Question
what are 3 disadvantages of firms merging?
Sometimes when firms merge, the company is simply too large or diverse for the management to handle. Sometimes the profits from one of the businesses don't increase as fast as was originally expected. Also -- there's a tendency to cut costs with massive layoffs. This is often a mistake as customer service is likely to suffer.
Check out this article about a merger that wasn't a good move for either company.
http://en.wikipedia.org/wiki/Time_Warner
Sometimes when firms merge, the company is simply too large or diverse for the management to handle. Sometimes the profits from one of the businesses don't increase as fast as was originally expected. Also -- there's a tendency to cut costs with massive layoffs. This is often a mistake as customer service is likely to suffer.
Check out this article about a merger that wasn't a good move for either company.
http://en.wikipedia.org/wiki/Time_Warner