Book review of The 7 habits of highly effective people by Stephen R. Covey: Winning (Chapter 14) Mergers and Acquisitions

Merging is a very common way for large enterprise to gain world of synergies, industry convergence benefits or revenue synergies, cost savings and increase shareholder value. A successful mergers create a dynamic where 1+1=3. Jack Welch indicates 7 pitfalls for all the CEO to avoid these happenings.

1) Who become the CEO / leader after the merged enterprise?

2) Fail to assess cultural fit.

3) Reverse hostage situation.

4) Too timidly, a merger should be completed within 90 days.

5) Conqueror syndrome, installs its own managers everywhere.

6) Paying too much.

7) Resistance from the acquired company’s people from top to bottom.

Several mergers cases are very successfully such as, eBay and Paypal, Google with Youtube and Android. Today, I pick up Android for the review of this chapter. Android is a mobile operation system. This company was purchased by Google in 2005. Google collaborated with Android and released the system to the world. Now, Android OS smartphone ranked first in US market.

To avoid the failure of cultural fit, Google let the Android development team Open Handset Alliance to cope with the hardware, software and telecom companies. The Open Handset Alliance is the founding team of Android, this team collaborate with other telecom companies to develop the open standards for mobile devices. Since Google is a search engine enterprise, it is difficult to develop mobile platform from its own. This action can avoid the failure of cultural fit. On the other hand, Google releases Nexus One, this mobile is used to complete with apple iPhone. This phone can be described as Android powered Google phone.

Another new feature of Android is Android market. This Android market is available from 28 August 2008. It is the official download location for applications and games for Android powered devices. The users can purchase applications which support 29 countries. In Nov 2010, around 160,000 applications are launched from Android. In the future mobile market, Android OS will develop applications with popular internet sites and services such as MySpace, Facebook and Twitter.

Jack Welch points out that mergers mean change. It is part of the growing process for large enterprise. Google avoids the 7 pitfalls, it can develop a new mobile phone Nexus One with Android. Android can develop its own OS with several mobile companies and new applications with popular web sites. It is a good example of 1+1=3.