Having The Balance When Involved With Other Companies

Two companies working together could mean either collaboration on one project or product, or one company acquiring the other. In either of the cases, handling the pressure of balance is challenging.

Difficulty in such situations is not just about hurting one’s ego or offending someone. The real challenge is keeping the importance of both brands intact. Every company is known for its own specialties and letting go of one quality means losing something valuable.

The collaboration could be a temporary involvement, or permanent. There are situations, where two companies merged, but didn’t get along and separated eventually. Keeping up the originality of your business, while having good relations with the other brand needs to be handled smoothly.

There are basically four types of ways where one business is involved with the other. These are,

  • Merger
  • Acquisition
  • Promoting another business
  • Promoting your business

The first two, merger and acquisition are generally more permanent than promotional activities. Depending on how your business is getting involved, the company’s reputation is managed or changed.

Why do you need a Merger or Acquisition?

Mergers and acquisitions add value to your company. It necessarily doesn’t mean that your company should involve only if you are drowning. In modern times, there are ambitious goals within organizations. To achieve some goals on a larger scale without compromising on the quality merger or acquisition could mean there is more possibility of achieving your goal faster.

The best example: could be, during a pandemic when every organization’s goal was to keep safe and still be able to run business, which bought many businesses to come together and help each other out. The sanitation suppliers provided their support by giving bulk sanitizers to companies at a lower rate. When distancing was needed, the fello shop owner would understand and provide extra space. Currently, most shops sell Face Mask, there must be some kind of deal between businesses to have such a change.

While the above example is only a smaller action, there is usually no legal documentation involved. However, as the deal gets more personal, or when both the companies involves are large corporations, then a merger or acquisition can help settle down their understanding.

Merger

A merger is when both companies are allied together, acting as separate entities but sharing resources and a common goal. The resources can be anything that would help both the team be productive like, R&D researchers, manpower, or supply chain. One person from the company could help the other company’s team during office hours.

Acquisition

Acquisition is either your company buying another smaller company or someone else buying your company. Often it depends on how your deal is being made with the higher authority company, being aligned with large corporations like Reliance, DMart, Google, Microsoft, etc.

A merger doesn’t change your company.  However, in the acquisition, there can be many changes from a name change to employee replacement. Everything depends on how you negotiate while the acquisition happens. Many companies successfully made things happen while being under the major corporations like Google, Microsoft as subsidiaries. The need for individuality is highly appreciated in today’s world, so sometimes an acquisition is not as bad as it sounds.

“Mergers are like marriages. They are the bringing together of two individuals. If you wouldn’t marry someone for the ‘operational efficiencies’ they offer in the running of a household, then why would you combine two companies with unique cultures and identities for that reason?”

Simon Sinek

Maintaining the Balance

The balance varies from company to company, depending on what kind of company, how your company can provide to the other, and how to avail benefits. Here are some common things to keep in mind,

  • Do not rush

In the excitement of being involved with larger companies, the start-ups or small businesses forget to consider and evaluate their options. Additionally, consider what your employees think of this merger. Get any kind of information which would give you a clear idea of where your company is going.

  • Work culture

The already existing employees can find the transition difficult. Make sure that your current work culture (if the current methods are bringing results) is still intact. There is no reason for your company to be influenced by the other until there is a real need.

  • Solving conflicts

The differences are not something that can be simply erased with a motivational speech. Make sure everyone is able to communicate what they are going through. It may take time to come to common solutions when there is a problem, but with effort nothing is impossible.

  • Give credits to the deserved

The biased mindset can influence the person who is in charge. It doesn’t happen knowingly. Sometimes, the same company member is preferable for some tasks, other times the outsider looks professional. This kind of problem has created many conflicts often during Mergers. There is a Harvard Business Review case study, which means this is quite common and you can make things work despite that.

  • Be prepared to say NO, if you have to

In the end all that matters is what the other company brings to the table for your people. If there is nothing beneficial, no matter how good the other company is, you should be prepared to say NO. There are failed mergers and acquisitions that happen all the time. If there is no right company for you to merge with, then don’t make a deal. Instead, focus on your own team, take the lone journey.

Failed Mergers and Acquisitions

When the deal happens, and if by chance both companies are not able to have common ground, it is fine. There are instances when large corporations failed too. Here are some examples of failed mergers.

  • HP – Compaq (2001)
  • AOL – Time Warner (2000)
  • Tata Steel- Corus (2018)
  • Bharati Airtel – Zain (2010)

As you can see, these are popular companies, yet they had to go through a rough patch while involving with other companies.

Promotional involvement with brands

Involving with brands has a huge impact on brand reputation. When the brand with a higher reach and audience gives the lower one promotional shout-out, the impact could be huge. The higher brand doesn’t necessarily mean it is a company, nowadays there are influencers in social media who have reach and audience but not someone professional. Making a deal with such influencers would help them make money, a give the company advertisement.

This is more like a deal, usually, there are not many problems. Create a set of rules, and make sure the other brand is following them. If you are going to promote the other brand yourself, get yourself good remuneration.

Brand management

Brand management played a role only in luxury products in earlier days. However, now people care a lot more about what they are purchasing. If you are an organic store owner and you place a banner for cigarettes. Such kind of clash in objectives and your representation could lead to a bad reputation.

Besides the bad reputation, keep an eye on the other brand. As long as they don’t misuse or represent something against your policies or growth, the rest of your journey is smooth. Keeping good relations with the promotional brands does have a huge impact. Unlike mergers or acquisitions, this is the best way to get involved with another brand if you are looking for more audience.

In case you are looking for expert resources, a better platform for your current company, or trying to save your drowning company a merger or acquisition is highly recommended.

Other reference links

 

Meghana Kandra

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