or key concerns to typical development, consolidations and acquisitions have significantly become the essential methods by which numerous organisations throughout the planet are rapidly endeavouring to develop incomes (Miskiewicz, 2017). It is turning into an everyday challenge to stay aware of new contenders, mechanical leap forwards, and always requesting and modern clients. It is generally reported that consolidations and acquisitions are the essential strategies for solidification for fast corporate development and development. Many studies have unveiled that the two terms conversely regardless of the conventional differentiation that has been drawn between them which has been generally thought to be as to some degree dubious. The two terms are utilised to allude to exchanges including the blend of two free firms to shape at least one usually controlled substance where a difference in control happens through an exchange of possession. The financial proportions or ratio associate with the obtaining bank in this regard is generally examined for the last year going and coming two years after the merging. The pre-and post-the merging execution factors for the blending banks will be additionally contrasted with a benchmark group (Econwpa. ub. uni-muenchen. de, 2017). The benchmark group will be chosen dependent on the characterisation of banks in Lebanon. In this way, proficiency and execution of the consolidated element will be contrasted and different banks that are comparative as far as extent. In the considered structure the principal inspiration driving the merging and acquisitions is the improvement in effectiveness regarding cost and benefit too. In summary, there is no doubt that mergers and acquisitions are becoming an important part of the business area. In the modern era, global business has more competition as compared to previous working style and the number of mergers and acquisitions are increasing rapidly which has put companies to create new kind of working technique and has to accept more challenge. All this has made the business world is demanding and now organizers of the companies are trying to collect the different cultures, operations, strategies, and techniques under the same roof. Because of this, a number of companies have started to do work together. Apart from this, it leaves negative and positive effects on the workers which are related to the companies. The employee can lose their job during merger and acquisition however companies can get stronger positions in the business economy. There is no doubt that mergers and acquisitions are becoming an important part of the business area. In the modern era, global business has more competition as compared to previous working style and the number of mergers and acquisitions are increasing rapidly which has put companies to create new kind of working technique and has to accept more challenge. All this has made the business world is demanding and now organizers of the companies are trying to collect the different cultures, operations, strategies, and techniques under the same roof. Because of this, a number of companies have started to do work together. Apart from this, it leaves negative and positive effects on the workers which are related to the companies. The employee can lose their job during merger and acquisition however companies can get stronger positions in the business economy.