Topic 19

@ruva – Thank you for taking the time to search for your topic. Topic 19 “An analysis and evaluation of the financial and operational consequences of a merger between two organisations or of the acquisition of one organisation by another” as you have discovered is not a popular topic I suspect because it involves a fair amount of research and application whereas some of the topics tend to be approached in a bit of a rote manner!

I have a few constraints on my time right now so I will answer in more detail either later today or tomorrow. What I suggest you do though is read through my whole 3 part article on Evaluation available via our homepage http://www.opentuition.com/obu to get a feel for the general approach to Evaluation and Analysis (as this is the key element for passing and a frequent cause of failure). Then I suggest that you copy your question above to the existing Topic 19 (even if there are no answers yet on there) so that we can develop this topic. (you should be able to use the normal copy and paste facility to do this)

Briefly regarding your questions about a comparator – no, one is not relevant for T19 – this is a T8 requirement and again the 3 years comparisons are not relevant either. Your focus should be on setting out what the business (and if possible the financial) objectives of the merger/acquisition were and then evaluating whether and how well these were achieved (or not achieved as the case maybe). Have a think about how you can obtain research data for this and I will explore some research approaches with you when I have more time.

Regards

Trephena – OT OBU Forum Moderator

Dear ruva

I will admit that my actual strength for you with this topic will be more a case of telling you what to avoid and giving advice of a more general nature rather than being able to tell you what you should do in detail… I did work for a company (that is now a household name in the UK) that was involved in a merger several years ago but I was a (willing) victim of one of the thousands of redundancies that preceded the actual merger so wasn’t actually involved in it. I therefore am only able to draw upon a limited amount of experience! (By the way I don’t know if you intended to submit in P31 but I think it would be a Herculean task to do this adequately now to meet the Assessment Criteria for P30 unless you have absolutely no other commitments and it would still be quite a feat then as you have less than 3 weeks to go)

Notwithstanding this – the most important thing for you right now will be to set VERY clear objectives that are related to the topic title (statement of the obvious I know but you would be surprised how many people start to deviate right from the start!). The objectives should be used to guide your research and your findings should demonstrate that you have used these to come to your conclusions. The Kaplan book should help you with this but also I suggest that you take a look at Google Scholar and feed in a few key words e.g. by using the phrase “Evaluating a merger” I was able to bring up some academic articles. Many of these will be to a certain extent far too advanced in their level of detail they go into, particularly when it comes to the mathematical formulae (unless you already have a maths degree!), however the early parts of them will give you some indication of factors that you should try to investigate e.g. Operating efficiencies, employee productivity, profit performance and average relative efficiency pre and post merger.

Note: With Google Scholar you will find that many of the articles are from journals and have to be bought BUT if you look at the right hand side you will find that occasionally some are available as pdf / htlm and these are usually free (another trick if you find any that you have to pay for, is to feed the author name and title into another search and sometimes you may find that the author has allowed their own version to be made available FOC). I don’t know if this will be of any use to you but you may find this checklist can be adapted for your purpose for example so take a look as at this point you need to get some ideas::
https://www.cbsnews.com/news/ma-quick-analysis-worksheet/

Regarding models – you may be able to adapt some that you find in the articles otherwise you should be able to fall back on the SWOT and PESTLE. In this case you need to apply them specifically in the context of the merger – the strengths that the merger has brought out and any weaknesses that it may entail (you could to a pre and post SWOT even).

Remember your analysis and findings will dictate the grade (and whether you pass or fail) and you have to show that you have made a contribution of your own to the analysis not just described what went on.

Again I have run out of time right now but let me know how you are getting on with the above.

@ruva – If part of your RAP is already complete and you have a clear plan and the relevant skills then no, it is not impossible. Your main focus must be on setting out relevant objectives that will fulfil the RAP title and being able to evaluate your findings adequately.

I normally would recommend 3 months for a Grade A standard RAP and at least a month for a basic pass but that is a general guide as student ability varies considerably.

BTW the word count for Parts 1 & 2 are merely a Guide and without doubt it is the quality of the Evaluation & Analysis that will determine whether you pass or fail. The marker will want to see what you are “bringing to the party” – and will grade you mostly on what you are adding (after all just citing what has gone on and using other people’s work without critically assessing it does not really demonstrate any real skills apart from being able to research and edit!). Analyse the impact of the merger on various stakeholders and support this with evidence from your research (all well referenced of course!) and show how the merger has impacted on the financials and offer sensible commentary on this (again with independent evidence from business articles if possible) and remember ratio analysis on its own is just a tool – a means to an end (it is the end that is important i.e. the significance of the ratios in the context of the merger and what has driven them). This way you will avoid the common trap of many topics of not bringing in any original work by merely describing what has gone on and making obvious statements.

PS I am not sure why you are still insisting on having a competitor – this would normally be superfluous and should only be included IF you can show how it really relates to the RAP title and is relevant to your findings

Good luck! 🙂

@ruva – at the risk of sounding like a stuck record: just keep your objectives clear and present the evidence that answers your research questions clearly in the Findings. When you do your conclusions and any recommendations they need to be based on what you found (you would be surprised how many students make sweeping statements about how a company has achieved this and that without having supplied any evidence in their findings to base such statements on > result > FAIL)

Evaluate your findings from different points of view e.g. cutting overheads through redundancies may have helped margins and increased the share price but has it demotivated workers who remain as they may now have extra duties and no more pay for this? etc (This approach is what markers mean by questioning and critiquing in their feedback and what contributes to the critical thinking element required for a pass)

Glad you are finding the work interesting (that is the main reason I recommend students don’t choose T8 as although other topics may be more challenging to do they are often more interesting and exciting). It is also encouraging for other students when they see someone has deviated from choosing T8 as they then realise that possibly they could do a different topic.

(Be careful about information overload – be selective in what you read – I know research is the exciting bit 😀 but you have a VERY limited time to get your work completed!! )

@ruva – There is only one little problem that has occurred to me as I have re-read our exchange and that is that the merger took place 9 years ago. That does not mean your work is invalid but you will have to show that you have incorporated some recent research into your findings. One of the problems universities face is students recycling other students’ work. ( I suspect this is the main reason why OBU INSISTS that T8 RAPs have to use the most recent data) So a marker will raise the obvious question “why has this student chosen to do this when it happened so long ago?” – they may start to presume that you have got hold of work that had previously been submitted and have just updated this..

I don’t want to worry you unduly but I think you need to preempt this little problem by briefly covering it in your Part 1 and possibly in Part 2 stating the limitations of the data you have. You can also mention it in your SLS – how doing T8 wasn’t very inspiring and you wanted the challenge of doing a different topic. I think as long as you are able to show that the work is yours and you are using some current data you will be able to overcome any doubts that the markers may have. Obviously if you are able to show some continuous trends pre and post acquisition up to now it will really strengthen your standing on this. (It may also be useful to keep copies of some of your drafts so that should OBU need to question you about when your work was produced you can show them how you built it up). As I say don’t worry too much right now as you have your deadline to work to and it may be one of those things that may never happen anyway.

With the SLS you need to take the approach that up to now you have mainly been involved in studying and writing answers in exams but you have had to learn how to do an acceptable academic piece of work – which in itself is quite daunting. So think of all the new skills you had to acquire (among them the dreaded referencing 🙁 !!!!) – and how it has introduced you to how to research academic papers etc.but also say how your strengths are in financial management so you decided to draw on that. What they are really looking for is what life lessons and skills you learned and what you learned about yourself (including any personal weaknesses) and what may be useful to you in the future in both your career and in your social as well as professional interactions. You can certainly refer to Open Tuition (the actual questions in the SLS say mentor because OBU expects most of the guidance to come from the mentor but it is perfectly acceptable to seek advice from any source if it helps).

@ruva – I am much reassured by your comments – it sounds quite logical now that you have set it out and the time lapse as you explain it makes perfect sense. I think you put some of this briefly in Part 1 but just as ‘an insurance policy’ (just in case you get a ‘hard’ marker ) you do a special Appendix and explain you have produced this Appendix with more details relating to your choice in case OBU is concerned that this might not be your original work. However I think you will be all right.

(You can upload at least 6 appendices – probably nearer 10 other documents – in addition to the mandatory report, SLS, Presentation, Ref List and spreadsheet). Just call it something like “Background to choosing this Topic and Company’ – then you can go into more detail about how you were going to do T8 without it all affecting the word count. BTW If you still have your comparator information keep hold of it along with all your other preparatory work but as I say I would hope now there will be no problem – but forewarned is always forearmed!).

All of this though does make for some good self-reflection for the SLS, as in effect you did some of this in deciding to reject T8! With Q2 you need to consider the difficulties in achieving your report objectives, how you overcame them, what proved to be your strengths and what you might have done better with the benefit of hindsight (you can also mention how much effort you wasted on doing the comparator analysis!). Q3 you can mention communications on OT as an example of part of your effective communication and how by asking relevant questions you realised that you might be able to do T19, which you thought would be far more stimulating etc. With the SLS apparently the markers like comments that demonstrate the trials and tribulations of producing the RAP as they know that everything does not always go smoothly, or to plan and that too many students produce anodyne formulaic statements that just do not ring true…

Regarding your query with the diagram – yes technically there is a copyright issue but to be honest as you are not intending to profit financially from incorporating the diagram, provided you acknowledge its source I wouldn’t worry too much. Most writers only get upset if someone is using their original work passing it off as their own and/or making money out of it. In addition in academic circles it is accepted that provided everything is referenced in this regard it is acceptable for educational purposes 🙂

I think it sounds as if you have the makings of a very good RAP. As long as your analysis is good, I have high hopes for you, so may your efforts be well rewarded! 😀

PS You should keep a couple of copies of your work (preferably on different memory sticks in case your files get corrupted)

@ruva – regarding your diagram – what I have done in a similar situation is written in brackets after the title or underneath where the reference would go something along the lines of this: (Author’s diagram after Kaplan, 2013) and then in the reference list would put Kaplan (2013) and give the original source details . The normal referencing rules apply e.g. if you have more than one reference for Kaplan 2013, then you would need to put Kaplan, 2013a or Kaplan, 2013b etc. to distinguish the different articles – or put page numbers in the text reference (Kaplan, 2013 p.57) if citing from a thick study manual.

One final bit of advice – just ensure in your evaluation section that you are not just describing the situation as you found it, but remember the important thing is to discuss the implications of what you found supported by examples as evidence with appropriate references. The amount of your original thought/input and this type of critical evaluation will be what decides the grade.

Good luck!

Hi All,

I am quite new here and have just commenced my RAP topic 19. I will need the support of everyone to come through with the project once and for all.

Thanks

Wales

@olayinkaolawales – in principle yes the CAMELS model is appropriate if you can apply it well both pre and post – make sure you label them up clearly accordingly. And yes McKinsey if you think you have the information to apply it. Otherwise you can fall back on the stock SWOT model as it tends to cover everything e.g. what the merger /acquisition achieved (provided it was successful) in terms of strengths and opportunitie etc.

Congratulations for considering an ‘alternative’ Topic to T8! 🙂

Hi,

I had a quick question and was hoping you might be able to help.

I was looking to write about the Bank of America Merrill Lynch merger for my RAP. Would this be a suitable topic to write about?

I have found quite a bit of information online, but a year before Bank of America bought Merrill Lynch, they also bought Countrywide. Would it be too difficult to identify the financial consequences of the Merrill Lynch acquisition, given the Countrywide acquisition’s impact on the financial statements?

Thanks in advance for any help!

Thank you very much for your help, I really appreciate it!

I am a student currently studying part time and I wish to do my OBU Project this year. I have chosen to go forward with Topic 19. As such I have done some reading and narrowed down my choices of companies. Before proceeding I checked whether the companies follow IFRS or U.S. GAAP.

As I am a student who has so far studied and followed IFRS’s, I was wondering if there would be any roadblocks or difficulties that I possibly might face if I decide to do my project on a company who prepares the Financial Statements according to U.S. GAAP.