Modern Finance - Coursework Example

The management style and organisation culture are the main factors in determining the ways of growth. The organic growth involves internal improvement of organisation. Internal improvement includes the achievement of core competency that leads to develop competitive advantage in the industry. Organic growth is a long term process where the growth rate is comparatively low. In case of inorganic growth, company aims to achieve higher success within a short period of time. Inorganic growth can be achieved by merging or acquiring other companies, strategic alliances etc (Indian Council for International Amity, n.d.).

Inorganic growth is the latest trend of the business world. Increasing competitiveness raises demand for inorganic growth. Merger and acquisition (M&A) is the most desirable approach in inorganic growth strategy for a company seeking rapid growth. Mergers and acquisitions are different concepts. According to Zeng, “merger is term used for companies and similar bodies rather than assets and liabilities” and these two companies joins together and becomes “a single indistinguishable whole” (Zeng, 1999, p.19). In case of acquisition, “ownership passes from one person to another” as an acquirer company completely takeovers an acquired company.

(Zeng, 1999, p.19) This paper will attempt to deal with the merger and acquisitions and its various aspect. In this process, the reasons behind the M&A and its influencing factors will be analysed. The process and issues in M&A will figured out with proper example. The impact of M&A on the business environment will be discussed pointing out its positive and negative effects. Before focusing on the motives of mergers and acquisitions, it is necessary to analyse the growth oriented corporate strategies of organisations.

An organisation must decide its ways of growth. In order to achieve higher market share and profit, and to become the market leader, an organisation tries to growth in an inorganic