Wells Fargo and Wachovia Merge - Assignment Example

Two Financial Giants Merge Two financial giants, Wells Fargo and Wachovia merge, with a $15 billion acquisition of Wachovia by Wells Fargo. With the two companies previously having been financial giants, the result was the second biggest bank in the United States. Mergers occur from either two firms that are of the same size coming together with the aim of strengthening themselves, thus acquiring a competitive advantage over other firms in the industry. A merger could also occur from an acquisition of a smaller firm by a bigger firm, as it happened in the case of Wells Fargo and Wachovia. Various factors facilitate the formation of a merger between two organizations. While it gives the organizations the strength to compete against other firms in the industry, it also brings in more expertise into the firm, increasing their productivity and output. There is increased quality of services and innovation in a merger. When the two financial giants merged, there was an increase in synergy, which is the reduction of duplicate departments, lowering operational costs and subsequently increasing their revenues. In a merger, there is increased market share, resulting from the absorption of the competitor, thus reducing the level of competition between them the companies. A merger reduces the level of taxes remitted to the authorities, as the merger remits tax as a single business entity. However, as the giants seek to merge; several issues require ironing out to avoid a crash of issues. Through the process of creating a merger, “management of software/processes for processing of information for effectiveness of organization” is an important factor to put into consideration. There is more to the creation of a merger between two financial giants than the listed advantages. Although the financial culture consideration is one of the most important factors for these giants, considering their IT cultures is equally as important. Among the factors to put into consideration is the type of the IT approaches the firms maintain. One could have a decentralized policy, while another could have a centralized policy. IT plays a big role in information integration, which strategically differentiates them from the competitors. In order to deliver their brands, banks heavily rely upon their It structures. After a merger, one of the firms has to consider adopting IT policies of the other firm. Alternatively, the two firms could decide on the creation of new IT policies. Through IT integration, financial firms try to select and implement the best application existing in the market. The search is not confined to the bank that already used the application. The biggest concern is the applicability and the suitability of the system in the resultant business. As the team searches for this particular application, they should show more concern for the customer retention. During the merger process, systems have to change, as some become inferior and others less effective. However, during this important process, it is necessary to ensure that members keep on receiving their services. The transition process should not negatively influence the quality of services provided to the customers. Although a system could appear to be superior to the other due to its capacity, it could provide lower quality services to the customers. How best the transition team handles this effect determines the success of the merger process. It is important to note that as the financial organizations seek to create a merger; these processes pose the biggest danger to the success of such a merger. Not only does the process affect customers, employees too are negatively affected. For instance, it could affect employee productivity and service delivery. Adapting a new application essentially translates to fewer skills in its operation. Training could solve such an issue, though with little certainty. How well the employees respond to organization change is the biggest determinant. Poor response leads to poor application performance, creating more issues in the merger. In such a situation, providing the employees with support on all the applications would significantly solve the entire problem. However, a positive reaction translates into a successful merger. The biggest concern for the merging firms is proving a level of service demanded by the customers. While one bank could have mobility of its customers as its major concern, integrating this with the other firm’s customers would promote a smoothly operating application. From the discussion, it is possible to conclude that when Two Financial Giants Merge, they have to consider their “management of software/processes for processing of information for effectiveness of organization.” Failure to do so leads to poor performance and service \delivery to the customers. 2. “Who Is Minding the Security Store?” Security of personal computers is arguably one of the most important things that o9wners, both individuals and corporates most put into serious consideration. Antivirus updates ensure that a computer remains free of security malware all the time. Although protection is very important, it could pose a disaster in some instances. Taking the case of McAfee into consideration, its effects were felt; lightly in some organizations band rather deeply bin others. The issue led to the crippling of certain operations in various organizations and instructions, some so crucial for human survival like hospitals and others very important for security. Due to an update of their antivirus in April 21 2010, MacAfee identified Windows file for the computers using Windows XP as a virus. As their policy, MacAfee updates their corporate customers on daily basis. As such, the incidence occurring on April 21, 2010, intended to detect and destroy W32/wecorl, a minor threat to the personal computers. Mistakenly though, the antivirus detected a crucial file, swchost, a crucial file in Windows XP Service pack 3. The antivirus, on detecting the file as malicious software, immediately quarantining it and after updating the antivirus and rebooting, the computers would not start. Instead, the computers crushed and rebooted repeatedly. Additionally, most of these computers lost their network capability, while at the same time some could not recognize their USB drives. Since the recovery process required the reinstallation of the svchost.exe into the computer, the problem turned to a big one. With computers not recognizing their USB drives, the only option was to repair them one after another. Nonetheless, MacAfee placed on its website the necessary steps to the recovery process. Although some of the organizations got their computers up and started their operations running, most of the small businesses were had to take a few days to rectify the problem. This incidence shows various flaws in the “management of policy for distribution of data for effectiveness/efficiency of organization.” while updating of data and antiviruses in ban organization are rather an important ordeal, most managers should have a policy framework on how to handle this. Modern managers and the current managerial theories take the biggest blame for this in eventuality. Managers are pushing their IT technicians for a rapid of their antivirus updates in an effort to minimize their exposure time to new malware threats. Vendors on the other hand while responding to the delivery of their software updates, try to match the speed of the hackers and malware developers. These rapid changes potentially can contribute to mistakes from the security vendors. Even if organizations may opt to reduce the frequency with which they update their antivirus protection, they are very unlikely to do so, if the speed of malware development is anything to go by. Policies could initially have aimed at this, but unfortunately, it is impossible. The best way of managing such an issue is the development of more reliable policies for dealing with the crisis in case it was to happen. None of the organizations predicted the likelihood of such an incidence happening. There should have been a backup plan developed by these organizations for their data and information. A backup plan ensures that the organization covers itself against any in eventuality in case it was to happen. Essentially, the more rigid and reliable an organization’s data backup system is, the lower the risk of inefficiency in service delivery to the customers. Due to the destruction b of the svchost.exe in windows XP, numerous organizations had to halt proving crucial services to the customers. Initially, organizations required the use of data from trusted developers. Adhering to this policy has significantly shielded many organizations from loss of data, virus attacks or even hacking. However, it does not provide protection from potential damage posed by data and malware from trusted suppliers as it happened in the case of MacAfee. Adapting backup policies is one of the ways of ensuring organizations avoid going through such breakdowns again. Another way policy of ensuring proper management of data for effective management of organizational effectiveness would be according responsibility of updating and moving of data to an reliable expert. Such individuals have the knowledge and expertise to detect whenever a problem occurs, and can rectify it immediately. They also can give a warning on the status of a particular update. They can also implement the plan in phases, to ensure that in case the data has negative effects on the computers; few, not all are affected. This helps in avoiding grinding the activities of an organization to a halt. Read More