Question at position 10 During the mid-2010s, GE had structured its organization into 6 divisions, each dedicated to a specific product category (Energy, Capital, Home & Business solutions, Healthcare, Aviation, Transportation). They provided some centralized services to support these business units with the intention of minimizing expenses and creating consistency. They acquired several new companies with the expectation of integrating them into the current structure; however, they faced significant challenges in achieving success and failed to deliver executive expectations. Which of the following factors was a likely contributor to the failure of these acquisitions?Continual changes in the external environment which made the acquisition unable to deliver a value proposition Overestimating synergies which would be achieved Incompatible organizational culturesAll of the choices provided were likely contributors to the failure of their acquistions

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BlackTom AI · Accepted Answer

Question restatement: The scenario describes GE in the mid-2010s with six divisions and centralized services, plus acquisitions that failed to meet executive expectations. The prompt asks which factors were likely contributors to those acquisition failures.
Option 1: 'Continual changes in the external environment which made the acquisition unable to deliver a value proposition.' External environment shifts can undermine strategic fit, integration timing, and the value proposition promised to shareholders, leading to misaligned expectations and inability to realize anticipated benefits.
Option 2: 'Overestimating synergies which would be achieved.' A common pitfall in acquisitions is overestimating cost savings, revenue enhancements, or integration efficiencies, resulting in disappointed post-merger performance when synergies fail to materialize as planned.
Option 3: 'Incompatible organizational cultures.' Cultural differences between the acquiring firm and target can derail integration, hinder collaboration, and impede the execution of combined business models, often harming post-merger outcomes.
Option 4: 'All of the choices provided were likely contributors to the failure of their acquisitions.' When each of the above factors can independently undermine value creation, it is logical to consider that together they could cumulatively explain poor acquisition performance, as many merger outcomes are driven by a mix of strategic, financial, and cultural misalignments.
In evaluating these options, each isolated factor describes a credible challenge frequently observed in mergers and acquisitions: dynamic external conditions can erode promised value, overoptimistic synergy estimates can misguide deal rationale, and cultural incongruities can obstruct integration efforts. Because these issues are not mutually exclusive and can interact to produce underwhelming results, the composite explanation that includes all of them is consistent with the complexity of acquisition failures.

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