Risk Identification:
One potential, unforeseen risk that could occur is overall lack of communication and
transparency. Something that could affect this is technology, communication is key when
negotiating, and it shouldn’t just end after that stage, communication should increase even after a
deal has been struck. More importantly, everyone needs to be involved when a deal has been
signed, keeping employees updated with what is going on is very important, we are trying to
showcase that we are a a good deal, we have what it takes to enter this field and we can help
expand this new company that is acquiring us. Below is a graphic that illustrates how lack of
transparency and communication can effect this merger and acquisition if we aren’t open and
honest about what is happening, we don’t want our employees in the dark on this.
Another risk that I have identified is unforeseen market disruptions. Seeing how the
ongoing pandemic has effected each market is something that can prove that this could be a
disruption. Anything could cause delays in the merger and acquisition market, and those delays
could have significant impacts on the economy. Taking a look at past market disruptions can help
us better prepare for something big to happen again, doing this can also help us relearn lessons
that were taught during that time, having sound decision making skills will also help navigate
through something like that.
Risk Evaluation
Something like lack of communication can happen at anytime, not keeping employees in
the loop of what’s going on can be disastrous. As I mentioned before low morale, low
productivity and employee turnover can make us look bad in the eyes of the company we are
being acquired by, discussion the M&A sooner rather than later is key, as soon as something can
be said internally it needs to be done. When leaders are engaged with employees about the M&A
can result in a smoot transition for everyone involved. The potential risk for this problem is
medium.
For unforeseen market disruptions, something like the 2008 recession can very much
happen again, the potential risk for this issue is high. Being prepared for something like that and
learning from past mistakes can save everyone a headache, “Continuous M&A study,
professional development, and discussions with other practitioners can help you navigate
unforeseen market disruptions and the impacts they can cause, which will, hopefully, mitigate
their overall negative impact on your business” (Lewis, 2022).
Risk mitigation
Lack of communication is easily avoidable. Being transparent with employees is key,
people need to feel that as a leader you are being as open and upfront with them as possible, no
one like to find out bad news from a third party. Building trust is something that can help as well,
letting employees know that they can come to you with any question or feedback will keep good
employees. Being able to communicate is a great skill, as a leader you are there to guide your
employees and without communication that can’t happen, lack of communication can lead to
disastrous events like lack of productivity.
Acts of God, such as hurricanes, tornadoes, and flooding is something that can’t be
prevented, the only thing that can happen is being as prepared as possible for anything, as for the
rest of the unforeseen market disruptions these are something we can definitely prepare for.
Keeping up to date and taking note of what went wrong and how to avoid an issue is a good start.
Reviewing the major turning points in the current pandemic and the 2008 recession and help
weigh out any impacts and therefore help us prepare for any risks in the future.
References:
Flavin, R. (2018, March 8). Five Ways that Poor Leadership Communication Drags an
Organization Down and How to Fix it. Linkedin.Com. Retrieved February 12, 2022, from
https://www.linkedin.com/pulse/five-ways-poor-leadership-communication-drags-down-
how-ron-flavin/
Lewis, M. (2021, November 11). 10 Most Common M&A Risks and Ways to Mitigate Them.
Dealroom.Net. Retrieved February 12, 2022, from https://dealroom.net/blog/mergers-
and-acquisitions-transaction-risks-and-ways-to-mitigate-them
Mergers & Acquisitions: the Importance of Internal Communications. (n.d.). Smarp.Com.
Retrieved February 12, 2022, from https://blog.smarp.com/mergers-acquisitions-the-
importance-of-internal-communications
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