Examine the economic factors that make merging of firms difficult.
- Fear of loss of their names and identity; building a business takes quite some time, so firms fear to enter entering ventures leading to loss of their names or identity.
- Firms have different objectives such as profit maximization, sales maximization, etc.
- Some firms fear diseconomies of scale that are likely to occur with merging
- Firms in unrelated field are not likely to merge
- Some firms fear loss of autonomy
- Managers fear complexity that may arise after merging
- Some firms prefer competition
- Decision making is likely to be slow after merging
- Fear to undertake high risks due to merging
- Government policy of discouraging monopoly which accrues through merging.
CATEGORIES Economics
TAGS Dr. Bbosa Science
