Integrative Problems and Virtual Organization

Integrative Problems and practical(prenominal) Organization LaShell Johnson Lynnette ONeil Thomas Hernandez University of phoenix Finance for Business FIN 370 Bruce Fox December 14, 2011 Integrative Problems and Virtual Organization Lafleur Trading connection is a private smart set that has supplied the serviceman with the finest food and wines over 3 dozen job partners across the planet. Recently, they stir decided to draw out their operations. Looking at their options, they whitethorn expand by acquiring another organization in the resembling industry, go domain done an IPO, or merge with another organization.Below are the pros and cons that may answer with each approach. One advantage of being a in camera held caller-out is the ability to move quickly without having to obtain approval of shareholders or a board of directors. The owners of a privately held confederation have a great interest in the success of the occupancy because of the greater risk the owners f ace. It would be easier and faster to acquire a community in the same industry. The social club would obtain a new customer rear end and authorityly be obtaining new technology that would improve overall operating(a) effectiveness.When an organization decides to expand their business by acquiring another organization in the same industry, there are a few things that need to be considered. An erudition discharge be defined as the purchase of one business or company by another company or business entity. One of the strengths of acquiring another company is the fact that they have so many trading partners across a wide range. Lafleur Trading Company only deals with reputable producers and exporters which shows that they are much than capable of handling more(prenominal) responsibility. Their extensive list of products includes seafood, wine, fruit, vegetables, cheese and maple products.If a friendly learnedness occurs, two companies would work together and negotiate the arran gements. Learning more efficient slipway for production fuel withal be discovered during the process of an acquisition. in that respect are weaknesses during this process such as transferring of technologies and capabilities can prove strong because of acquisition implementation. at that place is always a risk of losing implicit intimacy during a fast paced acquisition. A leave out of adequate record tutelage can prove costly and time consuming for the acquiring company. There are always opportunities when a company acquires another.For one, the company can growing supply-chain pricing power by buying out one of its suppliers. This allows a company to eliminate a level of costs. another(prenominal) opportunity to be had is eliminating competition in order to gain a larger mart share in its products market. An example of a scourge would be a hostile takeover. This is when one company buys another against its will. Employees of the acquired company may feel threatened thus outgrowthing in a lack of communication which may be beneficial to the acquiring fast. Expanding through acquisition also has hidden risks there may be potential legal philosophy suits that are unknown at the time of purchase.If the acquisition is not organize properly, the acquiring company would have to absorb all the potential liabilities. Another way to expand a privately owned company is to seek an Initial popular Offering, or a sale of stock by a private company to the commonplace. Companies undertaking IPO may asking assistance of an Investment Banking firm to help assess the values of their shares. When the company list their shares to the public exchange, the money paid by investors for those shares goes directly to the company.IPO enables a company access to money, provided by investors, which they can use as outstanding for future growth. Of course there are variables that may or may not clear the expanding company. One of the benefits of an IPO is the media cov erage the business receives. When favorable, the companys reputation of its products and services attract more investors. The companys activities will also be reflected in the reports of professional financial analysts. official public profile not only support liquidity of the shares, hardly also becomes a desirable and reliable partner.Banks also become bleak on extending loans with lower interest rates (Trust Capital Group, 2003-2011) Going public also provides its challenges. One of the most important challenges is the need for added disclosure for investors. Public companies are also regulated by the Securities Exchange Act in regards to periodic financial reportings. These requirements increase legal, accounting and marketing costs. If La Fleur Trading Company would rather not deal with these additional regulations, they may also decide to merge with another organization.The strengths of unify with another organization, for La Fleur Trading Company can be very beneficial fo r the company, as its definition says merging is the acquisition of another firm, or merging is the result when two firms unite into one, some of the benefits of emerging with another firm can be economies of scale and a more improved organizational efficiency, it also reduces the staff costs, and general expenses, all this factors have convinced more and more firms to merge with another firm over an IPO.However there might be some weaknesses when merging with another firm, like in every firm there might be some risks to take when making a business, some of the disadvantages of merging with another firm might be, legal expenses, improvident term opportunity costs, costs and expenses related with the takeover or the merger, potential devaluation of equity and some possible intangible costs that may come to the firms, as a result merging with another firm can be very beneficial or very risky, it may benefit the firms by creating and saving more money for both, or it can be very deva stating for both by the much more greater losses that the companies are going to lose with the merging of both firms. In conclusion, we have determined that Lafleur Trading Company should choose the route of merging with another organization because of the type of business it is. It would be more feasible to merge with another firm and gain additional trading partners through that process.By going through an acquisition, the company may lose the existing relationships with the trading partners which would be more costly to start over. As a privately held company, there are no concerns with having to obtain approval of shareholders or a board of directors. It would be easier and faster to merge with a company in the same industry. The company would obtain a new customer base and potentially be obtaining new technology that would improve overall operational effectiveness. Reference Trust Capital Group. (2003-2011). IPO Benefits. Retrieved from http//www. trust-capital. com/page. php? id=73&038&038PHPSESSID=798a964978326d6fb0a20625b21ecca6 Keown, A. J. , Martin, J. D. , Petty, J. W. , &038 Scott, D. F. (2005). Financial direction Principles and applications (10th ed. ).