Strategic Change and Organization Assignment (GC01745)
Executive Summary
This report is prepared for showing the suitability of acquisition between Softbank and ARM. Additionally, the report contains the accurateness of Softbank’s staffing method. After that, this report contains suggestions to Softbank for increasing the outcomes of acquisition and staffing functions. Normally, this report gives importance to several secondary sources like journals, books, websites, and reports of Softbank and ARM. After completing this report, it finds that the acquisition with ARM is very much effective for Softbank. The financial outcomes of acquisition are higher than the purchase of a European firm. In the acquisition process, the total fund is required nearly £24 billion ($31 billion), and ARM will be delisted from the London Stock Exchange. The main of the acquisition is that Softbank uses the ARM product and distribution lines for producing and distributing the products in the market. ARM is a company of designs chips and licenses the chips for several companies like Apple and Samsung.
These chips are used in phones and tablets. In recent years data, ARM has designed 15 billion chips and most of the chips are designed for mobile devices. In the acquisition, Softbank has used the ARM chips in the Internet platforms. In addition, Softbank has used this acquisition for achieving a competitive position in the competitive market. Another reason for the acquisition is too giant the production in a cost-effective and differentiation marketing process. The staffing functions also affect Softbank’s performance. The personnel factors are related to cultural diversity, language differences along with human resource management costs. At the time of acquisition, Softbank could not evaluate the actual outcomes from ARM activities. For this reason, Softbank should apply good R&D activities to increase the financial benefits of the acquisition. In addition, Softbank should apply another reliable method of staffing to maintain the cultural diversity, language differences long human resource management costs. Softbank should follow the ethnocentric method to recruit lower-level staff. On the contrary, the top managers should be recruited through the geocentric or egocentric method.
Table of Contents
Executive Summary.
1.0 Introduction.
2.0 Evaluate and comment upon the strategic imperative behind the acquisition, from the view of Softbank
2.1 Concept and suitability of acquisition strategies for entering the global market
2.2 Challenges in international acquisition.
2.3 Rationale and suitability of acquisition strategy from the view of Softbank.
3.0 Compare and evaluate the change implications from the viewpoints of ARM, and Softbank.
3.1 Strategic view of acquisition between Softbank and ARM.
3.2 Change in organizational culture.
3.3 Strategic staffing.
3.3.1 Staffing approach.
3.3.2 Staffing approach applied in the acquisition between Softbank and ARM.
3.4 Changes in strategies of Softbank and ARM.
3.6 KPI
4.0 Conclusion.
6.0 Reference.
1.0 Introduction
Softbank is a Japanese company and ARM is a UK-based company. ARM is a semiconductor company designing chips and licensing the chips for several companies like Apple and Samsung. In the London stock market, ARM is a renowned company and its market capitalization amount is high. It is a processor and graphics technology-based company. Most of the Smartphone companies are used licensed chips from ARM (Kharpal, 2016). That is why; this company has a great potentiality in the technology market. At present, Japan’s Softbank has made an acquisition with ARM AS Holdings by £24.3 billion to cover the British Smartphone chip market and establish a good position in the technology market and their new business idea title is “internet of things”. ARM was first launched its operation in the UK before twenty-five years and the number of employees is four thousand.
Therefore, this acquisition is a larger acquisition in the technology field (Francisco, 2016). However, the profitability history of ARM is not highly satisfactory because it got $1.5 billion as profit in the recent year. The main reason behind this low level of profit was the less power of this company in the international market (Warren, 2016). But this acquisition will increase the power of both companies. But, it is also true that Softbank will face some barriers and challenges to maintain the business activities after acquisition. The challenges are related to cultural diversity, language differences, and human resource management costs. Due to this reason, this report evaluates the suitability of acquisition between Softbank and ARM to cover the international markets. Additionally, the report contains the evaluation of the accurateness of Softbank’s staffing method after acquisition.
2.0 Evaluate and comment upon the strategic imperative behind the acquisition, from the view of Softbank
2.1 Concept and suitability of acquisition strategies for entering the global market
Bragg (2014) stated that acquisition is defined as the purchase of shares or paid cash to another company and maintaining the company ownership. In the acquisition process, the other company is called Target Company. In the acquisition process, the acquired company purchases fifty percent shares of the Target Company and manages the company as an owner. Brain and Hill (2016) mentioned the acquirer company gets the right of making decisions of the target company after the acquisition. The acquisition can be voluntary or hostile way. If the target company easily agrees on the proposal of Acquirer Company, it is known as a voluntary or friendly acquisition but if not, it is known as involuntary or hostile acquisition (Bain and Company, 2016).
From the strategic viewpoint, the acquisition has several motives. Bain and Company (2016) stated that companies use the acquisition process to ensure differentiation, synergic effect, cost-effective functions, technological advancement, and high growth of shares and economies of scale. According to DePamphilis (2015), most companies use the acquisition process for launching activities in the international market. In this acquisition method, the acquirer company can purchase the share of another existing firm of another country by which the acquirer company can increase its market area in the new market and new customers’ acceptance. According to Bragg (2014), most companies use acquisition systems to increase the financial growth of the business in the target company’s market area. The growth of a company depends on the effectiveness and efficiency of the operational activities. Brain and Hill (2016) stated that most companies have faced bureaucratic, physical and resources scarcity. For this reason, these companies identify the potential existing firms to make the acquisition……………….
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