Answer No.

6
As acquisition of another business is very complex, there are many problems that can arise,
few of them are listed below:
1- Integration Problems

Not all acquisitions require extensive integration. For example, if the benefits from an
Acquisition are expected to arise from a small set of targeted activities, then the integration
Issues are usually confined to these activities, do not spread to the entire merger, and are
Usually quite manageable.

Thus in GM Daewoo integration can be a problem, which left unattended, leads to failure.
Typically, integration problem may arise because this acquisition is:
(a) Scale of the merger
(b) Complexity of the merger
(c) Speed of integration,
(d) Departure of human capital,
(e) Cultural clashes.

The first two factors – scale and complexity – are related in this case study. Complexity gets
exacerbated if the integration is comprehensive, and multiple activities of the value chains of
both firms have to be melded. The integration may also be complex by virtue of the sheer
scale of the activities that need to be integrated, even if it involves a narrowly targeted set of
activities.

Speed of integration is often an overlooked part of the integration process. From

Clinical studies of firms that have successfully integrated many of their acquisitions, one
Common theme emerges: longer is the integration process, larger are the unanticipated
Problems. Basically, right after an acquisition, both firms are committed to the original
Premise of the merger or acquisition, and that is the correct point in time to gain consensus
And carry out the integration. This could well be a problem in GM Daewoo case as well.

People Integration Finally, people-related integration issues in GM-Daewoo acquisition

may come in two guises. First, the knowledge assets of the Daewoo reside with its people.
The issue in this situation is retention of the human capital containing the knowledge. The
GM- Daewoo needs to be clear about the incentives that will keep these people from leaving.
The second type of people problem arises out of culture clashes. This is especially important
when the combined firm’s, erstwhile independent, departments have to work closely together.

1- Resources Assembling/ Blending It will be difficult to assemble resources under

one management efficiently, as both the companies are big, this could be a
complex activity to put the organization together in timely fashion, which could
result in competitor’s advantage during that time period.
2- Pooling of assets may also be very tricky in this case.