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International Knowledge Management

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Critical Evaluation of Arguments in Favor for Business Mergers

The majority of business deals in the business world aim to penetrate opponent market and enhance market dominance. The deals in 2013 were intended to fill the gap between planning of strategy and the necessary steps to counter competitors in the market. The attempt to fill the gap between the buyer need and satisfaction calls for marching with the global trends of technology, awareness about the global ethical issues and compliance with the government regulations to do business. There was rare growth of the transformational mega mergers in 2012. The essence of mergers is to seek for market penetration and dominance of the business. The mergers tend to penetrate the market and establish barriers to entry for their competitors. The biggest mergers in 2012 amounted to $20 billion. This shows a decline in the revenue estimated from business mergers. The decline is an attribute of many factors.  There is a growing concern over the slow rate at which mergers occur in the global settings. There is a need to know the essence of business ethics when managing a business in different countries. The failure of mergers to yield enough revenue is an attribute of lack of compliance to business ethics.

According to Kearney, there is an inevitable need to merge so as to remain relevant in the business world. There is sometimes unfavorable competition in the business environment. The stiff competition will compel some companies to switch to other markets with relatively low competition. The meeting and pricing policies of different companies will enable a company to have a competitive edge in the business world. The different modes of pricing are target pricing, value based pricing, psychological pricing and audience pricing. The pricing decision determines the ability of a business or company to compete favorably. The merging of industries is sometimes an inevitable decision, it will aid to penetrate and consolidate a business in areas of specialty. Globalization of industries provides companies with sufficient leverage in the business industry. Firms seek leverage so as to be competitive globally. Market penetration and presence determine success of an organization in the competitive business environment (Dieng, 2002, p.64).

The essence of mergers is to establish strong market dominance forces and effective barriers to entry for the opponents in the market. Mergers maintain the identity of the dominant firm at the expense of the other firm. It is possible to establish economies of scale once the businesses are merged ad or acquired. The merging of business is likely to expand the domestic and global networks of the merging businesses. It is the only true way to acquire cost advantages over the opponents. The common approach to the market will make it hard for the sole business entities to predict the strategy of the merged business. The mergers will create jobs in the industry of concern. Classic economic arguments are of the idea that in the event of global financial crisis, it is possible to remain relevant to address the financial crisis under a common front. It is a basis of business innovation and efficient due to the combined effort of the two businesses.

Industry fragmentation makes it hard for the business to operate as a sole entity. it will create a formidable force of competition in the global face. This is likely to create low cost businesses in relation to the cost of sole competitors. The cost of doing business is low as the players will always need to be formidable in the industry.

Business mergers have subsequently cut services to the competitors. Mergers create profitable and healthy service provision in the industry in which they operate. the industry players  have differentiated their services and or products. Merging supports innovation and development of new business trends. The majority of business executives agree that business consolidation is the only way to go in the face of high costs and global financial crisis looming all over the world today. Great amounts of revenue are being lost due to progressive losses being incurred by the sole industry players. bankruptcy iis the neew problem facing sole entties in the business. There are high immediate obligations such as fixed costs which the sole industry players do face. The sharing of fixed costs in the industry will shoulder the cost proportionately among the merging firms. Cost management is the way to address growth prospects in the present global industry. The essence of mergers is to advance the business of overlapping of markets in the industry. This will enhance switching of profits and losses. The losses in one industry will be catered for profits in the other industry. The transfer of profits to counter losses in other sets s a risk management strategy in most organizations. The merging makes the new unit to establish cost barriers for the other rival competitors to operate and sometimes is forced to leave the market to the benefit of the new merged firm. The cost of operation for the sole entity becomes too exorbitant as advertisement by the rival merger will attract the customers to switch.

The effects of globalization and financial crisis in the new dispensation of the economy are the force behind the need to merge the business so as to succeed. The essence is to absorb the high costs in the industry. The effects include political instability, inflationary pressure, mass strikes the workers, demand for harmonization of salaries and sharp fluctuation of international foreign currencies. The ignition of the mergers is to penetrate the market and eventually dominate the industry. The desire to offer quality goods and improve efficiency is a secondary desire for the mergers.

Critical Evaluation of Arguments against Business Mergers

The first critical remark is recognition and appreciation of the fact that business mergers alone will not help a business succeed. There is a need for a well-structured strategy and understanding of legal and ethical issues in different countries. Business ethics and corporate responsibility will assist the expansionary measure of a company in a given country; the divergence of consumer needs across nations will force the business to tailor-make products to suit them. Corporate responsibility will assist in building customers` loyalty toward the business brands (Russo, 2010, p.86).

Market and business leadership require observance and compliance with different business ethics and regulations. Strategic decisions are not enough to help a business compete. It is a common thinking that mergers and acquisitions are crucial in the process of attaining market dominance. There is an eminent need to focus on the cross border transaction so the company will learn business needs in other countries. Business innovations entail the use of technology so as to keep pace with significant information technology in the application of e-business management (Wimmer, 2004, p.56).

Aspiration of most organizations is to conquer and colonize foreign markets. One of the reasons why different companies fail to succeed in foreign markets is inability to value business ethics of host countries. The majority of global industries and corporations face the challenge of diverse ethical trends and differences in most countries. The discrepancy in ethical standards of different countries makes it difficult to do business and eventually a company collapses.

The decision to integrate the existing business and enter the market at once is a contentious issue. The first issue is that mergers and business integration alone will not help a company become successful. There is a need to value ethics in business sales, marketing and legal compliance. Business ethics will allow a company to defy the emerging global trends and to understand why every strategic decision of a company fails (Wimmer, 2004, p.46).

The merging of business is a complex and rocky encounter in the global context. The technological systems are very complicated a here is loss of identities of some face and growth of some other firms. Different corporate cultures and operational networks make it difficulty for the mergers to be successive. Mergers are often faced with technological errors and failure of networks. This is detrimental to most of the businesses. There is also the huddle of the sharing of the management positions. The splitting of positions will most likely create differences in the merging businesses. The structure of a merger is a complicated process. Sometimes the merging of business structures require offer to hire professional services at a cost. Non disclosure by one party leads to misrepresentation to the party. This is costly to the success of the business.

Mergers are made on the basis that one firm may be good at administration while he other firm is good at financed management. The merger of business does not guarantee efficiency operations of the company. The only motivating factor for the company is to switch clients from the rival goods providers in the market. This is not ethical for the businesses. The clients’ will move if the new merger will provide high quality goods to the customers.

According to Winner (2009), some business decides to merge basically to avoid perishing or due to fear of stiff competition. But it is true that they do not also succeed as most of the operation remains as before. Sometimes competition in the global ranks is god as the companies are forced to improve their service delivery and manage their decisions with a lot of keenness. So according to Winner mergers are run away decisions not meant for prosperity of the business. Good mergers ought to be made with the main objective of improvising the quality of goods.

Knowledge Management Challenges

The challenge of collection, organization, and subsequent passing of valuable information requires high level of information technology tactics. Most business executives and information end users do not have the requisite expertise to deal with complex management systems. The cloud computing technique among many other information/knowledge systems is still a hard nut to crack for many companies. Technology changes every day forcing organization knowledge managers to learn and search for new techniques in knowledge management. The development of complex information technology models will pose a challenge to an organization. Some computer programs used for management, like computer language computations for knowledge, are difficult to comprehend. Some employees find it difficult which will expose them at risk in regard to their job security. It is sometimes impossible for people to permit knowledge to grow in an organization (Umeda, 2009, p.76). Knowledge resides in human experiences and relationships. Building a culture of information sharing among people is a challenge for most organizations. The nature does not permit information sharing which will expose a person`s job at risk.

Internal and External Factor Which Influence the Knowledge Management Process

The factors include widespread economic uncertainties, stiff and escalating business competition, emerging ethical issues, legal issues, and frequent government policies, the declining rate of consumer loyalty, technological advancement, information security concerns, and collapse of the major businesses of the world (Russo, 2010, p.80). Ethical issues like hacking will expose confidential information of an organization to competitors. Technical, organizational, and financial obstacles pose a challenge to the management of knowledge in most organizations. Organizations develop procedures and policies, which are appropriate in protecting their property rights and interests. The compliance requirements for information sharing require the need to respect the property rights of an organization. International knowledge management is crucial if an organization wants the strategic decisions it makes to remain unpredictable. An organization is able but it should be cautious when sharing confidential information. Knowledge is an intellectual asset to a business. Collective intelligence and knowledge act as a market determinant in relation to business innovations. Business leadership and innovations rely on the efficiency in knowledge management within and outside the organization. The value of knowledge reflects major global trends in business innovations. The processes of business outsourcing and financial reengineering are the core products of knowledge management (Russo, 2010, p.58).

Global Business Ethics Challenges in Relation to International Business Management

Globalization enables nations to do business in various countries all over the world. The application of technology enhances trade and business to develop. Most multinational corporations face challenges ranging from social, political, legal, environmental, and technical issues. Some of the ethical issues refer to the extent of local responsiveness of a company.

 Consumers across countries practice diverse cultural practices. Different countries set different ethical and moral standards to be met by multinational corporations. Diversity of cultures poses a conflict of ethics across the globe. It is the responsibility of companies to strive to handle different ethical requirements in different countries (Remenyi, 2008, p.45).

Observance of laws, rules and regulations is the core objective of a multi-national corporation in a host country. Nationality ought not to be a factor for unfair treatment of workers (Dower, 2009, p.68). The desire to influence business laws in a host country is the sole aim that favors the manner in which business is conducted. Search for favors from the government sometimes may take the form of bribes. Bribery is a business malpractice and it is unethical (Ilzkovitz, 2006, n.p). Foreign direct investments and deposition of technology sometimes calls for favorable business conditions for corporations. A responsive local business environment is prerequisite for multinational corporations to do business. Some governments provide foreign companies with preferential treatment at the expense of local firms. The companies enjoy some benefits, which are not accessible to domestic firms. This is due to the perceived technological importance the multinational corporations bring to the host country (Coakes, 2010, p.78).

Bribes and some gifts to government officers are socially unethical and it is a bad norm in the country (Gurusamy, 2009, p.56). The offer tends to solicit for corporate favors at the expense of similar corporations in the same country. It is clear to note that the success of a business in China depends on the business connections with the government (Gurusamy, 2009, p.78). Some of the business connections depend on bribes and gifts to the government officials. In India corruption, bribery and gifts is a norm as it is widespread. It is seen as a catalyst for the business to thrive in the competitive business environment. It will provide a company with strong connections with the government. It is necessary to state that no corporation ought to do harm in a host country (Hutchings 2010). The harm may take the form of tax evasions, failure to participate in corporate responsibility, introduction of an inappropriate technology, and failure to comply with a country`s business regulations (Russo, 2009, p.67). It is a sign of responsibility for a multinational corporation to contribute towards economic development of a host country. The desire to respect fundamental rights of workers and advocate for good governance guarantees that a multinational corporation will make successive business (Coakes, 2002, p.67).

Ethical considerations promote success of multinational corporations in different countries. The cultural differences and diversity of consumers` tastes, preferences and fashions pose a challenge for multinational corporations operating in different countries. Favorable business environment is requisite for a business to thrive well. This does not mean bribes, gifts and other items in desire for preferential treatment when conducting business. A bribe is an ethical issue all over the world. The globalization effect of competition demands good strategic position to survive in the business world. Multicultural and different ethnicities in different countries have their own principles, moral obligations and regulations to be complied with. It is quite easy to find a company perplexed in the diversity of norms, rules, customs and practices envisaged in different nations.

 The prominent ethical issue is fair remunerations, offer of bribes, seek for government preferential treatment, compliance with business and taxations rules and regulations in the host countries. Ethical norms, practices and standards are different in different parts of the world. In some countries business connections take the form of bribes and gifts to the government official. This is a serious ethical concern for a multinational corporation (Dieng, 2000, p.23).

The Importance of International Knowledge Management

Business leadership and innovations rely on the efficiency of management of knowledge within and outside an organization. Some of the computers programs used for management, like computer language computations for knowledge, are difficult to comprehend. Some employees find it difficult which will expose them at risk in regard to their job security. It is sometimes impossible for people to permit knowledge to grow in an organization. Knowledge resides in human experiences and relationships. Building a culture of information sharing among people is a challenge in most organizations. The nature does not permit information sharing, which will expose a person`s job at risk (Coakes, 2002, p.67).

Knowledge management entails appreciation of the significant importance of practices and strategies in an organization. The process is useful for identification, creation, distribution, adoption, and representation of business experiences and insights. The concept of business knowledge is a composite of business insights and experiences in the business markets. Knowledge management organizes business objectives such as high performance, competitive advantage, business innovations, sharing of past business lessons, business and strategic integration, continuous business organization and improvement and the essence of incorporating organization learning. Knowledge sharing aids in the decisions` shaping process in relation to strategy for a business in the competitive environments. Knowledge management is a strategic asset in the enhancement of business presence and market dominance. Another crucial aspect of knowledge management is the role of ethics in relations to business innovations and sharing of information. Knowledge management promotes the advocacy of business ethics and corporate responsibility in the world of business. Corporate responsibility will aid the business to manage knowledge systems. The system analysts will not exposure confidential information regarding an organization to its competitors. It is unethical to access an organization`s confidential information and use it in fraudulent purposes (Ackerman, 2008, p.67).

International knowledge management is crucial if an organization wants the strategic decisions it makes to remain unpredictable. An organization is able but should remain cautious when sharing its confidential information. Knowledge is an intellectual asset to a business. Collective intelligence and knowledge act as a market determinant in relation to business innovations. Business leadership and innovations rely on the efficiency of knowledge management within and outside an organization. The value of knowledge reflects major global trends in business innovations. The process of business outsourcing and financial reengineering are the core products of knowledge management. Effective knowledge management will promote information sharing among organizations. It is no need of facing the same bitter experience as another company when you can learn and take precautions. Information sharing is imminent in the social media. Knowledge management is now a personal and interpersonal passion. The continuous engagement of people in corporate responsibility will promote information sharing within an organization. Information sharing depicts the essence of knowledge management in an organization setting. Knowledge is a valuable asset for any organization as information is a great resource (Barteinstein, 2003, p.67).

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