Being “Big” may hinder communications and undermine flexibility. With MTR promised to take all former KCR’s employees, they may be “too save to work hard”. All these results in inefficiency.
In addition to the quarrels between the former KCR Chairman and its CEO in 2006, the Merger has brought much uncertainty to its employees and further drag down their morale.
Over dependent on property development means that shareholders’ returns are vulnerable in times of economic recession.
The China government has announced 4 trillion yuan stimulus package on November 9 aimed at boosting domestic demand over the next two years including 1.8 trillion yuan on railways, roads and airports (SCMP, 28/11/08). This represents potential railway network building and consultancy service business to MTR.
Financial tsunami hard hit the economy and people, especially the middle class, tends to save transportation cost by taking MTR rather than driving or taking taxi. 4) Threats
Monopolistic status of MTR will induce regulatory bodies, such as the Legislative Council and other pressure groups to monitor the company. That will definitely affect its operation or even profits.
Under the financial crisis, economic activities slow down and the confidence of people collapsed. Consumption and investment decline drastically that MTR’s 10
income will undoubtedly be affected, especially for the property development business.
In conclusion, MTR should ride on its strengths to capture the business opportunities and eliminate its weaknesses in order to get rid of the threats. 2.4 Synergy effects of the merger
Synergy can be simply implies as the meaning of whole is greater than the sum of its part. It means that the relationship, which the parts have to each other, is a part in and of itself. It is no only a part but the most catalytic, the most empowering, the most unifying and the most exciting part. Synergy is the essence of principle-centered leadership. It...
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