Bob's Running Shoes has acquired Fleet Feet about six months ago. Due to the differences in processes and cultures of the two companies, it has taken a long time to adopt a common management and financial control system. They share information and personnel but have had difficulty in creating a common culture. Management is threatening to leave because the employees do not like the acquiring company's way of operating. Which of the following acquisition pitfalls does this scenario describe?
A) Integrating the acquired company
B) Overestimating economic benefits
C) The expense of acquisitions
D) Inadequate pre-acquisition screening
E) Agency problems

Question

Quizplus · Accepted Answer

The scenario describes the acquisition pitfall of integrating the acquired company. The challenges they are facing in creating a common management and financial control system and a common culture after six months of acquisition are indicative of the difficulties in integrating two companies with different processes and cultures. The threat of management leaving due to differences in operating styles further highlights the integration challenges. Therefore, the best choice is A.

Bob's Running Shoes Has Acquired Fleet Feet About Six Months