A consultant’s report
Consequence of Mergers

The Dexel Company is a computer hardware manufacturing corporation based in Portland, Oregon in the Unites States. They made $25 million last year distributing computer parts throughout the northwest. They employ 120 people in their offices and distribution warehouse.

Through their on line purchasing activities, Dexel has been experiencing exceptional growth in the last few years, but they are now threatened by a competitor in the area.

To out maneuver the competition they have decided to expand their activity by merging with a company in the southeast of the United States or more specifically in Jacksonville Florida. This will give them a larger presence and better protection against the threat. This way they will better serve the east coast and the southern states of Texas, Georgia, and North and South Carolina. Another advantage of the merger is the ability to reduce costs by streamlining logistics activities and by giving the group a stronger position in supplier negotiations.

The amalgamation will have a profound affect on the structure of the company. Several of the staff members have been concerned and have approached their managers to find out how this will affect their positions in the company. It has been a very difficult task to decide on how they are to redistribute the resources and who will be doing what. This has brought up questions from the staff mostly concerning the new structure.

The executive staff has met to decide on this very point. As one might expect, there are several positions that are being made redundant, including positions in marketing, purchasing, logistics and HR. Two senior executives will also be asked to leave.

These are difficult decisions to make but it will also protect the other 120 positions and more with the merger.

Peter Longhorn
CEO Dexel Corporation