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When two multi-billion dollar companies merge such as IBM and
PricewaterhouseCoopers, it goes without saying there will be issues in bringing the two
companies together successfully. If both companies are fully on board with the merger,
compromises can be reached to make the union go smoothly providing positive results for
everyone involved.
Primary Integration Issues
One of the primary issues of merging the two companies was integrating how the
companies were operated. Changing PwC from a partnership to a corporation involved strategic
planning on the part of both companies. The cultures and areas of expertise of both companies
had to be combined in such a way that both benefited from the others knowledge.
Each company also needed to be able to access and utilize the strengths of the other.
IBM also had to find a way to support the products and services from both companies in equal
fashion. However, a primary concern for PwC employees was that IBM would focus solely on its
own lines and leave theirs to falter (Morrissey, 2002).
Addressing Integration Issues
The first order of business was to establish a working model of operations that fit well for
both companies. Next was deciding on the leadership roles and who would assume them. With
PwC’s main asset being its people, IBM was intent on maintaining a rapport with the employees
at all costs.
IBM chose to lay off 5,000 workers in an attempt to offer key PwC employees options
that would entice them to stay with the new and improved company. Although a few of the
employees that were laid off were from PwC, the majority were from IBM. The person in charge
of the operation was essentially from the IBM side, but key leadership roles were placed in
the hands of PwC employees. This created a cohesive and productive management unit that
functioned using the strengths of both firms.
Next Steps in Integration
Once the work force was established, teams were created that focused on establishing a
model of operations that would ensure the strengths of both companies were compounded on.
Key areas of the business were brought together and integrated to form stronger more effective
product lines. Attention to detail helped to further develop the operational models the teams used
to explore new avenues of growth (β€œChallenges,” 2002).
Effect of the Expectation of Growth
With growth comes change. The larger a company becomes, the more diverse its needs
and operating requirements. The responsibility and the obligation that falls on members of
management are to help both companies get the resources they need to remain productive and
moving forward. Not only would the amount of resources the company needs increase, the stress
in managing them would increase as well.
Members of the management team may need additional training in learning how to
handle an ever-increasing workload and still maintain healthy interpersonal relationships with
other managers as well as the workforce at large. Coping with more diverse aspects of the
operational model may call for additional members of management to be brought who specialize
in certain areas.
Potential Problems
A major concern for members of management would be keeping control of situations that
occur within the general operations of a larger corporation without feeling overwhelmed.
Focusing on each problem before it becomes a major issue will help, in addition to making sure
adequate resources are on hand to accommodate any change in plans or procedures.
Communication is essential when bringing two large groups together. Making sure each
group understands the importance of communicating both differences and positive information
will help forge a cohesive working relationship between the workers of both companies. The
independent skills each group of workers possesses is beneficial to the other, if the lines of
communication remain open and are utilized to share thoughts and ideas. A breakdown in
communication can cause isolation and slow the progress the two companies are working so hard
to maintain (Shankland, 2002).
Possible Advantages
The possible advantages associated with continued growth include profitability and
increasing the overall value of the company. When two large corporations come together, their
reputations combine, where before the merger they stood alone, each on their own merit.
Combining the respect each company had gained prior to the union solidifies the strength and
power the company has within the economic markets as well as within the IT industry.
Another possible advantage that would accompany the growth and success of a merger
such as the one between IBM and PwC would be the development of such a vast amount of
technology and software that could be used for the benefit of the entire industry. Other
businesses and fields of interest would also reap the rewards of new advancements in technology.
The merger of IBM and PricewaterhouseCoopers brings together the products and the
capability of using them to their fullest potential under one roof. While each could, and did,
stand alone and remain profitable, together they can double their efforts and forge ahead to the
next level. With each company benefiting from the others’ skill and expertise, both continue to
thrive and advance while sharing resources and a knowledge base that is the best in the industry.
By facing issues head on, the management team at IBM took the best of both companies and
created one corporation with the power to change the way people perceive technology.

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