Ideally, a merger combines the best features of one company
with those of another company such that the whole is of greater value than the
sum of the two parts. Optimal combination as such may imply or at least depend
on a rough power-balance between the two adjoining companies, for otherwise
distended dominance could translate into the worst of one company (i.e., the
dominate one) being foisted onto the merged entity. The opportunity cost, or
benefit lost in going with the worst of the dominant company, could be measured
by the extent to which the same function in the other company is better than
that of the dominant company. Put another way, it would make no sense to go
into a merger planning to let each company continue to do what it does worse
than the other. Sadly, power can eclipse economic criteria even in a company.
The merger of Continental Airlines and United Airlines provides a case in
point.
The complete essay is at “Power
over Business Effectiveness in the United Merger.”
United's "Love in the Air" promotion highlighting couples who met in the air. The case of the winning couple pictured here just happens to involve an "upgrade." The love in the air does not refer here to the employees on board or at the gate, even though the impression intended may be that flying United is a loving experience. (United Airlines)
