Compaq – Digital Merging Case

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MERGER
MERGER AND ACQUISITION: 
DISCUSSION ON 
INFORMATION TECHNOLOGIES, 
HUMAN RESOURCE ORGANIZATIONS
&
MANAGEMENT CULTURES ASPECT
COMPAQ – DIGITAL MERGING CASE

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CONTENTS
I.

INTRODUCTION

II. BEFORE THE MERGER
III. DIFFICULTIES OF THE MERGER
IV. SUGGESTIONS FOR THE ACHIEVEMENT OF THE MERGER
V.

CONCLUSION

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I. INTRODUCTION
Jan/1998: Official announcement the merging between Compaq Computer Corporation and Digital Equipment Corporation
11/Jun/1998: The approval of the stockholder, the Day-One objective achievement:
hi
Over 100,000 employees of the new Compaq were able to access a single email directory via a corporate network that linked it worldwide sites within 60 first minutes of the stockholder vote.

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II. BEFORE THE MERGER
DIGITAL EQUIPMENT CORPORATION:

A minicomputers
manufacturing
1957

Transferred from computer
from computer
manufacturing to
computing services
During 1990s

Mid of 1980s
The world’s secondlargest computer maker

Jun 1998
The third largest provider of corporate
computer services with $1.3 billion
profits (at the merger time)

Organization and resource:


In 1997, it had 1,000 sales, production, and service sites all over the world. 1997, it had 1,000 sales, production, and service sites all over the world.



70,000 employees (at the merger time)

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II. BEFORE THE MERGER
COMPAQ COMPUTER CORPORATION:

Established in 1982 as a manufacturing in clone and sell personal computers. Located in Houston with around 20,000 employees, a haft of total, working there. in Houston with around 20
employees haft of total working there
Competitiveness was as a high-volume and low-cost manufacturer, As the growth of market demand on service characteristic
The solution was the merger with services companies.

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III. DIFFICULTIES OF THE MERGER
-

Define the key elements which affected the success of the merger process:

KEY ELEMENTS

DIGITAL

Information management
(IM)
(IM)

‐ Operated with a federated 
structure

Human resource
organization

COMPAQ

‐ Workforce was nearly double 
Compaq’s

Management Culture of
company

‐ Was known as a collective 
consciousness company in 
which all decisions would be 
approved by a committee

‐ Completely centralized 
organization

‐ Interested in quick decision 
making in business and also in 
operating.
‐ Top down organization in 
which the management was 
controlled from higher level to 
lower level
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III. DIFFICULTIES OF  THE MERGER
The mission:
Supreme mission was built up a throughout network for a new company’s operation Planning
15 main areas with 44 information management integration initiatives were particularly considered to be integrated in the whole process in which 9 initiatives would be done during 60 first days from official approval of merger. The actions :

Two enforced teams from two companies were established to analyze and classify the possibilities to finish the duty within the acceptable timeframe possibilities to finish the duty within the acceptable timeframe. o

One team was responsible for evaluating systems and processes in both companies - under the leadership of John White, Compaq CIO

o

Another team was responsible for setting up an enterprise network for a united company - with the guidance of Cranwell, Digital’s global communication manager.

As the result, the priority urgent targets in the first day was achieved by connecting fi
the internal e-mail addresses from both companies in the only one system, 7
strong firewalls and filters, a new website, and support center.

IV. SUGGESTIONS FOR THE ACHIEVEMENT
OF THE MERGER
Electronic mail system:
Should be set up based on a local area network (LAN)-based server software systems that incorporated well-designed graphical user interface (GUI) interfaces. The more robust groupware systems such as Lotus Notes/Domino and Microsoft Outlook/Exchange should...
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