Mergers are meant to be mutually beneficial. People generally don’t enter a deal unless it is advantageous to them in some way. Unfortunately, many poorly executed mergers lead to contentious business relationships, ultimately decreasing productivity and profits.
If you’re planning on maintaining a leadership position in the business after selling, it would be best if you spoke with a lawyer about defining roles in a Georgia merger. At Sparks Law, our experienced attorneys can help you understand the importance of establishing clear boundaries in your business relationships.
If the seller plans to participate in the management of the newly merged conglomerate, both parties must be willing to work together. Every person runs their business differently, so it is essential to discuss each person’s role in the merged company and set clear boundaries.
When both owners are not on the same page, the business relationship can become combative. For example, as the seller, you might not agree with the new owner’s decision to alter certain administrative processes. If you and the other party are constantly disagreeing, the toxic work environment can lead to a decrease in productivity and profits.
It is often best to execute a merger with someone who has similar personality traits and ideas for the conglomerate company. However, that does not guarantee a good business relationship. When merging with another business, it is beneficial to define each person’s position in the organization.
For example, you might have an agreement that states you have the final say on all matters concerning distribution while the other party manages the supply side of the company. Maybe you’re great at sales, and the other party thrives in the administrative department. Whatever industry you’re in, find an arrangement that highlights both of your strengths for the benefit of the merged business.
Establishing distinct roles streamlines the decision making processes for all parties involved in the merger. If both managers must come to a consensus on every issue, the company won’t be able to keep up with changing market demands.
Defining new roles within a large business can take a lot of time, so it can help plan everything out before you complete the deal and begin operating as the newly merged company. Waiting until after you finalize the merger to start making changes to the management structure can result in missed opportunities to pivot according to the changing market.
Small companies are often at an advantage in these situations, as they are typically more flexible. Businesses with under 50 employees can take advantage of new opportunities within a few days rather than a few months.
So, as you’re planning your merger, think about the size of your company and the one you’re joining. The earlier you can define the new managerial roles, the easier it will be to execute decisions for the larger merged company.
Mergers can be beneficial for the buyer and the seller, but these deals work best when each party has a good understanding of their position in the organization. Our dedicated attorneys can assist you with defining roles in a Georgia merger. Contact Sparks Law today to speak with a legal professional about your business deal.