Sports and Entertainment Management - Case Study Example

Both companies had huge fixed costs to cover and working in their own capacities was proving insufficient to cover those costs. The decision to merge was brilliant as far as the financial performance is concerned. However, there were a myriad of issues to be dealt in this concern which were not easy to negotiate. Firstly, this was an undeniable fact that the two companies had been in a bitter competition over the past few years. There had been a feeling of animosity and it was not easy to get rid of it.

Further, their policies and philosophies revolved around the same competition and their efforts had, so far, been largely oriented towards outdoing one another. Therefore, not only is there a need to merge their philosophies, there is also a need to create new philosophies according to which the amalgamated company was to work. However, the key personnel of both companies is mature enough to keep their eyes on the bigger picture. If the merger was the best solution to satisfy their profit motive, they were prepared to go to the full distance.

Secondly, Mark Redmond, the president and CEO of the new organization, has to make some big decisions regarding the staff. Redundant staff from both companies is to let go. At the same time, it is to be made sure that some of the staff, which is too essential to lose, is to be retained. It is natural in a merger that some employees prefer not to continue in the merged organization. It is probably because as soon as the news of a merger starts floating around, employees start a job search with more diligence than they normally do.

Some of them even succeed in getting better job offers. There are certain employees that groom within a particular company and come to know about the operations of the company inside out. The element of acclimatization is too important to disregard. Such employees are too valuable to lose because new employees may come at the cost of valuable time. Further, it might take some additional cost to train the new employees. The merger in question is facing similar issues. They have to retain and integrate the personnel from the different companies.

Integration is, of course, not an easy task either. The staffs had traditionally worked against each other and now they have to be harmonized. In this process, there is a great chance of losing momentum and having inconsistent standards. This in turn could have more adverse affects on the relationships with clients and the employees. Further complications arise when it comes to remunerations. While the remunerations at both companies for the respective staff were almost identical, XM Canada also had provisions for share ownership, options and change of control.

This difference in the two companies was probably due to the fact that XM Canada was established as an independent company unlike SIRIUS Canada. This means that the remuneration scenario requires some serious decisions to create such a system in which all employees are remunerated equally. Therefore, it can be seen that there are a lot of difficult things to manage during mergers. The companies in question belong to the field of radio broadcasting in Canada. They had significant differences in how they did their work.

Their individual efforts had proved insufficient in the past and this is the primary reason of this merger. For instance, at XM Canada, the communication system was capable to develop the Canadian content for broadcast. On the other hand, SIRIUS Canada depended partly on Slaight Communications, who were also their investors, and partly on Canadian Broadcast Corporation for Canadian content. Further, XM Canada had developed and maintained its own communication and