An Analysis of Synergistic Mergers With Reference to the Takeover of Volkswagen - Essay Example

The questionnaire for the interviews was evolved based on a study of the extant management literature on the subject. This researcher observed that prima facie, a large number of references in the management literature deal with the motivations, mechanics, and guidelines for achieving the objectives of ‘M & As’ per se.References to the automobile industry were few and far between. A possible reason for this was apparent from a research study published by scholars in Groningen University, which brings out the relevance of organizations’ R & D intensity to the use of ‘M & As’ as a growth strategy.

It is the fond hope of this researcher that the present study ever so humbly extends the available literature on the subject and also inspires further studies. Management literature recognizes ‘M & As’ as an important corporate growth strategy when organizations reach the limits of organic growth or in the context of globalization and opportunities available worldwide.However, when management literature refers to ‘M & As’, it also includes alliances, acquisitions, mergers, and takeovers with variations like hostile takeovers.

The objective of all these processes is to create a larger and financially more powerful company. Even at the global level M &As have increased in number and scale phenomenally since the 1990s. Businesses use them to consolidate in their search for scale economies, to increase their global reach and competitiveness, acquire competencies, or new technologies and convergence of services. There have been four phases of global M & As beginning with the latter part of the nineteenth century and the fifth is currently underway.

M & As worth $ 1trillion were concluded in the USA alone during the first half of 2007 and more than @ $ 3 trillion globally. There has been increasing consolidation in the automobile industry to beginning with the late 1990s because of increased costs of production, reduced profitability, increased consumer demands for quality and efficiency, and increased demands from the regulatory agencies to produce fuel-efficient and low emission engines.