In this article, Daniel Michaels (2012) discusses the possible merger of two companies, namely European Aeronautic Defense & Space Co (EADS), and BAE Systems. In particular, the author argues that such partnership can be beneficial for each of these organizations since in this they will be able to overcome their strategic challenges.
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Moreover, it can affect other companies that operate in the international defense industry. The paper is aimed at discussing the themes and questions that Daniel Michaels has identified in this article.
First, according to the author, the merger of EADS and BAE Systems can be mutually beneficial for these companies. For instance, EADS can get access to the new technologies that BAE currently possesses (Michaels, 2012, p. 1).
Additionally, these organizations will be able to reach new customers, especially those ones, located in the United States. Furthermore, the financial stability of these companies can be improved.
Daniel Michaels points out that the merger can increase the competition in the defense industry, for instance, the such a corporation as Boeing will have to face a more powerful rival (2012, p. 1).
Finally, Daniel Michaels notes that this new alliance can decrease the pressure of political institutions on both BAE Systems and EADS.
Overall, the author emphasizes the idea that the U.S. market will be most important for the newly formed company. These are the questions that Daniel Michaels examines.
Overall, Daniel Michaels’ arguments are based on the premise that the partnership of BAE and EADS can improve the core competencies of these organizations.
However, scholars also note that in such cases, management should reconcile their different cultures and business processes existing within companies (Carleton & Lineberry, 2004, p. 77).
Thus, this merger can give rise to unexpected difficulties. Therefore, it is necessary to find ways of coordinating the work of various divisions and departments. This is the main problem that should be addressed.
Furthermore, in his article, Daniel Michaels discusses the influence of governments on this organization. To a great extent, this merger is supposed to decrease the political pressure on both BAE and EADS (Michaels, 2012, p. 2).
Yet, Richard Bitzinger (2009) points out that the companies, related to the defense industry cannot be fully free from political influence since they may serve the interests of states or alliances (p. 243).
For example, Daniel Michaels notes that American government can object to the operations of the company in the United States because the merger can affect local manufacturers (Michaels, 2012, p. 2). This is why one should not overlook the complexity of political considerations and the goals that local governments may try to achieve.
Overall, the article written by Daniel Michaels provides helpful insights into the peculiarities of the modern defense industry. First of all, the companies may find it difficult to get access to new markets. Yet, they are also affected by political pressures and decisions of local governments.
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By merging with one another BAE Systems and EADS can become one of the most important players in the industry. Yet, they should be aware of the fact that merges require the reconciliation of different organizational cultures and managerial approaches.
Finally, the management of the newly-created company should remember about the possibility of political pressure and hurdles that can be put by various governments.
Bitzinger, R. (2009). The Modern Defense Industry: Political, Economic, and Technological Issues: Political, Economic, and Technological Issues. New York: ABC-CLIO.
Carleton, R. & Lineberry, C. (2004). Achieving Post-Merger Success: A Stakeholder’s Guide to Cultural Due Diligence, Assessment, and Integration. New York: John Wiley & Sons.
Michaels, D. (2012, September 13) Defense Deal Would Roil Industry. The Wall Street Journal, pp. 1-2.