Merger & Acquisition Challenges in the Oil and Gas Sector
To identify some of the biggest challenges that large oil and gas companies face when merging their operations and support services in order to reduce overhead expenses as well as duplicative service functions.
- Sometimes, as a way of trying to reduce overhead costs after merging, companies might be forced to down-size.
- Other than the problem of having to let go of some employees, determining how to retain the best talent and making sure that they remain confident in their job security so that they do not leave is a huge challenge.
- In most cases, when two large companies merge, employees start to feel threatened by the changes in roles, strategies, management, and leadership. This becomes problematic because it can lead to a huge loss of workers which can eventually affect the revenue of the business.
- Since the two organizations' cultures are yet to become one, sending the right message while still respecting the presence of the existing cultures can be a challenge that leads to a lack of stability.
- Additionally, if the acquirer imposes the takeover, mismatches can occur and cause uncertainties.
- For instance, if the acquirer forces the use of new software and IT systems, the company might fail to effectively execute its operations.
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