Consolidation and its Value to Shareholders
Carney (2018 p.69) states that organization consolidation has several potential advantages for an organization that aims to utilize its resources better. During consolidation, a team is tasked to examine the organization resources, including equipment, assets, and its subsidiaries. The team then creates a more logical scheme to utilize the resources and those that are no longer required closed, sold or disposed of in a cost-effective method. When an organization merges several units into a smaller number of units, the budget is trimmed increasing profits and enhances growth. In some types of consolidation, there is an increased capital for the new organization. This added capital enables the new company to invest in technology and initiatives. Finally, a more responsive workforce that is more economical is created for the new company. Some of the existing jobs might be slashed, and a new structure provides vacancy for the most qualified workforce hence quality services. The resulting workforce contributes ideas to improve the organization’s response to current trends in the industry.