W.L. Gore and Associates

281 Words2 Pages
W.L Gore and Associates Acquisitions: Maximizing cultural capital and profits Management and executives are often faced with the difficult decision of how act in order to promote positive company culture and generate profits. As W.L Gore’s workforce becomes more diverse and global, firm management is faced with the difficult decision of how to maintain company culture while ensuring future sustainable growth. Using this case study as a reference, I will dive into how W.L. Gore’s acquisition strategy is inline both on a human capital and financial dimension. From a human capital perspective, W.L. Gore’s focus on organic growth and small discretionary acquisitions allow it to protect itself from disruptive company behavior from inside and out. Organic growth and development initiatives help ensure that both new and old employees understand the company’s best practices and values. Their focus on small companies with compatible cultures allows W.L. Gore to screen the best acquisition targets for its business without threatening its own unique culture. From a financial perspective, mergers and acquisitions can be costly mistakes for companies who pursue aggressive or large deals. Academic literature has shown with empirical evidence that the most successful transactions, as measured by excess returns, are done when a company acquires private business units or companies, within the same industry as the acquirer and are financed through cash. Large deals, which involve public acquisitions that are financed by equity often, result in financial overinvestment and burden on the part of the company and shareholders. It is important to note that W.L. Gore’s acquisitions are generally consistent with ‘good deals’, and prevent the company from the pitfalls of failed investments and unrealized
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